Reverse mortgages are designed to allow you to access up to 55% of your home’s equity, thereby allowing you to convert your home equity into cash. This can be done as either a one-time lump sum payment, or you can choose to structure it to receive monthly payouts. The money received through a reverse mortgage can be used to pay off existing debts, gift money to family, expand the quality of life, add safety features to the home, or expand your investment portfolio.
Reverse mortgages are designed for Canadians who are 55+. The goal is to allow these individuals to tap into the equity of their home to assist in comfortable financial living. While the focus of a reverse mortgage is on older individuals, this is also a great option for individuals wanting to assist their elderly parents. Instead of selling and moving to a care home or assisted living, some individuals prefer to stay where they are familiar and opt for in-home care. A reverse mortgage is a terrific way to access the equity in the home, month by month, to pay for those care costs.
Benefits of a reverse mortgage
The benefits of a reverse mortgage don’t just stop at the ability to cash in on your home’s equity! In fact, these benefits also include:
- No monthly mortgage payments
- No income or credit qualifications
- Very low / little paperwork required
- Title and ownership of property remain in homeowner’s name
- Flexible options to break term early and to pay interest off monthly, if preferred
- Penalty waived in the event of death or care home placement to preserve the estate
Who offers reverse mortgages in Canada?
There are two Canadian Schedule I banks that offer reverse mortgages: Equitable Bank and Home Equity Bank. Both banks’ reverse mortgage products are similar in their design and function. We can help you determine which is better suited to your needs.