Reverse mortgages, taught properly — then modelled against every alternative.
A reverse mortgage lets Canadian homeowners aged 55+ convert some home equity into tax-free cash without selling, moving, or making monthly payments. Interest accrues and the loan is repaid when you sell, move out permanently, or the estate settles. That's the whole product. Everything below is about whether it's right for you — and what the other options would actually leave you with.
How it works
The seven steps, the real rates, the closing costs, the penalties and the no-negative-equity guarantee.
The products
CHIP, CHIP Max, CHIP Open and Income Advantage — plus where a HELOC beats all four.
Who it fits
22 real situations, sorted into what's common, what's planning-dependent and what we'd caution against.
The illustration
Lender-style, year by year: balance, accrued interest, projected home value and the equity left in between.
Compare options
Four questions, then reverse mortgage, line of credit and selling side by side in real dollars.
Stay or downsize
The comparison only a dual-licensed broker-realtor can run: borrow and stay, or sell and rightsize.
What it genuinely does well
- No required regular mortgage payments
- You continue to own your home
- No immediate need to sell or move
- Funds as a lump sum, scheduled advances, or a combination — depending on the product
- Borrowed funds are generally not taxable, because they are loan proceeds
- Proceeds do not generally affect OAS or GIS, for the same reason
- Qualification is driven by age, equity, property and location — not employment income alone
- Existing mortgages and other secured debts can potentially be eliminated
- Equity can be used while you are alive, rather than existing only as a future inheritance
What it costs you
- Interest is added to the loan balance
- The amount owed grows over time when no payments are made
- Rates are usually higher than conventional mortgage or HELOC rates
- Available estate equity will normally be reduced
- Setup, appraisal, legal and discharge costs can apply
- Prepayment charges may apply
- You remain responsible for property taxes, insurance and maintaining the home
- Other secured borrowing options may be limited once the reverse mortgage is registered
- Selling soon after arranging one can make the costs disproportionately expensive
Do you recognise yourself here?
These are the situations where a reverse mortgage most often does what people hope it will do — with the trade-offs still stated plainly.
Eliminating a remaining mortgage payment
House-rich, cash-flow-poor. The home is affordable. The payment isn't.
Consolidating credit cards, lines of credit and tax debt
Retirement income disappearing into minimum payments on debt that never shrinks.
Creating a monthly cash-flow supplement
Not a lump sum — an extra $1,000 to $1,500 a month, drawn as needed.
Funding aging-in-place renovations
Make the home fit the next fifteen years of your life.
Paying for in-home care and health expenses
When health changes, selling the family home should not be the automatic first move.
Stay, unlock or downsize — the side-by-side
The comparison most lenders will not run for you, because one column ends their sale.
See both options with your own numbers
Because Tyler is licensed as both a mortgage broker and a realtor, we can show you the borrow-and-stay path and the sell-and-rightsize path on the same screen — including the selling costs, property transfer tax and moving costs most reverse-mortgage calculators quietly leave out.
Reverse mortgage
Illustrated at 7.99% — CHIP Max 5-year fixed, effective July 3, 2026. Semi-annual compounding, not in advance.
Downsize
Friction cost of moving: $106,600 in costs you never get back — plus the neighbourhood, the doctors and the stairs you already know.
Reading this honestly
On these assumptions, staying and borrowing leaves roughly $73,927 more after 10 years, largely because a larger home keeps appreciating and the move costs are gone forever. That gap shrinks fast if the market flattens. Change the appreciation rate and the replacement price — the answer moves, and knowing which way it moves is the whole point.
Educational estimate only — not a pre-approval, not an offer of credit, and not a market valuation. Reverse mortgage rates, qualifying amounts and terms are confirmed only through a full application, appraisal and independent legal advice. Downsizing figures use typical South Surrey / White Rock selling costs and current BC property transfer tax rates.
If you fit one of these buckets, you deserve to see every option — not just the one that pays us.
Tyler Waldron is licensed as both a mortgage broker (MB611612) and a realtor through Engel & Völkers. So alongside any reverse mortgage scenario, we'll also model what selling and rightsizing would actually leave you with — selling costs, property transfer tax, moving costs and all. Same advisor, both sides of the math, and no pressure to pick either one.