Reverse Mortgages in Ontario

By Jonathan Alphonso

A reverse mortgage in Ontario lets homeowners aged 55 or older borrow against their home equity — up to 55% of the appraised value — with no monthly payments required. The loan, plus the interest that accrues on it, is repaid when the home is sold, the owners move out, or the last borrower dies.

For older homeowners, a reverse mortgage is a way to turn built-up home equity into retirement income, renovation funds, or help for family — without selling the home or taking on a monthly payment. In Ontario, reverse mortgages are offered by two banks, and both can be arranged directly or through a mortgage broker. Mortgage Broker Store arranges reverse mortgages across Ontario and, as a direct private lender, also offers the main private alternative for homeowners who don’t fit the banks’ criteria.

How Does a Reverse Mortgage Work in Ontario?

A reverse mortgage flips the usual arrangement: instead of you paying the lender every month, the lender pays you, and the loan balance grows over time as interest accrues. You remain the owner of the home and stay on title — the lender registers a mortgage against the property, exactly as with a regular home loan.

You can receive the money in three ways, and most lenders let you combine them:

• One lump sum — often used to pay out an existing mortgage or fund a large expense
• Scheduled advances — set amounts on an agreed timetable
• Monthly payments — a steady income supplement

The minimum loan is typically $25,000. No repayments are required while you live in the home, but two conditions must stay in good standing: the property must remain insured, and property taxes must be kept current. The loan becomes due when the home is sold, when it stops being your primary residence, or when the last borrower dies — at which point the balance plus accrued interest is repaid from the sale proceeds or by the estate, and any remaining equity belongs to you or your beneficiaries.

Before funding, the lender will require that you receive independent legal advice, so that a lawyer acting only for you confirms you understand the terms.

How Much Can You Borrow with a Reverse Mortgage?

The major reverse mortgage providers lend up to 55% of the appraised value of the property. How much of that maximum you can actually access depends mostly on your age — the older you are, the more you can borrow — along with the property’s value, type, and location. The approximate ranges:

Age of youngest borrower	Approximate share of appraised value
55–59	~20%–30%
60–69	~25%–40%
70–79	~35%–50%
80+	up to 55%

These are estimates — the exact amount is set by the lender for each file. A worked example: on a property appraised at $1,000,000 with a $200,000 first mortgage still owing, a typical reverse mortgage would first advance $200,000 as a lump sum to pay out that mortgage (all existing mortgages and secured debts must be fully paid off — the reverse mortgage usually provides the money to do it), and could then pay the homeowners a monthly amount until the total borrowed reaches their approved limit.

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Reverse Mortgage Providers in Ontario: CHIP, PATH, and Private Options

Reverse mortgages are a niche product, and only two banks offer them in Ontario:

• The Canadian Home Income Plan, commonly known as CHIP, offered by HomeEquity Bank
• The PATH reverse mortgage, offered by Equitable Bank

With either option, you can arrange the loan directly with the bank or through a mortgage broker — a broker can compare both products for you and will also know when neither is the right fit. The third route is a private interest-accruing mortgage: the private-lender equivalent of a reverse mortgage, with no age requirement and a higher lending limit, covered in the next section.

/reverse-mortgages-in-ontario ✓ Rates as of July 2026

Reverse mortgage options in Ontario

Reverse mortgage options in Ontario

	CHIP (HomeEquity Bank)	PATH (Equitable Bank)	Private interest-accruing We offer this
Minimum age	55	55	None
Maximum share of home value	55%	55%	75%
Payout	Lump sum, scheduled or monthly	Lump sum or scheduled	Lump sum
Monthly payments required	None	None	None
Minimum home value	$250,000	Set by lender	None
Typical term	Open-ended	Open-ended	1 year
Best for	Long-term retirement income	Lump-sum flexibility	Under 55, urgent timelines, higher borrowing limits

CHIP and PATH criteria are the banks' published guidelines; private terms follow our lending guidelines and pricing.

Reverse Mortgage Rates and Fees (2026)

Reverse mortgage rates are higher than regular bank mortgage rates — that premium is the price of making no payments. CHIP and PATH each publish fixed and variable options, and the rate you’re offered depends on the term you choose, the payout structure, and current market pricing, so check the providers’ current rate sheets (or ask us — we quote both) rather than relying on any single published number.

On top of the rate, budget for one-time costs: closing and administrative fees typically in the $1,000 to $2,000 range, an appraisal, and the independent legal advice fee. Two cost features deserve special attention:

• Early repayment charges. Paying the loan off within the first several years (commonly five) triggers a prepayment charge — if you expect to sell soon, a reverse mortgage is usually the wrong tool.
• Compounding interest. Because nothing is paid monthly, interest compounds on the growing balance. The longer the loan runs, the faster the remaining equity shrinks — partially offset, historically, by the property appreciating.

The private interest-accruing alternative is priced like our other private mortgages: rates between 8% and 12% depending on loan-to-value, lender and broker fees of 2%–3% each ($3,500 minimum combined), an appraisal at about $600 plus HST, a $375 application fee, and legal costs of roughly $1,500–$3,000. Every current figure is published on our lending guidelines and pricing page.

Interest-Accruing Mortgages: The Private Alternative

Interest-accruing mortgages work like reverse mortgages in the way that matters most — no monthly payments are due — but they come from private lenders rather than banks. The key differences:

• The term is short — usually one year, renewable — rather than open-ended
• Funds are advanced as a lump sum rather than in installments
• Approval is based on home equity alone — no age minimum, no income or credit requirements
• Lending goes up to 75% of the appraised value instead of 55%
• Rates and fees are higher than bank reverse mortgages

This is the option we fund directly, and it fits situations the banks’ products can’t: homeowners under 55, properties below CHIP’s minimum value, files that need more than 55% of the home’s value, and urgent timelines — including paying out mortgage arrears or stopping a power of sale, where private funding can close in days rather than weeks. Many borrowers use it as a bridge: solve the immediate problem now, then refinance into a bank reverse mortgage or conventional loan later.

Pros and Cons of Reverse Mortgages

Pros include:

• No recurring loan payments need to be made
• Turns home equity into cash without selling the home
• The money you receive is not taxable income
• Does not affect Old Age Security or Guaranteed Income Supplement payments
• Ownership of the home does not change — you stay on title
• Flexible payout options: lump sum, scheduled advances, or monthly amounts
• No restrictions on how you use the funds, and no need to draw down RRSPs or TFSAs

Cons include:

• Higher interest rates than a conventional mortgage
• Interest compounds, so the loan gradually drains your home equity
• Early repayment charges apply if you pay the loan off in the first several years
• Having borrowed against the equity once, you have less room for any future borrowing
• When the last borrower dies, the estate must repay the loan, which can complicate settling the estate and leaves less for beneficiaries
• Setup fees are higher than on traditional mortgages

Worth clearing up three common misconceptions: the bank does not take ownership of your home — a reverse mortgage is just a mortgage and you remain on title; you can still sell whenever you choose (the loan is simply paid out at closing like any mortgage); and reverse mortgages are not a last resort for the house-poor — the strongest candidates are homeowners with substantial equity who simply prefer not to sell.

When a Reverse Mortgage Makes Sense

The product fits best when three things are true: you plan to stay in the home for the long term (early repayment charges punish a quick exit), your monthly budget is the constraint (no other equity product removes the payment entirely), and you want to preserve investments and pensions rather than drawing them down. It fits poorly if you expect to sell within a few years, if leaving maximum equity to your estate is the priority, or if a smaller, cheaper loan would solve the actual problem. Our articles on how to know if a reverse mortgage is right for you and whether you can lose your home with a reverse mortgage work through both decisions in more detail.

How to Qualify for a Reverse Mortgage

Qualification is straightforward compared to a bank mortgage — there is no income test or credit score hurdle. The requirements:

• Age: every applicant must be 55 or older
• Ownership: you must own the home, and everyone on title to the property must be on the reverse mortgage
• Primary residence: the property must be your principal residence — lived in at least six months of the year
• Home value: CHIP requires an appraised value of at least $250,000
• Clear secured debts: all existing mortgages and secured debts must be paid off at funding — normally out of the reverse mortgage advance itself

The property must stay insured and property taxes must be kept current for the mortgage to remain in good standing, and every borrower must receive independent legal advice before signing. If you fall short of any of these — most often the age requirement — the private interest-accruing route above is the workaround.

Alternatives to a Reverse Mortgage in Ontario

A reverse mortgage is one of several ways to unlock home equity, and it is not always the cheapest. Depending on your age, income, and how much you need, compare it against:

• Home equity loan — a lump sum secured against your equity, with monthly payments. No age requirement, available at any adult age, and interest doesn’t compound against your equity.
• Second mortgage — keeps your existing first mortgage in place and borrows against the remaining equity; often interest-only payments to keep the monthly cost down.
• Private mortgage lenders — equity-based first or second mortgages with flexible qualifying, useful when banks decline on income or credit.

The trade-off in one sentence: the alternatives require monthly payments but preserve your equity and cost less to set up, while the reverse mortgage costs more over time in exchange for requiring nothing each month. Current rates for every private option are on our lending guidelines and pricing page.

Reverse Mortgages Across Ontario

We arrange reverse mortgages and private interest-accruing alternatives across the entire province — Toronto and the GTA (including Mississauga, Brampton, Etobicoke, and Scarborough), Hamilton, Burlington, Oshawa and Durham Region, London, Ottawa, and Northern Ontario communities. The 55% lending cap is the same everywhere, so higher property values translate directly into larger available amounts: a Toronto homeowner with a $1.2-million detached home has roughly twice the reverse-mortgage room of the same borrower in a $600,000 property. Wherever the home is, the assessment starts the same way — a same-day review of your age, property value, and what’s owing.

References

• Financial Consumer Agency of Canada — Reverse mortgages
• HomeEquity Bank — CHIP Reverse Mortgage
• Equitable Bank — Reverse mortgage products

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