Canada Reverse Mortgage Calculator
See how much home equity you could access at 55+, and project how the loan balance grows against your home value over time. Based on FCAC (Government of Canada) guidance — borrow up to 55%, tax-free, with no effect on OAS or GIS.
Enter Your Details
Add the age of the youngest borrower (all owners on title must be 55+) and your estimated home value in CAD.
Choose how you access it
Select a lump sum or regular monthly advances, then set the amount you want to draw.
Review the Breakdown
See the estimated balance, interest accrued and equity remaining over your chosen period, plus borrowing capacity and rate sensitivity.
Canadian Reverse Mortgage Calculator
Estimate equity you can access · project the loan over time
Projection Summary
LUMP SUMYour reverse mortgage projection
A plain-English read of how the loan balance grows and what it may leave in home equity — based on the inputs above and FCAC (Government of Canada) guidance. Figures are estimates only, not a prediction.
Balance vs home value over time
How the compounding loan balance tracks against the projected home value, and the equity remaining between them. Interest compounds on the Canadian semi-annual convention.
| Year | Loan Balance | Home Value | Equity Remaining |
|---|
How much you may be able to access
Per FCAC, you may usually borrow up to 55% of your home's value. The exact amount depends on your age (and the age of others on title), your home's condition, type, location and appraised value, and your lender. The older you are, the more you can typically access. The percentages below are an illustrative guide only.
| Age | Est. LVR (illustrative) | Est. on This Home | Position |
|---|
How sensitive is the balance to the rate?
Reverse mortgage rates are higher than conventional mortgages and vary by lender and term. Because no payments are made, a higher rate compounds into a much larger balance. This shows the projected balance on the same drawdown at your rate, and at 2 percentage points below and above it.
How Reverse Mortgages Work in Canada
A reference guide to releasing home equity in retirement — how much you can access, how the loan grows, how it compares to other options, and the tax and benefit treatment. All figures verified against official sources.
Releasing Equity in Retirement
Many older Canadians are house-rich but cash-constrained — much of their net worth is tied up in the family home. A reverse mortgage lets homeowners aged 55 or older (and any co-owners on title) borrow against that equity without selling and without making regular payments while they live in the home as their primary residence.
Per FCAC, you may usually borrow up to 55% of your home's current value. The funds are tax-free and do not affect OAS or GIS. Interest is charged and compounds over time, adding to the balance, which is repaid when the home is sold, you move out, or from your estate. Because no payments are made, the balance grows and gradually reduces the equity available for other purposes or as an estate.
Ways to Receive the Money
Depending on the lender and product, equity can be released in different forms. Each affects how interest accrues and how quickly the balance grows.
Lump Sum
A single tax-free amount paid upfront. Interest compounds on the full balance from the start, so this accrues the most interest over time. Often used to clear an existing mortgage, fund renovations, or cover one-off costs.
Regular Advances
Funds received as recurring payments (for example monthly or quarterly) to supplement retirement income. Because the balance builds gradually, less interest accrues early on than with an equivalent lump sum.
Combination
A mix of an initial lump sum and ongoing advances. This can balance an immediate need with a steady income stream while keeping early interest lower than a full lump-sum draw.
No Negative Equity
Most Canadian reverse mortgages include a no negative equity guarantee, which generally means you won't owe more than the fair market value of your home at repayment — provided you keep up property taxes, insurance and maintenance.
Sources
Key Comparisons
How a reverse mortgage compares to other ways of accessing equity or income in retirement. Features and eligibility vary — these are general descriptions only.
Reverse Mortgage vs HELOC vs Downsizing
| Factor | Reverse Mortgage | HELOC | Downsizing |
|---|---|---|---|
| Minimum age | 55 (all on title) | No age minimum | None |
| Regular payments | None required | Interest payments required | None |
| Income/credit qualifying | Generally not required | Income & credit assessed | Not applicable |
| Stay in home | Yes | Yes | No — you sell & move |
| Interest rate | Higher than conventional | Lower than reverse mortgage | None |
| Effect on OAS/GIS | None (tax-free funds) | None (borrowed funds) | Depends on proceeds |
Reverse Mortgage Funds vs RRSP / RRIF Withdrawals
| Factor | Reverse Mortgage | RRSP / RRIF Withdrawal |
|---|---|---|
| Treated as income? | No — borrowed money | Yes — taxable income |
| Income tax | Tax-free | Taxed at marginal rate |
| OAS clawback risk | None | Can trigger clawback |
| GIS impact | None | Can reduce GIS |
| Repaid? | Yes — from home sale/estate | No — it's your own savings |
Worked Examples
Illustrative scenarios showing how borrowing capacity and compounding apply in practice. Figures are examples only, use a 7% p.a. illustrative rate compounded semi-annually, exclude fees, and do not reflect any individual's circumstances.
Reverse Mortgage & Home Equity Snapshot
Borrowing capacity by age, how the loan compounds, and how rates compare
FCAC & Bank of Canada data · current 2026Borrowing & Balance Analysis
Capacity by age, balance growth, and rate impact
Compounding by Interest Rate
Balance on CAD 100,000 lump sum over 25 years
Loan vs Equity (15-year sample)
CAD 100k lump @7% · home CAD 800k @3% growth
Interest Accrued by Rate
Interest on CAD 100k lump sum over 15 years
| Age of borrower | Est. LVR (illustrative) | On CAD 500k home | On CAD 800k home | On CAD 1.2M home |
|---|
Reverse Mortgage & Home Equity Updates
Official guidance from the Financial Consumer Agency of Canada (FCAC), the Bank of Canada, the Canada Revenue Agency and the Government of Canada affecting reverse mortgages — sourced from government channels.
Bank of Canada Holds Policy Rate at 2.25%
The Bank of Canada held its target for the overnight rate at 2.25% on 29 April 2026, with the Bank Rate at 2.5%. Reverse mortgage rates are set by individual lenders and sit well above the policy rate.
Key Points
- Overnight rate held at 2.25%, unchanged since October 2025
- The policy rate influences prime and variable lending rates across Canada
- Reverse mortgage rates are higher than conventional mortgages and HELOCs
- Next scheduled rate announcement: 10 June 2026
Impact
A stable policy rate provides a steadier backdrop for borrowing costs, though reverse mortgage pricing varies by lender and term.
What to Watch
Movements in the policy rate can flow through to the rates lenders quote on equity-release products.
FCAC: You May Usually Borrow Up to 55% of Home Value
The Financial Consumer Agency of Canada confirms that homeowners aged 55 or older may usually borrow up to 55% of the current value of their home through a reverse mortgage, with the maximum depending on age, the home, and the lender.
Key Points
- Available to homeowners usually aged 55 or older — all individuals on title must meet the age requirement
- You may usually borrow up to 55% of your home's current value
- The maximum depends on your age (and others on title), the home's condition, type and appraised value, and your lender
- The home must usually be your primary residence (lived in at least 6 months a year)
Impact
Sets a clear ceiling on how much equity can be released, with the exact figure assessed by the lender.
What to Watch
The older the youngest borrower, the more can typically be accessed — but more equity released means faster compounding of the balance.
Funds Are Tax-Free and Don't Affect OAS or GIS
According to the Government of Canada, reverse mortgage money does not affect the Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may be getting, because the funds are borrowed money rather than income.
Key Points
- Reverse mortgage funds are tax-free — treated as a loan, not income
- They do not affect OAS or GIS benefits you may be receiving
- This differs from RRSP or RRIF withdrawals, which count as taxable income
- Funds can be received as a lump sum, regular advances, or a combination
Impact
Equity can be released without increasing taxable income or reducing income-tested benefits like GIS.
What to Watch
Other income sources still affect benefit calculations; the neutrality applies specifically to the reverse mortgage funds.
FCAC: Understand the Costs Before You Borrow
FCAC sets out the costs and considerations of a reverse mortgage, noting that interest rates are generally higher than for most other types of mortgages and that several upfront fees may apply.
Key Points
- Interest rates are generally higher than other mortgages, and interest compounds on the balance
- Possible costs include a home appraisal fee, independent legal advice, and set-up or administration fees
- You remain responsible for property taxes, insurance and home maintenance
- The balance is repaid when you sell, move out, or from your estate; default terms can also trigger repayment
Impact
Total cost over time can be significant because no payments are made and interest compounds.
What to Watch
Comparing rates, terms and fees across lenders — and borrowing only what is needed — affects the long-term cost.
Policy Rate Steady Through Recent Decisions
The Bank of Canada has held the policy interest rate at 2.25% since October 2025, with rate decisions following a scheduled calendar of eight announcements a year.
Key Points
- Policy rate maintained at 2.25% across consecutive decisions
- The Bank makes scheduled announcements roughly eight times a year
- Rate decisions weigh inflation, growth, and global conditions
- Lender pricing for reverse mortgages reflects funding costs and product risk, not just the policy rate
Impact
A period of rate stability can make it easier to compare reverse mortgage offers across lenders.
What to Watch
Scheduled announcement dates are published in advance by the Bank of Canada.
Borrowed Money Is Not Taxable Income
Under Canada's income tax rules, money you borrow is not treated as income. Because reverse mortgage proceeds are a loan secured against your home, they are not included in taxable income.
Key Points
- Loan proceeds are not income and are not subject to income tax
- This is why reverse mortgage funds do not appear on your tax return as taxable income
- Tax treatment of any interest deductibility depends on how funds are used and personal circumstances
- Estate and capital matters on sale of the home are separate considerations
Impact
Releasing equity does not by itself increase your income tax for the year.
What to Watch
For questions on interest deductibility or estate implications, a qualified tax professional should be consulted.
Reverse Mortgages in Canada — Frequently Asked Questions
Common questions about reverse mortgages in Canada — how they work, how much you can borrow, costs, tax and benefit treatment, risks and alternatives — verified against official guidance.
Important Disclaimer
For educational and informational purposes only. This calculator produces estimates of how a reverse mortgage balance may grow and what equity may remain in a home over time, based on the inputs provided. It reflects the Government of Canada (FCAC) guidance that homeowners aged 55 or older may usually borrow up to 55% of home value, and assumes interest compounds with no payments using the Canadian semi-annual convention. The per-age borrowing percentages shown are an illustrative guide only, not lender quotes, and the default interest rate is illustrative — actual reverse mortgage rates are higher than conventional mortgages and vary between lenders and products. The calculator simplifies many aspects of reverse mortgages and does not capture every fee, product feature, or individual circumstance.
Estimates only — not a prediction. Projected loan balances, home values and equity depend on assumptions about interest rates and property growth that may not hold. Actual outcomes will differ. Borrowing limits are determined by each lender's assessment of your age (and the age of others on title), your home's condition, type, location and appraised value, and your circumstances. Figures shown are not an offer of credit or a guarantee of how much you can borrow. All amounts are in Canadian dollars (CAD).
Fees and the no negative equity feature. Costs such as a home appraisal, fees for independent legal advice, and set-up or administration fees are excluded from the core projection and would increase the cost. Most Canadian reverse mortgages include a no negative equity guarantee, which generally means you or your estate will not owe more than the fair market value of the home at repayment, provided loan obligations are met. This is a product feature offered by lenders rather than a statutory guarantee, so confirm it is stated in any contract.
Tax and benefit treatment. Per the Government of Canada, reverse mortgage funds are borrowed money, not income — they are tax-free and do not affect Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits. This general information is not tax advice; questions about interest deductibility, estate or capital matters should be directed to a qualified tax professional or the Canada Revenue Agency.
No warranty of accuracy. While Money Snap takes reasonable care to source figures from official authorities (the Financial Consumer Agency of Canada, the Bank of Canada, and the Canada Revenue Agency), this calculator is provided "as is" without any express or implied warranty as to accuracy, completeness, timeliness, or fitness for any particular purpose. Rates, thresholds, and rules change — figures shown may be out of date, and circumstances not captured by the inputs may materially affect actual outcomes.
Not financial advice. Information provided is general in nature only and does not take into account your personal objectives, financial situation, or needs. Results do not constitute financial, legal, tax, or credit advice, and use of this calculator does not create an advisory relationship. Reverse mortgages are complex and have long-term effects on home equity and any estate. Before acting on any figure shown, obtain independent advice from a qualified professional — many lenders require independent legal advice before a contract is signed — or refer to the FCAC directly.
Limitation of liability. To the maximum extent permitted by law, Money Snap accepts no liability for any loss, damage, cost, or expense — direct or indirect — arising from reliance on this calculator or the information it produces. Users are responsible for verifying all figures with the relevant authority before relying on them. Use of this calculator is subject to our Terms of Use.
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