Definition
A reverse mortgage is a mortgage for homeowners aged 55+, allowing them to withdraw up to 55% of their principal-residence value with no mandatory monthly payments. The two regulated providers in Canada are HomeEquity Bank (CHIP) and Equitable Bank (Flex).
How it works: you receive a lump sum or periodic payments. Interest accrues on the balance, which grows over time. The total balance (principal + interest) becomes payable when you sell the property, move permanently to a seniors' residence, or pass away. The property remains in your name and no one can evict you as long as you live in it and maintain it.
Pricing: rate typically 1 to 2% above a traditional mortgage (so 7.5-9% in May 2026). Origination fees CA$1,500-2,500, mandatory legal fees, independent legal advice required before signing in Québec (Civil Code + AMF). A solution to consider in retirement planning, complementing RREGOP/OAS/CPP, never as everyday financing.