Reverse Mortgages in Canada: A Family-Focused Way to Unlock Home Equity

For many young Canadians, buying a home feels out of reach. With high prices, stricter borrowing rules, and the uphill task of saving for a down payment, the dream of homeownership often hinges on whether family can step in to help.

A recent survey revealed that 70% of buyers who received family assistance said they wouldn’t have been able to purchase otherwise. That statistic speaks volumes about how important intergenerational support has become in today’s housing market.

But not every parent or grandparent has liquid cash available. For many, the majority of their wealth is tied up in a home they’ve spent decades paying off. That’s where a reverse mortgage can make a difference.

How a Reverse Mortgage Works

A reverse mortgage is designed for homeowners aged 55 and older. It allows you to unlock a portion of your home’s equity without having to sell or take on monthly payments. The funds can be received as:

• A lump sum – ideal for helping with a down payment.

• Ongoing instalments – useful for covering education or living expenses.

• A combination of both – offering flexibility to meet changing needs.

Repayment, including interest, only happens once the home is sold. In the meantime, homeowners continue to live in the property they’ve built their lives around.

This makes it possible for families to share the benefits of home equity now, while ensuring stability for the present generation.

Why Families Are Turning to Reverse Mortgages

For many households, reverse mortgages are being used to:

• Support a loved one’s home purchase by contributing to their down payment.

• Cover education costs or living expenses at pivotal life stages.

• Provide financial support sooner, rather than waiting until an estate is eventually settled.

Parents and grandparents often find satisfaction in seeing their support make a difference today—whether that’s helping an adult child into their first home or easing the financial pressures faced by grandchildren.

What to Keep in Mind

While reverse mortgages create new opportunities, they also come with considerations. Because no monthly payments are made, interest compounds over time, which means less equity may be left in the home later on. This can impact inheritance planning and long-term financial flexibility.

Before making a decision, it’s important to ask:

• How much equity do we want preserved for future needs or estate distribution?

• How does this loan fit within overall retirement and financial goals?

• Are there alternative funding sources that should be considered first?

  
  

Approaching a reverse mortgage as part of a broader financial and estate strategy ensures that the choice supports both short-term goals and long-term plans.

Why They’re Growing in Popularity

Despite these considerations, reverse mortgages are becoming more common in Canada. They allow families to:

• Access home equity without selling the property.

• Offer meaningful support without taking on new repayment obligations.

• Bridge the affordability gap facing younger generations.

In a housing market where affordability challenges continue to mount, reverse mortgages provide a practical way for families to share wealth across generations while maintaining financial stability.

The Bottom Line

Reverse mortgages aren’t the right fit for everyone, but for many Canadians, they’ve become an important option in balancing family support, financial planning, and long-term security.

If you’re considering how to help your children or grandchildren move forward, now may be the time to explore whether a reverse mortgage makes sense. With careful planning, your home’s equity can be more than a future inheritance—it can be a tool that helps your loved ones thrive today.