If you have spent decades paying down your mortgage and your home has grown significantly in value, you may find yourself in a situation that feels contradictory: you are sitting on substantial wealth but struggling to cover monthly expenses in retirement.
This is what financial planners often call being house rich and cash poor. And for a growing number of Canadian homeowners, a reverse mortgage is becoming part of the conversation.
BNN Bloomberg recently reported on this trend, noting that as home values across Canada have climbed and retirement costs have risen, more Canadians are exploring reverse mortgages as a way to access the equity in their home without selling it or taking on traditional monthly payments.
What Is a Reverse Mortgage?
A reverse mortgage is a loan available to Canadian homeowners aged 55 and older that allows you to borrow against the equity in your home. Unlike a traditional mortgage, you are not required to make monthly payments. Instead the loan is repaid when you sell your home, move out, or pass away.
In Canada, the two primary providers of reverse mortgages are HomeEquity Bank, which offers the CHIP Reverse Mortgage, and Equitable Bank.
The amount you can borrow depends on your age, the value of your home, and your location. Generally speaking, the older you are and the more your home is worth, the more you can access. Most lenders allow you to borrow up to 55 percent of your home’s appraised value.
You continue to own your home throughout the life of the loan. The lender does not take ownership. You are simply borrowing against the value you have already built.
When a Reverse Mortgage Might Make Sense
A reverse mortgage is not the right solution for everyone. But there are situations where it can provide meaningful financial relief:
You are retired and your pension or savings are not covering your monthly expenses
You want to stay in your home and do not want to sell or downsize
You need to cover unexpected medical costs or home repairs
You want to help a child or grandchild with a down payment without liquidating investments
You are carrying high-interest debt and want to consolidate at a lower rate
The key advantage is that the money you receive is tax-free. It does not count as income, which means it will not affect your Old Age Security or Guaranteed Income Supplement payments.
What to Watch Out For
A reverse mortgage comes with costs and considerations that every homeowner should understand before proceeding.
Interest accumulates over time. Because you are not making monthly payments, the interest compounds and is added to your loan balance. Over a long period this can significantly reduce the equity remaining in your home when it is eventually sold.
Early repayment penalties can be steep. If you decide to sell your home, move to a care facility, or repay the loan earlier than expected, you may face prepayment charges depending on your lender and the terms of your agreement.
Your estate will receive less. Whatever equity remains after the loan is repaid goes to your estate, but the longer the loan is outstanding, the less will be left for your heirs.
It is not your only option. Before committing to a reverse mortgage, it is worth exploring alternatives such as a home equity line of credit, downsizing, or drawing down registered savings in a tax-efficient way.
The Importance of Working With the Right Mortgage Professional
A reverse mortgage is a significant financial decision. The terms, costs, and long-term implications vary depending on your personal situation, your home, and the lender you choose.
This is not a product to arrange through a generalist. You want to work with a mortgage broker who has specific experience with reverse mortgage products and understands how they interact with your broader retirement plan.
Not every mortgage broker offers reverse mortgage expertise. Finding one who does, and verifying that they are properly licensed, is an important first step.
How to Find a Verified Mortgage Broker in Canada
VerifiedAdvisors.ca is Canada’s first national directory of independently license-verified mortgage brokers. Every broker listed on our platform has been verified against their provincial licensing authority, whether that is FSRA in Ontario, BCFSA in British Columbia, RECA in Alberta, or another provincial regulator.
You can search by city, specialty, and language to find a licensed mortgage professional in your area who has experience with reverse mortgages and retirement financing.
We do not provide financial advice and we do not recommend specific products. What we do is help you find a verified, licensed mortgage professional who can walk you through your options and help you make an informed decision.
Search for a verified mortgage broker near you at verifiedadvisors.ca.
IMPORTANT NOTE:
This article is for informational purposes only and does not constitute financial or mortgage advice. Please consult a licensed mortgage professional and a financial advisor before making any decisions about your home equity or retirement finances.
SOURCE REFERENCE:
BNN Bloomberg, July 9, 2026
https://www.bnnbloomberg.ca/business/real-estate/2026/07/09/house-rich-cash-poor-when-a-reverse-mortgage-might-make-sense/