Why Do Seniors Take Out Reverse Mortgages?
A reverse mortgage can be a useful financial solution for Canadian homeowners aged 55 and older. But why do so many seniors consider this option? Here’s what you need to know.
What Is a Reverse Mortgage?
A reverse mortgage lets homeowners aged 55+ access a portion of their home equity as tax-free cash without selling their home or making monthly payments. The loan is repaid only when the homeowner sells, moves out, or passes away.
Top Reasons Seniors Use Reverse Mortgages
Supplementing Retirement Income: Many Canadians use a reverse mortgage to boost their retirement cash flow, especially if savings and pensions aren’t enough.
Staying in Their Home Longer: Seniors often want to “age in place.” A reverse mortgage provides funds for home maintenance, accessibility upgrades, or everyday expenses, making it easier to stay put.
Paying Off Debts: Reverse mortgages can help clear existing mortgages, credit cards, or other debts, reducing monthly financial stress.
Covering Healthcare Costs: Unexpected medical expenses, in-home care, or renovations for accessibility can be managed with reverse mortgage funds.
Helping Family: Some seniors use the funds to support children or grandchildren with education, down payments, or other needs.
No Monthly Payments: Unlike a traditional loan, there are no required monthly payments. The balance grows over time and is paid off when the home is sold or the estate is settled.
What to Consider
Reverse mortgages aren’t for everyone. Interest rates are typically higher than traditional mortgages, and the amount you owe grows over time if you are not paying down the interest. It’s important to understand the impact on your estate and to speak with a qualified mortgage professional before making a decision.
Learn More
For more details, check out these trusted Canadian resources:
Want to see if a reverse mortgage is right for you or someone you love? Book a free 30-minute discovery call with Dominic Mascoll at The Mortgage Marketplace:
📞 (416) 525-2918
📧 dmascoll@seventysevenpark.ca