KNOWLEDGE VAULT

How Much Can You Borrow with a Reverse Mortgage in Canada? A Deep Dive Into Equity, Age & Value

How Much Can You Borrow with a Reverse Mortgage in Canada A Deep Dive Into Equity Age and Value.png

For Canadian homeowners aged 55 and above, a reverse mortgage can unlock a new chapter of financial freedom—without the stress of selling or moving. But one of the most common questions we hear is: “How much can I actually borrow with a reverse mortgage?”

At Legacy Unlocked, we believe the answer shouldn’t be a mystery. In this article, we’ll break down how your age, home equity, and a few other factors determine how much tax-free cash you can access.

What is Home Equity (And Why Does It Matter)?

Your home equity is the difference between your home’s current market value and the amount you still owe on any existing mortgage.

For example:

  • Market value of your home: $700,000

  • Remaining mortgage balance: $100,000

  • Your home equity: $600,000

This equity is what you’ll be borrowing against with a reverse mortgage. The more equity you have, the more borrowing power you’ll typically have.

4 Key Factors That Determine Your Borrowing Limit

Reverse mortgages in Canada typically allow you to borrow between 20% and 55% of your home’s appraised value. Here’s what impacts that range:

  1. Your Age
    The older you are, the more you’re eligible to borrow. Why? Because reverse mortgages are designed to last as long as you live in your home. A 75-year-old will generally qualify for more than a 60-year-old because the expected loan term is shorter.

  2. Your Home’s Appraised Value
    Naturally, a more valuable home allows for a higher borrowing limit. Appraisals are required during the process to determine the accurate current market value.

  3. Your Property Type & Location
    Urban and suburban homes tend to have more favorable lending options. Condo units, vacation properties, and rural homes may be assessed differently depending on the lender.

  4. Interest Rates
    Although reverse mortgages don’t require monthly payments, the interest rate still affects how much you can borrow upfront. Lower interest rates may allow you to access a higher percentage of your home’s value.

So… How Much Could You Borrow?

Here are some general examples for illustration:

  • A 62-year-old homeowner with a $600,000 home might qualify for $180,000 to $240,000.

  • A 72-year-old homeowner with a $700,000 home could qualify for $280,000 to $350,000.

  • A couple both aged 60 with a $900,000 fully paid-off home might qualify for approximately $250,000 to $300,000.

Each situation is unique, and that’s why tools like a reverse mortgage calculator or a quick call with an advisor can provide a more accurate estimate based on your actual circumstances.

Do You Need to Borrow the Full Amount?

Not at all. One of the best features of reverse mortgages is flexibility. You can choose to receive:

  • A lump sum

  • Regular monthly deposits (great for income supplementation)

  • A line of credit (withdraw only when you need to)

  • Or a combination of the above

This customization means you can use your home equity strategically over time.

How to Use a Reverse Mortgage Calculator (and What It Tells You)

A reverse mortgage calculator is a free online tool that estimates how much you may qualify for. You’ll usually enter:

  • Your age

  • Your property location

  • Your estimated home value

  • Whether you still have a mortgage

It gives you a range—not a final number—but it’s a great first step.

Is It Safe?

Yes. Reverse mortgages in Canada are highly regulated. Providers like HomeEquity Bank (which offers the CHIP Reverse Mortgage) are federally regulated and follow strict guidelines. You’ll also need to get independent legal advice before finalizing your application to ensure full transparency.

Final Thoughts

If you’re 55 or older and own your home, a reverse mortgage could unlock significant tax-free cash—giving you financial flexibility while staying in the home you love.

At Legacy Unlocked, we help Canadians explore their reverse mortgage options with clarity, care, and confidence. Whether you want to supplement your retirement income, help your children buy their first home, or simply create a buffer for rising living costs, we’re here to help.

Want to find out how much you could access? Book a no-pressure consultation today.

References:

  1. HomeEquity Bank. (2023). CHIP Reverse Mortgage Overview. https://www.chip.ca

  2. Financial Consumer Agency of Canada. (2022). Reverse Mortgages.https://www.canada.ca