01. Who qualifies
Age 55 or older, the home is your principal residence, and the amount is based on your age, the home's value, and where it is. Income and credit are secondary.
Stay in your home. Use what it's worth.
A reverse mortgage lets homeowners 55 and older turn home equity into cash with no monthly payments. Interest accrues, and the loan is repaid when you sell, move out, or pass away. It fits some retirements well and others badly - this page is the honest version of both.
The mechanics are simple. The decision isn't. Here's what I make sure you understand before anything is signed.
Age 55 or older, the home is your principal residence, and the amount is based on your age, the home's value, and where it is. Income and credit are secondary.
Typically up to 55% of the home's value. The older you are, the higher the percentage. I'll get you an actual number from the lender, not a website estimate.
No monthly payments are required. Interest is added to the balance, which grows each year. The full amount is repaid when the home is sold, you move out permanently, or the last borrower passes away.
As long as you keep up property taxes, insurance, and maintenance, you or your estate will never owe more than the home's fair market value at the time it's sold.
Take it all at once, or set up regular monthly or quarterly advances. Taking less up front means less interest accrues.
Rates sit above a standard mortgage, and because nothing is paid monthly the balance compounds. Expect an appraisal, legal fees, and independent legal advice - required by the lender, and a good thing. I'll run 5, 10 and 15-year balance projections at that day's rate on our call.
About half the people who call me about a reverse mortgage end up doing something else. That's not a failed call - that's the point of it.
10+ years in the home
The longer you stay, the more sense it makes. Setup costs are spread over time and you avoid the cost and upheaval of moving.
Pension doesn't stretch
Scheduled advances can top up CPP, OAS, and a pension without selling the house or taking on a payment you can't carry.
Down payment gift
Passing on part of the estate while you're here to see it used - a down payment for a child or grandchild, for example.
Existing balance paid out
Paying out an existing mortgage or HELOC with a reverse mortgage ends the monthly payment. For a fixed-income household, that's often the whole reason.
Or maximizing the estate
If a move is likely soon, or preserving every dollar of equity for heirs is the priority, the setup cost and compounding work against you.
HELOC or standard refinance
If your income supports a HELOC or a conventional refinance, those are cheaper. I check that first, every time.
“If a HELOC or a downsize would serve you better, I'll say so. My job is the right answer, not the product.”- Jeremy LaHaie
Two lenders offer reverse mortgages in Manitoba: HomeEquity Bank (CHIP) and Equitable Bank. Both are federally regulated Canadian banks. I don't quote their rates here because rates change - I quote live on the call, and I run the same numbers for both.
Before we get to either, I ask three questions. Could you qualify for a HELOC or a standard refinance? Those cost less. Would downsizing leave you better off? Sometimes selling and buying smaller frees more cash with no interest at all. How long do you plan to stay? If it's under five years, this is usually the wrong tool.
If a reverse mortgage still makes sense after that, we look at lump sum vs scheduled advances, run the balance out at 5, 10 and 15 years so you and your family see how it grows, and I walk you to the independent lawyer the lender requires.
Bring your kids to the call if you want. Most families do, and the conversation goes better when everyone hears the same thing.
Not for missing a mortgage payment, because there isn't one. You keep title and stay as long as you live there. The obligations are to keep the property taxes and insurance paid and the home maintained - the same things you do now.
No. The loan is repaid from the sale of the home. With the no negative equity guarantee, if the balance ever exceeds what the home sells for, the lender absorbs the difference - your estate does not. Whatever is left after repayment goes to your heirs.
No. It's a loan, not income, so it isn't taxed and it doesn't reduce OAS or GIS. Talk to your accountant about your own situation, but for most people this is one of the reasons it works.
Yes, at any time. You repay the balance from the sale proceeds and keep the rest. Some lenders charge a prepayment fee in the first few years - I'll show you exactly what that is before you sign.
If the last borrower moves out permanently - into long-term care, for example - the loan becomes due, typically within a set period that gives the family time to sell. Temporary stays in hospital or care don't trigger it.
It depends on the rate and how long you hold it, and because there are no payments it compounds. I won't publish a table here because the rate changes - but on our call I'll run your actual numbers out to 5, 10 and 15 years so you see it in dollars, not percentages.
Questions answered by Jeremy LaHaie, mortgage professional with INVIS Inc., serving Winnipeg, Ste Anne, Steinbach, and all of Southeast Manitoba. Call or text (204) 995-7336.