Reverse Mortgage Rates in Canada

Compare current reverse mortgage rates in Canada from CHIP, Equitable Bank, Home Trust, and Bloom. When comparing reverse mortgage rates, look beyond the headline rate and compare APR, fees, payment options, prepayment terms, and whether the rate shown is for a new mortgage, a reset, or an additional advance. The reverse mortgage rates shown below apply to newly originated reverse mortgages. APRs are shown for comparison and include interest costs along with certain fees, such as legal fees, appraisal fees, and other closing costs.

Today's Reverse Mortgage Rates

A reverse mortgage lets you access money using your home equity without requiring any monthly mortgage payments. This lets homeowners over the age of 55 borrow money and not have to worry about paying it back until they choose to sell their home. In the meantime, interest will accumulate on their reverse mortgage. Use this page to compare reverse mortgage interest rates, fees, and term options for reverse mortgage lenders in Canada.

Equitable Bank offers three reverse mortgage products: Reverse Mortgage Flex, Flex PLUS, and Flex Lite. The Flex and Flex Lite reverse mortgages are available to Canadian homeowners aged 55 or older, while the Flex PLUS has a higher minimum age requirement of 70. Depending on the product, borrowers may be able to access between 15% and 59% of their home's value, and all three products currently require a minimum appraised home value of $250,000. Equitable also charges a $995 set-up fee, in addition to appraisal, legal, and closing costs.

Flex is the standard option for most borrowers, Flex PLUS allows a higher borrowing percentage for older homeowners, and Flex Lite offers a lower borrowing cap with a simpler lump-sum structure. Equitable also distinguishes between origination rates and reset rates for Reverse Mortgage Flex, which makes it especially important to compare the right rate type.

Equitable Bank Flex, Flex PLUS, and Flex Lite

Equitable Bank's reverse mortgage products are designed for different borrowing needs. Reverse Mortgage Flex is the core product and allows lump-sum, single, and scheduled advances. Flex PLUS is aimed at older homeowners who want access to a higher percentage of their home equity. Flex Lite offers a lower maximum borrowing limit and a lump-sum-only structure, but it may come with a lower posted rate than the other Equitable products. All three products include a no negative equity guarantee, subject to the borrower meeting their mortgage obligations.

Equitable Bank Reverse Mortgages Comparison

	Flex	Flex PLUS	Flex Lite
Minimum Age	55	70	55
Maximum Borrowing Limit (% of Your Home Value)	15% - 55%	45% - 59%	15% - 40%
Minimum Home Value	$250,000	$250,000	$250,000
How Can I Receive Payments?	Lump-Sum Single and Regularly Scheduled Advances	Lump-Sum Single and Regularly Scheduled Advances	One-time Lump-Sum

HomeEquity Bank offers several reverse mortgage products in Canada, including CHIP Reverse Mortgage, Income Advantage, CHIP Max, and CHIP Open. Depending on the product, homeowners aged 55 and older may be able to access up to 55% of their home equity without regular monthly mortgage payments.

Types of HomeEquity Bank CHIP Reverse Mortgages

Each HomeEquity Bank reverse mortgage product serves a different purpose. CHIP Reverse Mortgage is the standard option and can provide a lump sum or a combination of lump sum and future advances. Income Advantage, sometimes referred to as Income Solution, is structured for borrowers who want scheduled advances over time.

CHIP Max is designed to let younger eligible borrowers access a higher portion of their home equity, while CHIP Open is aimed at borrowers who want the ability to repay in full at any time without prepayment penalties.

For most clients, HomeEquity Bank says the closing fee on standard CHIP products is $1,795, while CHIP Open has a higher closing-cost structure. CHIP deducts this fee from your reverse mortgage proceeds.

HomeEquity Bank CHIP Reverse Mortgages Comparison

	CHIP	Income Advantage	CHIP Max
Minimum Age	55	55	55
Maximum Borrowing Limit (% of Your Home Value)	55%	55%	55%
Minimum Home Value	$250,000	$250,000	$300,000
How Can I Receive Payments?	Lump-Sum Single and Regularly Scheduled Advances	Initial Lump-Sum, then Regularly Scheduled Advances	Lump-Sum Single and Regularly Scheduled Advances

CHIP Reverse Mortgage Minimum Borrowing Amounts

HomeEquity Bank's CHIP reverse mortgages have minimum initial advance amounts, with future advances after the mortgage is set up. CHIP Reverse Mortgage, CHIP Max, and CHIP Open require a minimum initial advance of $25,000, while CHIP Income Advantage has a lower minimum initial advance of $20,000.

For borrowers who want to receive funds over time, the mortgages differ slightly. CHIP Income Advantage is for those who want scheduled payments, and so requires a minimum $1,000 monthly advance or $3,000 quarterly advance. Otherwise, CHIP Reverse Mortgage, CHIP Max, and CHIP Open allow optional future advances with a $5,000 minimum per advance.

• CHIP Income Advantage: $20,000 minimum initial advance, plus at least $1,000 monthly or $3,000 quarterly advances required
• CHIP Reverse Mortgage: $25,000 minimum initial advance, with optional later advances of at least $5,000
• CHIP Max: $25,000 minimum initial advance, with optional later advances of at least $5,000
• CHIP Open: $25,000 minimum initial advance, with optional later advances of at least $5,000

Home Trust is the newest lender to offer reverse mortgages in Canada as they introduce the EquityAccess reverse mortgage product line, which includes EquityAccess, EquityAccess+, and EquityAccess Boost. EquityAccess and EquityAccess+ are available to homeowners aged 55+, while EquityAccess Boost has a minimum age of 70. Home Trust says eligible homeowners may be able to access up to 59% of their home equity, depending on the product and underwriting criteria.

Home Trust's reverse mortgages are currently available through mortgage brokers in Ontario, Nova Scotia, Alberta, and British Columbia. Home Trust also says its reverse mortgages include a no negative equity guarantee, which generally means you will not owe more than the fair market value of your home at repayment, provided you continue to meet your mortgage obligations.

When comparing Home Trust with other reverse mortgage lenders, borrowers should look beyond the posted rate. Home Trust says their APR includes the interest and applicable fees, and notes that their reverse mortgage costs may also include a set-up fee, appraisal fee, legal fees, and closing charges. Like other reverse mortgage lenders, Home Trust requires independent legal advice during the application process.

Bloom offers reverse mortgages to homeowners aged 55 and older in Ontario, Alberta, and British Columbia. Like other reverse mortgage lenders, Bloom allows eligible homeowners to access up to 55% of their home value without regular monthly payments, while keeping ownership of the home. Bloom also emphasizes transparent flat fees and a simple fee structure, which can make it easier for borrowers to compare the all-in cost against other reverse mortgage options.

Bloom's current fees are a one-time processing fee of $1,650, an appraisal fee of $350, and an ILA (independent legal advice) certificate fee of $300, for a total of $2,300 deducted from proceeds. Bloom also requires the property to be a principal residence, the reverse mortgage to be in first position, and any existing mortgage to be paid off.

When comparing reverse mortgage rates, it is important to look at APR and fees, not just the posted rate. Reverse mortgage lenders can charge setup, appraisal, legal, and closing costs that materially increase the cost of borrowing. That is why two reverse mortgages with similar interest rates can still have different total costs. Equitable Bank's reverse mortgages currently include a $995 set-up fee plus appraisal, independent legal advice (ILA) and other legal fees, and other closing costs. HomeEquity Bank says the closing fee on standard CHIP products is $1,795 for most clients, while CHIP Open has higher closing costs of $2,995 or 1.25% of the loan amount, whichever is higher. Bloom currently advertises flat fees totalling $2,300.

APR is useful because it combines the interest rate with certain upfront costs and expresses them as an annualized borrowing cost. On lender rate pages, APR examples are typically based on a sample initial reverse mortgage amount and term, which means the exact APR you receive will differ depending on your mortgage size, term, product, and fees.

How to Compare Reverse Mortgage Rates

When comparing reverse mortgage rates in Canada, do not focus only on the headline rate. You should also compare:

• APR
• Upfront fees and closing costs
• Whether the rate is fixed, variable, or for an open mortgage
• Payment options, such as lump sum or scheduled advances
• Prepayment terms and penalties
• Product eligibility, including minimum age, minimum home value, and lending area

A reverse mortgage with a slightly lower rate is not always the cheaper option if its fees or prepayment terms are less favourable.

Why Are Reverse Mortgage Rates Higher?

Reverse mortgage rates are usually higher than regular mortgage rates and HELOC rates because the lender is repaid later and takes on more uncertainty over time. No regular monthly payments are required, interest is added to the balance, and repayment is usually delayed until the borrower sells, moves out, dies, or otherwise reaches a due event under the mortgage terms. That added risk is one reason reverse mortgage rates and APRs are generally higher than conventional mortgage borrowing costs.

How Is Interest Calculated on Reverse Mortgages?

Reverse mortgage interest is charged only on the amount you actually borrow, not on the full amount you may qualify for. This makes it similar to calculating interest on a HELOC. For fixed-rate reverse mortgages, interest is typically charged daily and compounded semi-annually. For variable-rate products, interest is generally charged daily, and the rate can change based on the lender's prime rate and spread. Since interest is added to the balance over time, the amount owing grows unless the borrower makes voluntary payments or prepays part of the loan.

Canadian reverse mortgage products by CHIP, Equitable, and Home Trust also include a no negative equity feature, which means the borrower will not owe more than the fair market value of the home at repayment, provided the borrower meets their mortgage obligations.

Reverse Mortgage Interest Calculation

Let's look at a home that has an appraised value of $500,000. You are 80 years old, which qualifies you to borrow a maximum of 55% of your home's value. You choose to borrow a lump sum of $100,000 for a 5-year term with Equitable Bank. With Equitable Bank's Flex reverse mortgage, your annual reverse mortgage rate is 6.59% before fees.

To calculate your reverse mortgage interest:

1. Convert to a daily interest rate

   Reverse mortgage interest rates are quoted based on an annual interest rate. However, reverse mortgage interest is charged on a daily basis. This is similar to how interest is charged for a credit card. We can simply divide the annual reverse mortgage rate by 360 to get a daily rate.

   6.59% / 360 days = 0.018306%/day

2. Calculate the daily interest charged

   To calculate the daily interest charged, multiply the daily interest rate by the amount borrowed, which is $100,000.

   $100,000 x 0.018306% = $18.31 per day

3. Compound interest

   Interest is only compounded twice a year, semi-annually. This means that the first six months are not compounded. Since interest costs $18.31 per day for a $100,000 mortgage, multiply by six months.

   $18.31 x 180 days = $3,296

   After six months, the reverse mortgage balance is now $103,296. Interest will now be charged on top of the $3,296 interest, which is called compound interest. First, calculate the daily interest charged, then multiply by another six months.

   $103,296 x 0.018306% = $18.91 per day

   $18.91 x 180 days = $3,404

4. Add interest

   Add the interest to the existing mortgage to get your new mortgage balance.

   $103,296 + $3,404 interest = $106,700

   The total interest for one year would be $6,700 on a $100,000 reverse mortgage at a 6.59% interest rate.