Reverse Mortgage in Canada Explained Simply

✍️ By Debbie Balfour | WBN News | July 24, 2025 | Click HERE for your FREE Subscription to WBN News and/or to be a Contributor.

Imagine being able to access the money tied up in your home, without selling it, moving out, or taking on new monthly bills. That’s exactly what a reverse mortgage lets you do.

For homeowners aged 55 and older, a reverse mortgage is a powerful financial tool. It allows you to tap into your home’s equity and receive cash, either as a lump sum, monthly payments, or a line of credit, without needing to make traditional mortgage payments. The loan only comes due when you sell the home, move out permanently, or pass away.

How Does It Work?
Let’s say your home is worth $800,000, and you own it outright. A reverse mortgage might allow you to access up to 55% of that value, around $440,000—tax-free. You stay in your home and maintain ownership, but now you have liquid capital at your fingertips.

Still unsure? Check out this popular video guide on reverse mortgages for Canadians. It breaks everything down in simple terms and is one of the highest-viewed resources on the topic. Perfect if you prefer to see how it works.

Why Consider It?
Many Canadians are house-rich but cash-poor. Retirement income might be tight, but their home’s value has skyrocketed. A reverse mortgage unlocks that equity, giving you options.

And here’s where things get interesting: you can use that cash to invest in more real estate.

Using Reverse Mortgage Funds to Invest
You can take the funds from your reverse mortgage and use them to purchase an investment property, contribute to a joint venture, or even lend as a private mortgage. This means you’re using one asset, your home, to build another income-generating asset. Done right, your investment returns could exceed the interest cost of the reverse mortgage itself.

Here’s an example:
You pull $300,000 from your home and use it as a down payment on a $1M rental property. The tenant pays down the mortgage while you collect monthly income. Meanwhile, the property's value grows over time.

Benefits Include:

No monthly payments required
Tax-free cash
Use home equity to diversify your investments
Stay in your home as long as you want

But Be Cautious:
Reverse mortgages come with fees and compounding interest. They’re best suited for those with a strong plan. Consulting a mortgage professional and financial advisor is key before diving in.

Final Thoughts
A reverse mortgage can be more than just a lifeline—it can be a launchpad. If you’re 55+ and want your home to start working for you, consider unlocking that equity to grow a real estate portfolio that pays you back for years to come.

Debbie Balfour | Real Estate Investing Success Coach + Podcast Host
📍 Website: www.DebbieBalfour.com
📧 Email: Debbie@DebbieBalfour.com
🔗 LinkedIn: Debbie Balfour
▶️ YouTube Channel: youtube.com/@DebbieBalfour

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