What is a reverse mortgage?

Designed for homeowners aged 55 and older, a reverse mortgage is a loan that is secured against a borrower’s home, providing an opportunity for homeowners to tap into their home’s equity, tax-free.

​

With a reverse mortgage, you continue to maintain full ownership, title, and control of your home.

​

How much can I borrow with a reverse mortgage?

The amount you can borrow through a reverse mortgage is calculated based on your age, the appraised value of your home, and your lender’s policy. Generally, borrowers can expect to borrow up to 55% of the appraised value of their home. Borrowers may be able to receive their funds as a lump sum or spread out through regular monthly deposits. The borrower receives the money tax-free and there are no monthly mortgage payments.

​

Are there additional costs associated with a reverse mortgage?

The additional costs you can expect will vary depending on the product you choose; however, you can expect fees to include closing fees, a home appraisal, and independent legal advice.

​

Another cost consideration is that interest rates for reverse mortgages are generally higher than those of traditional mortgages.

​

How do I qualify for a reverse mortgage?

Borrowers must be 55 years of age or older, and they must use the home as their primary residence.

​

How is the reverse mortgage repaid?

The balance of your reverse mortgage is only due for repayment when you move or sell your home. Borrowers can pay through the proceeds from the sale of their home, or they can refinance with another mortgage. If the property is sold, all the equity remaining after the repayment of the loan is left to the homeowner or to their estate.

​

Why would anyone get a reverse mortgage?

You can use your reverse mortgage to boost your retirement income and cash flow, cover health expenses (including in-home care), purchase a second property, renovate your home, provide financial gifts to family (gifted down payment, help pay for a wedding, for example), travel, etc.

​

Think a reverse mortgage is right for you? Reach out if you have any questions or would like to get started, 604-831-4883 or nadia@nadiabove.ca.

​

If you’re interested in doing some reading, you can also learn more here.