Reverse Mortgage Rates Are Moving: What Canadians 55+ Should Know

What changed for reverse mortgages in Canada

The newest development for Canadians considering a reverse mortgage is pricing. HomeEquity Bank reportedly raised its advertised five-year fixed CHIP reverse mortgage rate from 6.39% to 6.94%, effective August 31, 2026, while some other lenders held their rates. That has widened the gap between offers and made shopping around more important than it may have been when pricing was more uniform.

For homeowners 55 and older, the practical takeaway is not that reverse mortgages have changed structurally. It is that the cost of borrowing may now differ more meaningfully from one provider to another. Because interest is added to the balance instead of paid monthly, even a higher rate that looks modest on paper can affect how quickly the mortgage balance grows and how much equity remains later.

The basic rules have not changed

Federal consumer guidance still describes reverse mortgages as loans for homeowners who are generally 55 or older, live in the home as their primary residence, and want to borrow against home equity without selling. The funds are typically tax-free, and monthly mortgage payments are not required while the reverse mortgage is in place.

The amount available depends on the lender and the property. Federal guidance says Canadians can usually borrow up to 55% of the home’s current value. HomeEquity Bank’s current materials also describe CHIP as available to homeowners 55+ with access to up to 55% of home value. Equitable Bank says eligible borrowers may access up to 59% in major urban centres in Alberta, British Columbia, Ontario or Quebec, with a minimum home value of $250,000.

Why the rate spread matters

Reverse mortgages are often considered when a homeowner wants to stay in their home while covering living costs, paying off liabilities, or funding home repairs. Used carefully, they can create breathing room. But they are not free money: the loan balance grows over time, and that reduces the equity available for a future sale, estate, move, or other plans.

• A higher rate can make the balance grow faster over time.
• Different lenders may offer different maximum borrowing amounts and pricing.
• Alternatives such as downsizing, refinancing, or a home-equity line of credit may be worth comparing if regular payments are manageable.
• Clear expectations upfront can help avoid delays and make the closing process smoother.

A reverse mortgage is useful for some, but not a default solution

For buyers or move-up homeowners, it is important to understand that reverse mortgages are niche, age-gated retirement cash-flow tools. They are not a standard low-cost financing option and are generally tied to homeowners who already have meaningful equity in a primary residence.

If a reverse mortgage is being used to pay debts sooner, support monthly cash flow, or avoid selling the home, the process should start with a careful comparison of the long-term cost, the expected equity remaining, and realistic alternatives. A Finevo advisor can help you compare reverse mortgage options across available lenders, review whether another strategy may fit better, and map out a clear next step before you commit.