Pros and Cons of Reverse Mortgages in Canada

This podcast is based on data from the Financial Consumer Agency of Canada explaining reverse mortgages.

What the commercials leave out is that you are paying a much higher interest for this kind of loan. In some cases, it could result in loss of your home. 

Know all the facts. 

A reverse mortgage lets homeowners aged 55+ borrow against their home equity without selling it, providing tax-free funds. The text details eligibility, costs (including higher interest rates than other loans), and various ways to receive the funds (lump sum or regular payments). Crucially, it highlights the importance of considering other options and seeking professional advice before proceeding, alongside potential drawbacks such as higher interest and repayment obligations upon death. The document also covers default scenarios and consumer protection considerations.

For many of my own clients, the better option is cashing out and downsizing. That will leave you with a large sum of money in many cases. For some, the interest on the principal if invested in GICs or something else low risk can be substantial. A lot safer than a reverse mortgage. Click here for more info on the MortgageFreeOntario.com option.  

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