Repaying a reverse mortgage: when it's due and how it works

What makes it due

• Sale or transfer of the home.
• The last borrower moves out: HomeEquity Bank says the loan becomes due if the property is no longer your primary residence; EQ Bank names moving into long-term care or a retirement residence.
• The last borrower dies (HomeEquity Bank: repay within 180 days; Bloom: 6 months).
• Default: HomeEquity Bank lists unpaid property tax, lapsed insurance, unpaid condo fees and bankruptcy.

What the payout includes

EQ Bank lists principal and accrued interest, default expenses if any, fees and costs, and any prepayment charge. HomeEquity Bank adds a $150 payout processing fee and a discharge fee of up to $399 depending on the province. Payments are applied to fees first, then interest, then principal (EQ Bank).

Paying it down early

Paying the interest each year keeps the balance flat; paying some principal shrinks it. EQ Bank allows up to 10% of principal once every 12 months and interest monthly without a charge, and from year 6 the whole balance with three months' written notice. HomeEquity Bank has described a similar 10% allowance; check your contract.

If you move

Moving means repaying. If you might move within three years, the charges matter; HomeEquity Bank's CHIP Open has no charge on full repayment at a higher rate (9.20% variable). Bloom's marketing has described a right to move the loan to a new home, but we couldn't find it on Bloom's own site.

What does early repayment cost in each year?

Repaying $200,000 at each anniversary (HomeEquity Bank at 6.49%, EQ Bank at 6.28%)

Repaid after	HomeEquity Bank charge	EQ Bank charge
0.5 years	$10,325	$5,398
1.5 years	$8,804	$4,594
2.5 years	$7,039	$3,665
3.5 years	$4,058	$3,899
5.5 years	$4,611	$4,412
10.5 years	$6,345	$0

After year 3 HomeEquity Bank charges three months' interest; EQ Bank's charge ends after year 10. HomeEquity Bank has written that the charge is waived on the last borrower's death; confirm it in your contract.

How does repayment work, step by step?

1. The loan becomes due: the last borrower dies, sells or moves out for good.
2. The lender sends a payout statement: balance, interest to date, any prepayment charge and the discharge fee.
3. The home is sold (or the estate repays from other money); the lawyer pays the lender from the proceeds.
4. The lender discharges the mortgage from title; whatever is left goes to you or the estate.

Can you repay part of it?

Yes, within limits: EQ Bank allows up to 10% of principal a year and interest monthly without a charge, and HomeEquity Bank has described a similar yearly allowance. Partial repayments cut future interest, so paying down even a little in a good year can leave noticeably more later.

Repaying $200,000 of CHIP after 18 months: inputs, steps and result

Borrowed	$200,000CHIP at 6.49%
Repaid	after 1.5 years
Balance	$220,109
Prepayment charge (year 2: 4%)	$8,804
Total to repay	$228,913

Open the early-repayment calculator →Computed by our engine with the lender terms and rules on the methodology page.Computed November 1, 2026.

What this means for you

If there's a chance you'll sell within three years, the early-repayment charges matter more than a small rate difference. CHIP Open has no charge on full repayment, at a higher rate.