REVERSE MORTGAGES — WHAT YOU NEED TO KNOW

Reverse mortgages can be a smart option for homeowners 55+ who want to access equity without monthly payments.

But most people don’t understand how they actually work or when they make sense.

Here’s how they actually work 👇

1️⃣ What a reverse mortgage does

A reverse mortgage lets you access a portion of your home equity tax-free.

You stay on title and keep full ownership of your home.

✔️ no required monthly payments

✔️ funds can be taken as lump sum or in stages

✔️ interest accumulates over time

You only repay when you move, sell, or the home transfers to your estate.

2️⃣ CHIP Reverse Mortgage basics

This is the most common reverse mortgage product in Canada.

It allows homeowners 55+ to unlock a portion of their equity based on age and property type.

✔️ up to about 55% loan-to-value, depending on age and property

✔️ minimum initial advance amount applies

✔️ no traditional income or credit requirements

✔️ fixed and variable rate options are available

Approval is based more on your home and age than on your employment.

3️⃣ Income-style reverse mortgage options

Some programs work like a reverse mortgage but are designed to provide regular income.

They are ideal for homeowners who want predictable monthly or quarterly deposits.

✔️ lower maximum loan-to-value than lump-sum products

✔️ set monthly or quarterly planned advances

✔️ optional additional lump-sum withdrawals

✔️ still no required monthly payments

These options are built to supplement retirement income without selling your home.

4️⃣ When these products help most

Reverse mortgage solutions can stabilize cash flow in several real-world situations.

✔️ covering medical or in-home care costs

✔️ funding home renovations or accessibility upgrades

✔️ supplementing pension or retirement income

✔️ paying off existing debt without extra monthly pressure

✔️ gifting money to children or grandchildren

They help homeowners stay in their homes longer and maintain independence.

5️⃣ How they differ from traditional mortgages

Reverse mortgages are structured very differently from standard mortgages or lines of credit.

✔️ no amortization schedule

✔️ no regular payments required

✔️ no traditional debt servicing ratios

✔️ less focus on employment or credit

You must still keep your property taxes, insurance, and basic upkeep current.

6️⃣ Using them as part of inheritance planning

Some families use reverse mortgages as an “early inheritance” strategy.

Parents can help children or grandchildren now, when the money has the biggest impact.

✔️ support with down payments

✔️ help reduce or eliminate high-interest debts

✔️ provide stability for younger families

It lets you share your home’s equity while you are alive to see the benefits.

💬 Final Thought

Reverse mortgages aren’t right for everyone — but for the right homeowner, they can unlock flexibility and cash flow without selling the home you love.

If you want to explore whether a reverse mortgage fits your situation, message The Frontline Mortgage Group anytime. 💬