Common Myths
If you've read alarming stories about reverse mortgages, they likely describe the U.S. system. Canadian reverse mortgages operate very differently — with regulated lenders, mandatory independent legal advice, and a no negative equity guarantee.
Myth: "The bank will take my home."
Fact: You keep full ownership and title. The lender registers a charge (like any mortgage), but the home is yours as long as you meet loan conditions.
Myth: "My heirs will be stuck with the debt."
Fact: Canadian reverse mortgages include a no negative equity guarantee. Your estate will never owe more than the home's fair market value. The lender absorbs any shortfall.
Myth: "I'll have nothing left for my children."
Fact: On average, CHIP customers retain over 50% of their home's value after repaying the loan. Your heirs inherit the remaining equity.
Myth: "It's a scam targeting seniors."
Fact: Reverse mortgages in Canada are offered by regulated financial institutions. Independent legal advice is required. The Government of Canada's FCAC provides consumer education.
Myth: "It's only for desperate people."
Fact: Many financially comfortable retirees use reverse mortgages strategically — to preserve investments, manage cash flow, or help family. It's a financial planning tool.
Myth: "It affects my CPP, OAS, or GIS."
Fact: Reverse mortgage proceeds are loan funds, not income. They do not affect CPP, OAS, or GIS. Consult an advisor about other income-tested provincial benefits.
Myth: "I could owe more than my home is worth."
Fact: All Canadian lenders guarantee you will never owe more than the fair market value. This is the no negative equity guarantee.
Frequently Asked Questions
What is a reverse mortgage?
A specialty loan for Canadian homeowners 55+ that converts home equity into tax-free cash without monthly payments. Repaid when you sell, move out, or pass away. Not suitable for everyone.
Do I still own my home?
Yes. Full ownership and title remain with you. The lender registers a charge, same as any mortgage.
How much can I borrow?
Up to 55% of your home's appraised value depending on age, location, property type, and lender.
Will it affect my CPP, OAS, or GIS?
No. Proceeds are loan funds, not income.
Do I pay taxes on the money?
No. The funds are a loan, not income, so they're tax-free.
What are my responsibilities?
Live in the home, pay property taxes and insurance, maintain the property.
What if I move into long-term care?
The loan becomes due if you permanently leave. If your spouse remains on title and stays, the loan continues.
Do I need good credit or income?
Income and credit are not key qualifying factors. Lenders review your ability to maintain property costs.
Can I owe more than my home is worth?
No. All Canadian lenders include a no negative equity guarantee.
What happens when the loan is due?
Heirs can sell and keep remaining equity, repay to keep the home, or walk away if balance exceeds value.
Who are the lenders in Canada?
HomeEquity Bank (CHIP), Equitable Bank (Flex), and Bloom Financial. We compare all three on your behalf.
Is a reverse mortgage right for me?
It depends on your situation. It's a specialty product not suitable for everyone. Discuss with us, your family, an advisor, and a lawyer.