Borrowing to invest
The interest compounds with certainty. The returns do not.
The person
- Substantial equity and an interest in leveraged investing
The problem
If the mortgage costs around 7% and the portfolio is expected to earn around 7%, there is no strategy here — after fees, taxes and risk, the expected spread may be negative.
Only considered where the after-tax expected return reasonably exceeds the borrowing cost, the horizon is long, the portfolio is diversified and the borrower can absorb significant losses.
Can home equity form part of an investment strategy? Sometimes — and only after the borrowing cost, taxes, risk, horizon and estate impact are compared.
The numbers we'd put in front of you
- Borrowing cost against realistic after-tax expected return
- Downside scenarios, stated in dollars
- Whether interest may be deductible — traced to income-producing use, confirmed with a tax adviser
- Impact on future care funding
Strong fit when
- Long horizon, stable cash flow, diversified portfolio
- Confirmed tax treatment and a coordinated planner
- The borrower can explain the downside in their own words
Weak fit when
- Speculation, crypto, concentrated stocks or a family member's business
- Borrowing the maximum because 'real estate always goes up'
- Investing purely to offset the reverse-mortgage interest
- Any adviser earning commission on both sides
The honest caveat
Compound interest raises additional deductibility issues under Canadian tax rules, including when it is actually paid. This requires individualized tax advice. We will never advertise this.
Before you assume this is the answer
If you fit this situation — or any of the others in the library — a reverse mortgage is one option, not the option. Because Tyler is licensed as both a mortgage broker (MB611612) and a realtor through Engel & Völkers, we'll also model what selling and rightsizing would leave you with, so you can see every available route and choose the one that makes the most sense to you. Run both below.
Model this: Borrowing to invest
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.
Educational information only. Not a pre-approval and not advice about your specific circumstances. Amounts, rates and eligibility are confirmed only through a full application, appraisal and independent legal advice.
Related situations
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.