Reverse Mortgages for Ontario Homeowners 65+

How it works

A reverse mortgage allows eligible homeowners, generally aged 55 or older in Canada, to access a portion of their home equity without making regular mortgage payments. Interest accrues against the balance, and the loan is typically repaid when the home is sold, when the homeowners no longer live there, or from the estate.

You continue to own and live in your home. You remain responsible for property taxes, insurance and maintenance, and for keeping the home in reasonable condition.

How much can be accessed

The available portion is generally a percentage of the home's appraised value, influenced by age, property type and location — older applicants typically qualify for a larger percentage. Any existing mortgage or secured line of credit usually has to be repaid from the proceeds, which reduces the net amount received.

The trade-off

Because no regular payments are required, interest compounds against the balance over time. The longer the arrangement runs, the more of the home's equity it consumes. Rates on reverse mortgages are generally higher than on conventional mortgage financing, which increases that effect.

For a household that intends to remain in the home for a long period and needs cash flow, that trade-off may be acceptable. For a shorter horizon, or where the goal is to preserve equity, it often is not.

Who it can suit

• Homeowners who want to remain in their home rather than sell.
• Households with significant home equity and limited income flexibility.
• Situations where making regular mortgage payments is not practical.
• Cases where the alternatives have already been reviewed and set aside for clear reasons.

Alternatives worth reviewing first

• A conventional refinance, where income supports the payments.
• A Home Line of Credit, where flexibility matters and payments are manageable.
• Downsizing, where remaining in the home is not essential.
• Other income sources or benefits available to the household.

Involve the people affected

This decision affects an estate, so I encourage clients to include their spouse or co-owner and, where appropriate, adult children in the conversation. Independent legal advice is standard for these arrangements, and it is genuinely valuable rather than a formality.

Take the time

There is no version of this decision that benefits from being rushed. If anyone is pressing for speed, that is a reason to slow down rather than to move.