Reverse mortgage questions and myths in BC

No. You keep title and you keep living in your home. A reverse mortgage is a loan secured against your home, not a sale. The lender registers a mortgage. The lender does not become the owner. You stay responsible for property taxes, home insurance, and keeping the home in good repair.

Not just because the lender wants to. You can stay in your home as long as you live there and keep the loan in good standing: pay your property taxes, keep the home insured, keep it in good repair, keep living there as your main home, and follow the loan terms. If those slip, the loan can go into default and the lender can require it to be repaid, which can mean the home is sold. The loan also usually comes due when you sell, when the last borrower moves out for good, or after the last borrower passes away. Ask for the exact triggers in writing, and get independent legal advice before you sign.

Interest is added to the balance, so the amount owed grows and the equity left in the home can shrink. Some products include protection that limits what you or your estate owe to the home's fair market value when the loan comes due. It is not part of every product in Canada, and terms vary by lender. Conditions apply, such as keeping up taxes, insurance, and maintenance. Some fees and interest after the due date may not be covered, so ask for current terms. This is not a promise about how much equity will be left.

Reverse mortgage rates are typically higher than conventional mortgage rates, and typically higher than a home equity line of credit. The lender receives no regular payments, and the loan can run for many years. A higher rate does not by itself mean the loan is the wrong tool, and it does not mean it is the right one. If you qualify for a cheaper option and can comfortably make the payments, that option is usually the better fit. If monthly payments are the problem, compare the total cost over the years you expect to stay, including fees and any prepayment charges. Any rate you see in an example on this site is illustrative only and is not a quote. Compare your options and get independent legal advice before you decide.

No. It is one option for homeowners 55 and over who want to stay in their home. It can fit when cash flow is tight and a regular mortgage or a home equity line of credit is not a good match. It is also not right for everyone. If a cheaper tool solves the problem, use that one. Compare a home equity line of credit, BC property tax deferment, renting a suite, help from family, or downsizing. Interest compounds, so the balance grows the longer the loan runs. Look at the details with your family, and get independent legal advice before anyone signs.

Often yes, subject to lender approval. A reverse mortgage usually pays out the mortgage or other charges already on title, and you receive what is left. The cash in hand is less than the full amount. There has to be enough equity, and every owner on title applies together. Each owner on title must be 55 or older. The lender decides after a valuation. Nothing on this page is an approval.

Sometimes yes, and sometimes no. If you qualify for a HELOC and can comfortably make the monthly payments, a HELOC is usually cheaper, because those rates are typically lower. If monthly payments are what you are trying to remove, or your retirement income will not qualify you for a HELOC, a reverse mortgage is often the better fit. Compare both on total cost, the payment you would actually have to make, the fees, and what happens if your income changes. A HELOC that you can only keep up by drawing on it to pay its own interest is worth a careful look beside a reverse mortgage. Put both options side by side, and get independent legal advice before you decide.

It depends on whether that spouse is a borrower on the loan. If both spouses are on title and on the loan, the loan usually stays in place while either of you lives in the home and the loan terms are met. No regular payments are required. The surviving spouse can stay in the home. Because many lenders base the amount on the younger spouse's age, the amount you can borrow may be lower when both of you are on the loan. If a spouse is not a borrower, the loan can come due when the borrowing spouse dies or moves out, even if the other spouse still lives in the home. That can mean repaying the balance or selling. Every owner on title must be 55 or older. Ask each lender, in writing, what happens to a spouse who is not on the loan. Both spouses should get independent legal advice before anyone signs.