Reverse Mortgages in Kelowna

For many Canadian homeowners, rising living costs, property taxes, insurance, or unexpected expenses can place real pressure on cash flow—especially in retirement. If most of your wealth is tied up in your home, a reverse mortgage may be one option to access that equity without selling your property.

A reverse mortgage allows eligible homeowners to borrow against their home’s value while continuing to live in it. However, this is a significant financial decision that should be approached carefully, with a full understanding of both the benefits and trade-offs.

A reverse mortgage is a loan secured against your home that allows you to access equity without making regular mortgage payments. Instead of paying the lender each month, the loan balance increases over time as interest is added.

Repayment is typically required only when the home is sold, the homeowner moves out permanently, or the estate is settled.

To qualify for a reverse mortgage in Canada, several criteria must be met:

• You must be 55 years of age or older
• If the home is jointly owned, all owners must meet the age requirement
• The property must be your primary residence
• Any existing mortgage or secured debt must be paid off, often using proceeds from the reverse mortgage

Eligibility and available loan amounts depend on factors such as age, property value, and location.

Reverse mortgage funds can be provided in different ways, depending on the lender and product structure:

• A lump-sum payment, or
• A combination of upfront funds and scheduled advances

Before accessing discretionary funds, any outstanding loans or registered debts must be cleared. Remaining funds may then be used for:

• Covering daily living expenses
• Paying off outstanding debts
• Medical or healthcare costs
• Home maintenance, repairs, or accessibility upgrades

In addition to age requirements, lenders assess:

• The amount of equity in the home
• Current market conditions
• Property location and condition
• Appraised value of the home

Generally, older borrowers with higher equity may qualify for larger loan amounts.

For the right borrower, a reverse mortgage can offer meaningful benefits:

• Continued ownership and occupancy of your home
• No required monthly mortgage payments
• Funds received are not taxable income
• No impact on Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits

These features can improve monthly cash flow and provide financial flexibility during retirement.

Reverse mortgages are often considered a solution of last resort due to their cost structure. Potential downsides include:

• Higher interest rates compared to traditional mortgages
• Accumulating interest over time, which reduces remaining home equity
• Fewer assets remaining for beneficiaries in the future

Because interest compounds over the life of the loan, total borrowing costs can be significant.

Reverse mortgages are no longer viewed as negatively as they once were, but they are still not suitable for everyone. For some homeowners, they provide essential cash flow relief. For others, they may form part of a broader retirement income or estate planning strategy.

The key is understanding whether the benefits outweigh the long-term costs in your specific situation.

A reverse mortgage is a major financial decision that deserves careful consideration and professional guidance. Exploring alternatives—such as downsizing, refinancing, or accessing equity through other means—may also be worth reviewing.

If you’re considering a reverse mortgage in Vancouver or elsewhere in BC, I can help you review your options, understand the long-term impact, and determine whether this solution aligns with your financial goals.

Let’s have a thoughtful conversation and explore what makes the most sense for you.