Frequently Asked Questions about Reverse Mortgages in Canada
Reverse mortgages came to Canada in 1986, but they have been around in the USA since 1961, when a loan officer in Maine realized a way to help a widow stay in her home after the loss of her husband's income.
In the USA, reverse mortgages have changed a lot since the 1960s.
But in Canada, reverse mortgages are still very conservative, and designed to protect both the homeowner and the equity in the home.
Only Canada's most highly-regulated banks provide reverse mortgages. These banks are commonly known as "Schedule 1 Banks," the same bank category as RBC, Bank of Montreal, CIBC, TD, Scotiabank, and National Bank of Canada.
A reverse mortgage in Canada is one of the safest mortgage types available.
Proceeds are tax-free with no impact on working or pension income. A reverse mortgage in Canada has a maximum loan amount of 55% of the value of the property. This is a conservative approach that ensures borrowers will have equity remaining in their property when they pay off the reverse mortgage.
Read on to learn how reverse mortgages can help you live a better life.