What a reverse mortgage really costs in Canada
A reverse mortgage's costs are the interest, which compounds, plus set-up of about $2,270 to $3,770 (lender fee, appraisal, independent legal advice), prepayment charges in the early years, and discharge fees at payout. Interest is by far the largest cost.
Figures as of November 1, 2026.Set-up costs a HomeEquity Bank CHIP borrower about $3,070: a $1,795 closing and admin fee plus roughly $425 for the appraisal and $850 for independent legal advice. EQ Bank's set-up fee is $995 plus those extras; Bloom quotes $2,300 all-in. The biggest cost is interest: on $200,000 at 6.49%, about $178,801 over ten years.
Set-up costs by lender
| Lender and product | Lender fee | Appraisal and legal advice |
|---|---|---|
| HomeEquity Bank: CHIP Reverse Mortgage | $1 | Extra: about $425 appraisal and $850 legal (HomeEquity Bank's example) |
| HomeEquity Bank: Income Advantage | $2 | Extra: about $425 appraisal and $850 legal (HomeEquity Bank's example) |
| HomeEquity Bank: CHIP Open | Greater of $2 | Extra: about $425 appraisal and $850 legal (HomeEquity Bank's example) |
| EQ Bank (Equitable Bank): Flex | $995 set-up fee | Extra: about $425 appraisal and $850 legal (HomeEquity Bank's example) |
| Bloom Finance Company: Bloom reverse mortgage | $2 | Included ($350 appraisal, $300 legal-advice estimate) |
HomeEquity Bank says its $1,795 fee covers legal, administrative costs, discharging any prior mortgage and registration, and that individual circumstances vary. Your own lawyer's fee for independent legal advice is separate and you choose the lawyer. A 2019 HomeEquity Bank article put appraisals at $300–$400 and legal advice at $400–$700; we use the $425 and $850 figures from its current APR example.
Interest: the biggest cost
Interest compounds on the balance because nothing is paid. At 6.49% the balance doubles about every 10.9 years. Renewals are at posted rates, currently 7.09% for CHIP's 5-year term. For comparison, the Bank of Canada's average rate on new uninsured 5-year-plus fixed mortgages was 4.58% (2026-08).
| Rate | After 5 years | After 10 years | After 15 years |
|---|---|---|---|
| 6.23% | $71,799 | $169,375 | $301,979 |
| 6.49% | $75,246 | $178,801 | $321,316 |
| 7.09% | $83,349 | $201,433 | $368,727 |
| 8.54% | $103,825 | $261,549 | $501,150 |
6.23%: EQ Flex Lite 5-year. 6.49%: CHIP 5-year special. 7.09%: CHIP 5-year posted. 8.54%: CHIP Max 5-year.
Fees while you have the loan
HomeEquity Bank's fee schedule (effective April 1, 2024) includes $50 per extra advance request, $50 to change planned advances, $65 for property-tax verification, and charges if things go wrong: $125 a month default processing and $80 a month insurance administration. A power-of-attorney review costs $1,000. EQ Bank charges $50 per single extra advance and nothing for scheduled advances. Unpaid fees are added to the balance.
Prepayment charges
HomeEquity Bank, current contracts: 5% of the amount repaid in year 1, 4% in year 2, 3% in year 3, then 3 months' interest. EQ Bank: 5, 4 and 3 months' interest in years 1–3, then 3 months' interest to year 10, nothing from year 11. Up to 10% of principal a year can be prepaid without charge. If you repay $200,000 after one year at 6.49%, HomeEquity Bank's charge would be about $10,660 and EQ Bank's about $5,765. The early-repayment calculator shows every year.
Costs when the loan ends
When the home is sold, you or the estate pay the balance, any fees, a mortgage discharge fee (HomeEquity Bank: $399 in Ontario, Nova Scotia, New Brunswick, Saskatchewan, PEI and Newfoundland and Labrador; $75 in BC; $100 in Manitoba; none in Quebec and Alberta) and a $150 payout processing fee, plus the usual selling costs.
A ten-year total
A 70-year-old borrows $200,000 with CHIP at 6.49%, renewing at 7.09% after five years, and sells at 80. Set-up about $3,070; interest about $189,952; discharge and payout about $549. The same money on a HELOC at 5.20% would cost about $104,416 in interest, paid monthly from your income.
What does set-up cost at each lender?
| Product | Lender fee | All set-up costs |
|---|---|---|
| HEB CHIP (lump sum) | $1,795 | $3,070 |
| HEB Income Advantage (monthly) | $2,495 | $3,770 |
| EQ Flex (monthly or lump) | $995 | $2,270 |
| EQ Flex Lite (lump sum) | $995 | $2,270 |
| EQ Flex Plus (70+, lump sum) | $995 | $2,270 |
| Bloom (lump sum) | $2,300 | $2,300 |
| Home Trust EquityAccess (lump sum) | $995 | $2,270 |
| Home Trust EquityAccess+ (monthly or lump) | $995 | $2,270 |
Appraisal ($425) and independent legal advice ($850) are HomeEquity Bank's published example amounts; your quotes may differ. Bloom's $2,300 includes both.
How can you cut the cost?
- Borrow less up front and take later advances or scheduled monthly advances: interest only runs on what you've taken.
- Pay some interest yourself if you can: EQ Bank lets you prepay interest monthly and up to 10% of principal a year without a charge; Bloom offers optional monthly interest payments.
- Compare lenders' 5-year rates; the gap between the lowest and highest standard products is more than a full point.
| Borrowed at 70 | $150,000CHIP lump sum |
|---|---|
| Rate | 6.49%, then 7.09% |
| Set-up | $3,070 |
| Owed at 80 | $298,450 |
| Interest over 10 years | $145,380about 47 times the set-up cost |
Open this example in the calculator →Computed by our engine with the lender terms and rules on the methodology page.Computed November 1, 2026.
What this means for you
Shopping a lower set-up fee saves hundreds; borrowing less, later, or monthly saves tens of thousands. Look at the interest first.
Frequently asked questions
How much are closing costs on a reverse mortgage?
About $3,070 with HomeEquity Bank's CHIP (closing fee $1,795, appraisal, legal advice), $2,495 closing cost for Income Advantage, the greater of $2,995 or 1.25% for CHIP Open, $995 plus appraisal and legal with EQ Bank, and $2,300 in total with Bloom. They're usually deducted from your proceeds.
Are reverse mortgage fees added to the loan?
The lender's fee is deducted from the proceeds, so it's effectively borrowed and accrues interest. HomeEquity Bank says unpaid servicing fees are added to the balance and accrue interest too.
What is the APR on a reverse mortgage?
Lenders publish one. HomeEquity Bank's CHIP 5-year special has an APR of 6.91% (on $150,000 over 5 years including closing costs); EQ Bank's Flex Lite 5-year fixed shows 6.309%.
Primary sources
- HomeEquity Bank — CHIP Reverse Mortgage: eligibility and closing fee. Checked .
- HomeEquity Bank — HEB Advantage rates (APR example with $850 ILA and $425 appraisal). Checked .
- HomeEquity Bank — Income Advantage rates and closing cost. Checked .
- HomeEquity Bank — CHIP Open rate and prepayment. Checked .
- HomeEquity Bank — Fee schedule (effective April 1, 2024). Checked .
- HomeEquity Bank — Prepayment charge calculator (contracts 32–34). Checked .
- HomeEquity Bank — CHIP Reverse Mortgage rates (special rates as of October 29, 2026) (effective October 29, 2026). Checked .
- EQ Bank (Equitable Bank) — Reverse mortgage comparison and rates (prime 4.70% as of October 29, 2026) (effective October 29, 2026). Checked .
- EQ Bank (Equitable Bank) — Reverse mortgage FAQ. Checked .
- EQ Bank (Equitable Bank) — Reverse mortgage advances. Checked .
- Bloom Finance Company — Rates and fees (effective November 1, 2026). Checked .
- Financial Consumer Agency of Canada — Reverse mortgages (effective October 15, 2025). Checked .