Great Question!
A Reverse Mortgage works similar to a typical Canadian mortgage in many ways, however, it also has some key differences. A Canadian Reverse Mortgage is designed specifically to meet the needs of Canadians 60 years of age and older and your unique circumstances.
A Reverse Mortgage is registered on the title of your home, just like a regular mortgage. Some differences include:
One of the concerns that people sometimes have about Reverse Mortgages is whether or not the interest owing will eventually overcome the equity established in the home. There are two major reasons why that scenario is unlikely:
Year |
Home Value |
Loan Amount |
1 |
$300,000.00 |
$120,000.00 |
2 |
$315,000.00 |
$128,400.00 |
3 |
$330,750.00 |
$137,388.00 |
4 |
$347,287.50 |
$147,005.16 |
5 |
$364,651.88 |
$157,295.52 |
6 |
$382,884.47 |
$168,306.21 |
7 |
$402,028.69 |
$180,087.64 |
8 |
$422,130.13 |
$192,693.78 |
9 |
$443,236.63 |
$206,182.34 |
10 |
$465,398.46 |
$220,615.11 |
*Based on average home appreciation of 5% annually and an interest rate of 7% on the Reverse Mortgage Loan Amount, both compounded annually.
If you’re interested in obtaining a Reverse Mortgage, please contact us and we would be happy to assist!