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What is Reverse Mortgage?

Canadian homeowners age 55 years or older, who have equity in their house have two options to take money out. They could either Refinance or get a Reverse Mortgage.

Unlike refinancing; a reverse mortgage is a home equity loan available exclusively to Canadian homeowners 55 years or older. Additionally, to help ensure that the loan balance will not exceed the fair market value of the property- the initial loan value cannot exceed 55% of the value of the home (subject to certain conditions).

Borrowers must seek independent legal advice before being approved for a reverse mortgage.

There are some fees associated with the setting up of a reverse mortgage. These fees include legal fees (paid to a lawyer), an appraisal fee (paid to an appraiser) and standard closing costs (depending on the term). In most cases the only out of pocket fee is that of the appraisal ($175-$400). All other fees and costs are financed as part of the reverse mortgage.

Homeowners are not required to make any payments during the life of the loan. Although, if they wish to make interest or principal payments without paying a penalty that is possible.

The homeowner has to keep the property in good maintenance, pay their property taxes and property insurance and condo fees (if applicable.)

To maintain full ownership of their home and will never owe more than the fair market value at the time you move or it’s sold.

There are three ways to receive payments through a reverse mortgage which are not taxable:

  • Receive a lump sum

  • Monthly payments

  • Combination of both


  • Option not to make monthly payments on the loan, until you sell the property

  • Ability to ‘withdraw’ cash without selling your home

  • It is TAX-FREE, the money does not reduce your eligibility for Old-Age Security (OAS) or

  • Guaranteed Income Supplement (GIS) benefits


Request a Meeting or Call a Sunlite Mortgage agent today at 1-877-385-6267 and we will be happy to help you find a great mortgage!

Mortgage Qualifier Calculator

The first steps in buying a house are ensuring you can afford to pay at least 5% of the purchase price of the home as a down payment and determining your budget. This calculator steps you through the process of finding out how much you can borrow. Fill in the entry fields and click on the payment schedule button to see a complete amortization schedule of your mortgage payments.

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