Is a Reverse Mortgage Right for You? 7 Questions to Ask Before You Decide
A reverse mortgage can unlock the value of your home — without having to sell it, move, or make monthly payments. But just because it’s available doesn’t mean it’s right for everyone.
At Legacy Unlocked, we believe in informed decisions. Before moving forward, ask yourself these seven important questions to help you determine whether a reverse mortgage aligns with your goals, lifestyle, and financial needs.
1.Do I Want to Stay in My Home Long-Term?
Reverse mortgages are designed for homeowners who plan to age in place. If you love your home and don’t want to move, a reverse mortgage can help you access funds to stay comfortable and financially independent.
But if you’re planning to downsize or relocate within the next few years, it might make more sense to explore other options, like selling or a short-term loan.
2. Am I Comfortable Reducing the Equity in My Home?
A reverse mortgage allows you to access a portion of your home’s equity now — but that means there may be less left in the future for your estate or heirs. The loan is repaid from the proceeds when your home is sold or refinanced.
Ask yourself: Are my current needs more important than preserving the full value of my home later on? For many, the answer is yes.
3. Do I Have Enough Equity in My Home?
Most Canadian lenders allow you to borrow between 20% and 55% of your home’s appraised value, depending on your age and the value of your home.
If your home is worth significantly more than what you owe on it — or if it’s already mortgage-free — a reverse mortgage could be an excellent way to unlock funds without disrupting your lifestyle.
4. Am I Okay with Not Making Monthly Payments?
Reverse mortgages don’t require monthly payments — which is one of the key benefits. But it also means interest accrues over time and adds to your balance.
That said, many homeowners appreciate the cash flow relief and peace of mind this flexibility provides. You can also make voluntary payments at any time if you choose.
5. Will a Reverse Mortgage Affect My Government Benefits?
No. The funds you receive from a reverse mortgage are tax-free and do not count as income — which means they won’t impact your Old Age Security (OAS), Guaranteed Income Supplement (GIS), or other income-tested benefits.
This makes it an excellent way to supplement your income while keeping your other retirement benefits intact.
6. Do I Want to Avoid Selling Investments?
Some retirees use a reverse mortgage as a way to delay drawing from RRSPs, RRIFs, or other investments — especially during market downturns or when trying to minimize taxes. This can be a smart strategy to preserve your long-term portfolio and avoid early withdrawal penalties.
If you’re worried about outliving your savings or withdrawing too much too early, a reverse mortgage could serve as a financial buffer.
7. Am I Looking for Greater Peace of Mind?
At the end of the day, a reverse mortgage is more than just a financial tool — it’s about quality of life. Many Canadians choose one not because they’re in financial trouble, but because they want to enjoy retirement on their terms.
Whether you want to cover medical bills, travel, help your family, or simply stop worrying about monthly expenses, a reverse mortgage can provide financial peace of mind without sacrificing your independence.
Final Thoughts
A reverse mortgage isn’t one-size-fits-all — but it can be a smart, flexible option for homeowners 55 and over who want to make the most of their retirement years.
By asking these seven questions, you’ll have a clearer idea of whether it’s the right fit for your situation. Want to explore your eligibility or run the numbers? Speak with a Legacy Unlocked advisor today.
