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Canada's Best Reverse Mortgages

RATESDOTCA tracks the best Canadian reverse mortgage rates, as well as the latest rate changes, all in one place.

The following are the lowest rates from Canada's two national reverse mortgage lenders:

Rate Type

HomeEquity Bank (CHIP)

Last Change

CHIP Max

Last Change

Equitable Bank (Flex)

Last Change

Equitable (Lump Sum)

Last Change

6-month Fixed

4.29%

-30 bps

5.54%

-30 bps

4.29%

4.29%

1-year Fixed

3.49% 

-50 bps

5.49%

-25 bps

3.44%

-35

3.44%

-25 bps

2-year Fixed

N/A

N/A 

4.34%

+15

3.94%

+15 bps

3-year Fixed

4.65%

+16 bps

6.40% 

+16 bps

4.39%

+10

3.99% 

+10 bps

5-year Fixed

5.14%

+25 bps

6.49%

+20 bps

4.89%

+20

4.19% 

+20 bps

Variable
.

4.09% 

-50 bps

5.34%

-50 bps

4.09%

-20 bps

4.09% 

Last rate changes:

  • HomeEquity Bank – CHIP: April 6, 2021
  • HomeEquity Bank – CHIP Max: April 6, 2021
  • Equitable Bank: April 14, 2021

Have a reverse mortgage question?

RATESDOTCA has teamed with intelliMortgage to offer Canada's most comprehensive reverse mortgage advice.

Phone: 1-800-280-2460
Email: contact Doug Boswell

* Available via our partner, intelliMortgage (FSRA license# 12326).

Things to remember about reverse mortgage rates

Reverse mortgages always cost more than conventional mortgages because the lender’s funding costs are higher.

The reason for that is two-fold:

  1. You are not required to make payments. This means the lender must wait years to get its money back (7-12 years on average)
  2. The lender can never recover more money from you than your home is worth, so the risk on their part is higher (especially if you live longer than the average Canadian)

At the moment, there are only two mainstream reverse mortgage lenders in Canada. This duopoly doesn’t result in much competition, meaning rates are arguably higher than they otherwise might be.

Having said that, both Equitable Bank and HomeEquity Bank have become more aggressive in their reverse mortgage pricing since 2020. That was a year reverse mortgage rate sank to historic lows.

Despite reverse mortgage rates being materially higher versus standard mortgage rates, when cash is key and leaving your home is not an option, and you don’t qualify elsewhere, the rate on a reverse mortgage can seem like a bargain compared to the alternatives.

Reverse mortgages are often a "plan C" for those approaching retirement with little or no additional savings aside from their home equity.

2016 Census showed that 45% of Ontario homeowners were already at or near retirement at that time, and that 88% of this demographic has less than $200K in savings, according to HomeEquity Bank. "Most of their wealth is in real estate and two-thirds earn only CPP and OAS."

Here's three other things to keep in mind about reverse mortgage rates:

  1. Rates vary by location, financing type and other factors.
  2. HomeEquity Bank’s “CHIP Max” product allows for higher loan amounts in select cities. It entails a rate surcharge for that privilege.
  3. Equitable Bank has the lowest reverse mortgage rates on most terms. But its rates are somewhat higher if you choose to borrow over time instead of taking a lump-sum on closing. If you prefer the flexibility of withdrawals over time, it’s sometimes worth the extra price because you can borrow (and pay interest) as needed.

Reverse mortgage rate terms

The contract for all reverse mortgages is typically five years, even if you choose a short term like a 1-year fixed. If you do choose a shorter term, your rate resets to the current rates at the end of that period.

After five years, however, you can choose a new rate or pay off the reverse mortgage without penalty. Of course, all rates you see here are subject to change and are based on an approved application.

Comparing a reverse mortgage rate to other options

Seniors who need cash from their home have three main options: a mortgage, a reverse mortgage and a HELOC. Each of these alternatives has its pros and cons and qualification requirements. Here’s a quick comparison.

Compare reverse mortgages with HELOCs and mortgages

 

Reverse Mortgage

HELOC

Mortgage

Must make payments

No

Maybe

Yes

Must prove income

No

Yes

Yes

Minimum Age

55

None

None

Minimum Time to Close (Approx. days)

30

21

21

Maximum Loan-to-Value

15-55%

50-65%

50-80%

Minimum Advance at Closing

$20,000

$0

$100,000

Early Repayment Penalties

Yes

None

Yes

Appraisal Cost*

Free!*

Free!*

Free!*

Rate range

Highest

Moderate

Lowest

Closing Costs (Approx.)

$1795 to $3200

$895

$895

* Available via our partner, intelliMortgage (FSRA license# 12326). RATESDOTCA has teamed with intelliMortgage for the most comprehensive reverse mortgage advice in Canada. For more information, please contact Doug Boswell.

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