How will a reverse mortgage affect your home equity | ReverseMortgageExpert.ca

For a Canadian homeowner who is 55 or older, a reverse mortgage may be an excellent way to improve financial liquidity, reduce financial stress, as well as secure a future inheritance for your spouse or children.
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Here are some of the highlights of a reverse mortgage:
- Loan amount is dispensable in different ways – lump sum, or some money upfront and the balance in instalments
- No monthly repayments required
- Borrowed amount is non-taxable
- No impact on your Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits, or income from Registered Retirement Savings Plan (RRSPs).
- You maintain ownership of the property

Any property appreciation or increase in value of your home will goes into your pocket. With reverse mortgage you only pay interest on the amount you owe and not on the appreciation or value gain.

The good news is that a reverse mortgage is a non-recourse loan. Which means, if the loan amount exceeds the value of the home, your heirs are not liable to make the excess payment, and the provider cannot claim repayment through their other assets[1]. That being said, it is always a good idea to talk to your children or inform your heirs when you are borrowing a reverse mortgage loan.

Some conditions may apply.