Looking to Get a Reverse Mortgage in Ontario?

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As you get older, you may find yourself “house rich but cash poor.” In other words, your home is worth a lot, but your monthly income doesn’t stretch as far as it used to.

If this sounds like your situation, you might’ve heard about reverse mortgages. These are loans made specifically for Canadian seniors who own their homes and want to tap into their home equity without selling or making monthly payments.

What Is a Reverse Mortgage and How Does It Work?

A reverse mortgage lets you borrow money using your home’s equity, but without having to make any regular payments. It’s basically the opposite of a traditional mortgage. Instead of paying the lender each month, the lender pays you—either in a lump sum, in monthly installments, or as a line of credit you can use when needed.

The loan is secured against your home, just like a regular mortgage. But you don’t need to repay it until you sell your home, move out permanently (such as into long-term care), or pass away. At that point, the loan and the interest that’s been building over time are paid back, usually from the proceeds of selling the home.

In Canada, reverse mortgages are offered by a few institutions. Talk to an experienced broker to choose the most suitable product for your situation.

Why Are There No Payments for Reverse Mortgages?

The biggest difference between a reverse mortgage and a regular mortgage is that there are no required monthly payments. That’s because the interest charges are simply added to your loan balance over time.

This means your loan amount grows gradually as the years go by. But you’re not expected to pay it off until the home is sold or the homeowner passes away. So instead of pulling money out of your bank account each month, the interest is pulled from your home equity.

That’s a huge relief for many retirees on a fixed income. You get to stay in your home and receive extra cash—without having to worry about making payments you can’t afford.

Can You Lose Your Home with a Reverse Mortgage?

This is one of the most common worries people have. And it’s understandable—your home is likely your biggest asset and your safe haven.

The answer is no, you won’t lose your home with a reverse mortgage as long as you:

Keep your property in good condition

Continue to live in the home as your primary residence

Stay up to date on your property taxes and home insurance

As long as you meet these conditions, the lender cannot force you out or take over your home. That protection is built into the Canadian reverse mortgage system.

Also, many people worry they’ll end up owing more than their home is worth. But Canadian reverse mortgages come with a “no negative equity guarantee.” That means if the loan ends up being more than the sale price of your home, your estate (or family) will not be on the hook for the difference. The lender absorbs the loss.

Reverse Mortgage Minimum Age and Requirements

To qualify for a reverse mortgage in Canada, you must meet some basic criteria:

You must be at least 55 years old. If you own the home with someone else, both of you must be 55 or older.

You must own your home. It has to be your primary residence, meaning you live there most of the time.

You must have equity in your home. That means your mortgage must be paid off or mostly paid off. If you still owe a balance, you can use the reverse mortgage to pay it off.

Lenders will also consider your property value, location, and the condition of your home. In general, homes in urban areas (like Toronto, Ottawa, or Vancouver) tend to qualify for larger reverse mortgage amounts because of their higher value.

You don’t need perfect credit or high income to qualify. The approval mostly depends on your age and home equity—not your credit score or employment history.

Do Reverse Mortgages Affect Your OAS or CPP?

This is a common concern—and the good news is: No, a reverse mortgage does not affect your Old Age Security (OAS) or Canada Pension Plan (CPP) benefits.

That’s because the money you receive from a reverse mortgage is not considered income by the government. It’s technically a loan, not a form of earnings. That means your OAS, CPP, and even GIS (Guaranteed Income Supplement) benefits are safe.

This is a big reason why some seniors prefer a reverse mortgage over withdrawing money from a registered retirement plan like an RRSP or RRIF, which would count as income and could reduce their government benefits.

How to Apply for a Reverse Mortgage in Ontario

If you’re thinking about getting a reverse mortgage in Ontario, the first step is to speak with a licensed mortgage broker who specializes in working with seniors.

Here’s what the application process usually looks like:

Initial conversation

Your broker will ask about your age, the value of your home, how much you owe on it, and what your goals are (e.g., paying off debt, helping your kids, or funding renovations).

Property and income review

While income isn't a major factor, the lender will still want to confirm your identity and property ownership, and ensure your home meets their guidelines.

Home appraisal

An appraisal is needed to confirm the current market value of your home. This helps the lender figure out how much equity you can borrow.

Legal advice

Before the reverse mortgage is finalized, you’ll need to get independent legal advice from a lawyer. This is a legal requirement and protects you by making sure you understand the agreement.

Approval and funding

Once approved, you’ll receive your funds as a lump sum, scheduled payments, or a line of credit—whichever you choose. You can use the money however you like.

The whole process usually takes about 2 weeks, depending on how quickly your appraisal and legal review are completed.

Pros and Cons of Reverse Mortgages in Canada

Like any financial decision, a reverse mortgage has both advantages and drawbacks. Let’s break it down.

Pros:

No monthly payments – You get access to your home equity without the pressure of paying anything back each month.

Stay in your home – You don’t need to downsize, sell, or move out.

Tax-free money – The funds are not considered income, so they won’t affect your government benefits.

Flexible use – Pay off debt, renovate your home, help your children, or boost your retirement income.

No negative equity guarantee – As long as you follow the terms, you will never owe more than the home is worth when it’s sold.

Cons:

Reduced inheritance – When your home is sold, the proceeds go toward paying back the loan, so your heirs will receive less.

Fees and legal costs – Expect appraisal fees, legal fees, and closing costs, which are typically a few thousand dollars.

Limited access – Not all homes qualify, especially rural properties or mobile homes.

It’s important to talk through these pros and cons with a broker and your family. For many seniors, the ability to age in place and reduce financial stress is worth the cost—but it’s not for everyone.

How Much Can You Borrow with a Reverse Mortgage?

How much you can borrow depends on a few things:

Your age

The appraised value of your home

The location and type of property

How much equity you already have (your existing mortgage balance, if any)

As a general rule:

If you’re 55, you can borrow about 20–25% of your home’s value.

If you’re in your 70s, you might access 35–45%.

In your 80s and up, the amount can go as high as 55% of your home’s value.

Let’s say you’re 70 years old and your home is worth $700,000 with no mortgage. You could potentially borrow around $280,000–$315,000 through a reverse mortgage.

If you still owe a small amount on your existing mortgage, the reverse mortgage will first pay that off. The remaining funds are yours to use however you choose.

What Happens When the Reverse Mortgage Matures?

You or your family won’t have to repay anything until:

You sell the home

You move out permanently (e.g., move into long-term care)

The last borrower on title passes away

At that point, the house is typically sold, and the loan is repaid from the proceeds. If there’s any equity left over, it goes to your estate or beneficiaries.

Let’s say your home sells for $700,000 and you owe $300,000 in reverse mortgage debt. After paying off the loan and closing costs, the rest—about $400,000—goes to your estate.

If the market declines and your home sells for less than the loan amount, the no negative equity guarantee kicks in. Neither you nor your estate would owe the lender anything extra.

Is a Reverse Mortgage the Right Choice for You?

Here are a few questions to ask yourself:

Do you want to stay in your current home long term?

Do you have enough equity built up in your home?

Are you struggling to keep up with bills, debt, or rising living costs?

Are you worried about outliving your savings?

Are you okay with the idea of leaving behind less inheritance?

If the answer is yes to most of these, a reverse mortgage might be a smart option. But it’s not something to jump into without careful thought. It’s important to speak with a licensed mortgage broker who understands reverse mortgages.

Many homeowners also find it helpful to involve their children or family in the conversation—especially if inheritance is a concern.