Canadian Reverse Mortgage Calculator
See how a reverse mortgage changes over time — projected loan balance, compounding interest, and remaining home equity in CAD.
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 |
|---|---|---|---|
| 55 | 20% | CAD 160,000 | — |
| 60 | 27% | CAD 216,000 | — |
| 65 | 34% | CAD 272,000 | — |
| 70 | 41% | CAD 328,000 | ◀ Your age band |
| 75 | 48% | CAD 384,000 | — |
| 80 | 55% | CAD 440,000 | — |
| 85 | 55% | CAD 440,000 | — |
| 90+ | 55% | CAD 440,000 | — |
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.
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 |
|---|---|---|---|---|
| 55 | 20% | CAD 100,000 | CAD 160,000 | CAD 240,000 |
| 60 | 27% | CAD 135,000 | CAD 216,000 | CAD 324,000 |
| 65 | 34% | CAD 170,000 | CAD 272,000 | CAD 408,000 |
| 70 | 41% | CAD 205,000 | CAD 328,000 | CAD 492,000 |
| 75 | 48% | CAD 240,000 | CAD 384,000 | CAD 576,000 |
| 80 | 55% | CAD 275,000 | CAD 440,000 | CAD 660,000 |
| 85 | 55% | CAD 275,000 | CAD 440,000 | CAD 660,000 |
| 90+ | 55% | CAD 275,000 | CAD 440,000 | CAD 660,000 |
Latest updates
Reverse Mortgage & Home Equity Updates
Recent changes that affect this calculator, each summarised from its announcement and linked to the source.
CMHC Prefab Plus Offers Insured Mortgages on Factory-Built Homes With 5% Down
Canada Mortgage and Housing Corporation (CMHC) announced CMHC Prefab Plus, which lets homebuyers purchase a factory-built home with a minimum down payment of 5% and CMHC-insured financing, with mortgage funds released in up to four stages (draws) as construction milestones are met rather than in one lump sum.
BMO Bank of Montreal Cuts Prime Lending Rate to 4.45% Effective 30 Oct 2025
BMO Bank of Montreal said it is decreasing its Canadian prime lending rate from 4.70% to 4.45%, effective 30 Oct 2025.
Company announcement — figures are from BMO Financial Group’s own release, not an official government source.
Bank of Canada Cuts Policy Rate by 25 Basis Points to 2.25%
The Bank of Canada (BoC) reduced its target for the overnight rate by 25 basis points to 2.25% on 29 Oct 2025, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Governing Council cited ongoing weakness in the economy and inflation expected to remain close to the 2% target.
See all 22 Mortgage & rates updates on Canadian Financial News & Updates
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.
A reverse mortgage is a type of loan for homeowners, usually aged 55 or older, that lets you borrow money against your home equity without selling your home. Financial institutions sometimes call this “equity release”. No regular payments are required while you live in the home — instead, 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.
FCAC — Reverse MortgagesPer the Government of Canada, a reverse mortgage is for homeowners usually aged 55 or older. Importantly, all individuals registered on the title of your home must also meet the age requirement. The older you (and other owners) are, the more equity you can typically access.
FCAC — Reverse MortgagesNo regular payments are required while you live in the home as your primary residence. Interest accrues and is added to the loan balance over time. Many products allow voluntary payments if you wish, which can reduce the amount of interest that compounds — features vary by lender.
FCAC — Reverse MortgagesThe balance — including accrued interest — is generally repaid when you sell the home, move out, or pass away (from your estate). Lenders can also define specific default triggers, such as failing to pay property taxes or insurance, or to maintain the home. The full balance, not just the amount borrowed, is repayable.
FCAC — Reverse MortgagesYes. You keep ownership of your home and can continue living in it — the lender does not take title. The home must usually be your primary residence, meaning you live in it for at least six months a year. You remain responsible for property taxes, insurance and maintenance.
FCAC — Reverse MortgagesPer the Government of Canada, you may usually borrow up to 55% of the current value of your home. The maximum depends on your age (and the age of others on title), your home’s condition, type, location and appraised value, and your lender. As a general guide, the older the youngest borrower, the higher the percentage available.
FCAC — Reverse MortgagesInterest is charged on the amount borrowed and compounds — it is added to the balance and then itself earns interest. Because no payments are made, the balance grows over time. Reverse mortgage rates are higher than for most other mortgages. In Canada, mortgage interest is commonly expressed on a semi-annual compounding basis; confirm the exact terms with your lender.
FCAC — Reverse MortgagesFCAC notes the costs of a reverse mortgage can include a home appraisal fee, fees for independent legal advice, and set-up or administration fees, in addition to interest. These vary by lender and product and add to the overall cost over time.
FCAC — Reverse MortgagesDepending on the lender, you may receive the funds as a lump sum, as regular advances (for example monthly or quarterly), or as a combination. A lump sum accrues the most interest because the full balance compounds from the start; drawing gradually builds the balance more slowly.
FCAC — Reverse MortgagesA home equity line of credit (HELOC) generally requires regular interest payments and assesses your income and credit, but usually has a lower rate. A reverse mortgage requires no regular payments and focuses on age and home value rather than income, but carries a higher rate and a balance that compounds. Each suits different circumstances.
FCAC — Reverse MortgagesNo. Reverse mortgage proceeds are borrowed money, not income, so they are tax-free. They are not included in your taxable income and do not appear on your tax return as income. Tax questions about interest deductibility or estate matters depend on personal circumstances and should be checked with a qualified tax professional.
FCAC / Government of CanadaNo. Per 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. This is a key distinction from income that is counted in benefit calculations.
FCAC / Government of CanadaWithdrawals from an RRSP or RRIF count as taxable income, which can increase your tax and potentially trigger an OAS clawback or reduce GIS. Reverse mortgage funds are tax-free and benefit-neutral because they are a loan. The trade-off is that a reverse mortgage is repaid later (with compounding interest) from your home, whereas registered withdrawals are your own savings.
Government of Canada — OASMost 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 your home when the loan is repaid — provided you meet your obligations, such as paying property taxes and insurance and maintaining the home. This is a product feature offered by lenders, so confirm it is stated in your contract.
FCAC — Reverse MortgagesBecause interest compounds and no payments are made, the loan balance grows over time and reduces the equity remaining in your home. This affects what is available to you later and the value of any estate. How much equity is preserved depends on the amount borrowed, the interest rate, how long the loan runs, and changes in your home’s value.
FCAC — Reverse MortgagesOther ways to access home equity or income in retirement include a home equity line of credit (HELOC), refinancing, downsizing (selling and moving to a smaller home), or drawing on savings and registered accounts. Each has different costs, eligibility and trade-offs around payments, interest and whether you keep the home.
FCAC — Reverse MortgagesReverse mortgages are complex and have long-term effects on your home equity. Many lenders require independent legal advice before the contract is signed, and obtaining independent financial advice can help you compare the option against alternatives for your circumstances. Comparing rates, terms and fees across lenders is also encouraged.
FCAC — Reverse MortgagesImportant 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.
Official data sources
Borrowing guide (up to 55%), minimum age and tax/benefit treatment from the Financial Consumer Agency of Canada (FCAC). Policy rate (2.25%) from the Bank of Canada. Per-age LVR percentages and balance projections are illustrative compounding estimates in CAD (Canadian semi-annual convention), not predictions or lender quotes.