If you’re 55 or older and a homeowner in Ontario, you’ve likely heard the term reverse mortgage floating around. Maybe a neighbour mentioned it, or your financial planner brought it up, or you’ve seen it in a headline. And while the idea sounds interesting, most people still ask the same question:
“Okay, but what is a reverse mortgage — really?”
Don’t worry. At Loft Financial, we explain this in plain English every single day, and we’re going to do the same for you here.
What Is a Reverse Mortgage? Let’s Keep It Simple.
A reverse mortgage is a special type of home loan for Canadians aged 55 or older that lets you access tax-free cash from your home’s equity — without having to sell your home or make monthly mortgage payments, it is what we like to refer to as payment optional.
Let’s break that down:
✓ You stay in your home
There is no requirement to move, downsize, or give up ownership. You stay on title.
✓ You receive tax-free money
This can be a lump sum, monthly amount, or a “flex plan” where you pull from it as needed.
✓ No monthly payments
You don’t need to make payments. Instead, the loan is repaid from the sale of the home later (usually when you choose to move, or your estate sells the property).
✓ You remain in control
You decide when to move. You decide how to use the funds.
Who Is a Reverse Mortgage For?
Common reasons our clients choose one:
- Your pension or retirement income isn’t stretching as far as you’d like
- You want to avoid selling your home
- You want to help children or grandchildren financially
- You’d like to pay off debt, increase your monthly cash flow, or stop drawing from investments
- You’re planning home renovations or accessibility upgrades
- You want a cushion so you can sleep better at night
If one or more of these resonate, keep reading.
How Much Can You Access?
Typically between 20% to 55% of your home’s value.
Factors include:
- Your age (the older you are, the more you qualify for)
- The location of your home
- Your home’s value
- Property type
Most of our clients are pleasantly surprised by their numbers.
“Will I Lose My Home?” (The #1 Myth)
The answer: Absolutely not.
You retain ownership, just like any other mortgage. Canadian lenders also offer a No Negative Equity Guarantee, meaning your estate will never owe more than the fair value of the home.
How the Loan Gets Repaid
A reverse mortgage typically gets repaid when:
- You sell the home
- You move out
- Or your estate sells the property
At that time, you repay the amount borrowed plus accrued interest.
Most families simply treat this the same way they treat any other mortgage repayment on sale.
What Can the Funds Be Used For?
Whatever matters most to you:
- Monthly income support
- Debt payouts
- Renovations or accessibility upgrades
- Travel
- Healthcare
- Helping kids buy a home
- Building an emergency cushion
There are no restrictions.
Is It Right For You?
It depends — but that’s where we come in.
We review your goals, your home value, your retirement income, and whether a reverse mortgage actually improves your financial comfort.
Many times it does. And sometimes there’s a better option. Our job is to help you weigh both.
Final Thoughts
A reverse mortgage is not a last resort, nor is it complicated. It’s a tool — one that, when used wisely, can help you enjoy retirement with more freedom, comfort, and peace of mind.
When you’re ready, we’re here to explore your options with you.
Welcome Home.
— The Loft Financial Team
