Trying to decide whether a reverse mortgage in Canada or home equity line of credit is the best way to fund your retirement lifestyle.

We have provided an overview of the key differences to help you make the right decision about your retirement income.

Reverse Mortgage in Canada

Vs Home Equity Lines of Credit


You can choose not to make any payments on the amount you receive until you decide to move or sell the house.

Payments on the principal amount and interest begin immediately.

Possible gains:

Makes more sense for long-term requirements. While the interest compounds, the value of your home is also appreciating. When you sell, chances are, you can pay off the entire loan and yet have some funds left over.

Makes more sense for short-term needs and if you have the income to pay the loan back quickly. With most retirees living on a fixed budget, handling these extra monthly payments can be tough.

Loan amount:

You can borrow up to 55% of the value of your home. This is a more conservative approach that protects the equity in your home and helps ensure there is still some value for you when the property is sold.

Provides you with access to cash for only as long as you can make payments. You could be forced to sell your home if income decreases and you are unable to make loan payments.


You can never be forced to move or sell ever. All you have to do is ensure the home is in good condition, and pay your property taxes and property insurance.

If you qualify, you can get a Home Equity Line of Credit for 65% of your property’s value. The loans are awarded on your ability to pay them back. Retirees with a fixed income may not qualify.


With CHIP the provider of reverse mortgages in Canada, you have the option of taking the entire amount in a lump sum, planned advances that provide you with regular income or a little now and more as needed (like for investment purposes).

Better suited for a lump sum withdrawal as the payments are set, so you can budget accordingly. But since the rate is typically a variable rate attached to prime, the interest rate can increase and put pressure on the affordability to repay.

CHIP Reverse Mortgage in Canada: A Worry-Free Source of Retirement Income

Being more familiar with home equity lines for credit may cause many retirees to choose this option over a reverse mortgage in Canada. However, a change in income, which is inevitable during retirement, can reduce payment capabilities and cause considerable stress, maybe even force a home sale.

On the other hand, a reverse mortgage which is specifically designed for individuals aged 55+, can give you income for your golden years while you continue to live in and own your home. In fact, according to HomEquity Bank, the only provider of Reverse Mortgages in Canada, most of its clients still have more than 50% equity in their home when they sell.

At The Mortgage Centre, our CHIP specialist, Darlene Vilas can provide details about reverse mortgages for seniors as well as help determine your eligibility and the amount you will qualify for. We work for you, not the lender.

To find out more about a reverse mortgage in Canada, please call 1-866-597-5626 or contact us online.