Compare 4 Canadian reverse mortgage lenders, project equity erosion over 25 years, calculate provincial probate fees, and compare gifting equity tax-free vs leaving inheritance.
4 Canadian Lenders
Equitable, CHIP, Bloom + Custom
Provincial Probate Costs
All 10 provinces calculated
Tax-Free Equity Planning
Gift now vs inheritance analysis
Maximum Available Equity
$280,000
Max LTV: 35% at age 65
Probate Fee (Ontario)
$0
On remaining equity at year 10
What the Government Takes (at Year 10)
💍 Spousal Rollover Applies
Assets transfer at adjusted cost base — zero capital gains triggered. Reverse mortgage can continue.
⚠️ Deemed Disposition at Death
Non-principal residence properties trigger capital gains at FMV. Principal residence remains exempt.
*Estimates only. Actual rates and LTV limits may vary by lender and property.
Compare three strategies for your home equity over the next 25 years
Choose the exact dollar amount you want to gift now and project how it could grow if invested.
Gift a specific amount now and let it grow tax-free in the family
Use home equity now, leave the remaining equity later
Keep the house untouched and pass along the estate later
Rates as of June 2026. Subject to change. Contact lenders for current rates.
Reverse mortgage proceeds are a loan, not income. The CRA does not tax them — no impact on your OAS, GIS, or other benefits.
Your home remains your principal residence while you live in it. All appreciation is tax-free regardless of who inherits.
Spouse/common-law partner inherits at adjusted cost base — zero capital gains triggered on any property. The reverse mortgage can continue.
Non-spouse heirs trigger deemed disposition at FMV. Investment properties face capital gains at 66.67% inclusion above $250K threshold.
Reverse mortgage interest is generally not tax deductible for personal use, but it may be deductible when the borrowed funds are clearly used for income-producing investments.
As of 2024, capital gains above $250,000 are included at 66.67% (up from 50%). Below that threshold, the 50% inclusion rate still applies.
Province-specific distribution rules apply. Your estate may not go where you want — see the intestate table below.
The reverse mortgage is deducted from your estate before distribution. Your will controls who gets the remaining equity.
Joint tenancy with right of survivorship bypasses probate entirely. The property passes directly to the surviving owner.
Critical for managing your reverse mortgage if you become incapacitated. Without a POA, the court appoints someone — expensive and slow.
RRSPs, TFSAs, and insurance bypass probate with named beneficiaries. Consider this when planning around reverse mortgage equity.
Your selected province is highlighted. Fees calculated on remaining equity at year 10.
What happens to your equity if you die without a will
Select your province above to see the breakdown.
If you die without a will AND have no surviving relatives (spouse, children, parents, siblings, nieces/nephews, etc.), your entire estate — including all home equity — reverts to the provincial Crown under escheat laws. This is rare but underscores the importance of having a will.
Let our experts help you decide between gifting equity, a reverse mortgage, or keeping your home as-is.
Canadian reverse mortgages use semi-annual compounding, the same as traditional mortgages. The annual rate is converted to a semi-annual effective rate, then to a monthly rate using the formula: effectiveMonthly = (1 + annualRate/2)^(1/6) - 1. This means interest compounds on interest every month, causing the loan balance to grow exponentially over time.
No. Reverse mortgage proceeds are a loan, not income. The CRA does not tax them and they do not affect your Old Age Security (OAS), Guaranteed Income Supplement (GIS), or other income-tested benefits. This is one of the key advantages over withdrawing from RRSPs or other registered accounts.
When the last borrower dies, the estate has a limited time (typically 6-12 months) to repay the loan. Heirs can sell the home to repay, refinance with a traditional mortgage, or pay from other estate assets. All Canadian reverse mortgages include a negative equity guarantee — heirs never owe more than the home is worth.
If your spouse or common-law partner inherits your home, the spousal rollover rule applies — the property transfers at your adjusted cost base with zero capital gains triggered. The reverse mortgage can also continue in the surviving spouse's name. This is the most tax-efficient inheritance scenario in Canada.
Each province has different intestate succession rules. For example, in Ontario the spouse receives the first $350,000 plus 50% of the remainder, while children split the rest. In Quebec, the spouse receives one-third and children receive two-thirds. Without a will, probate is required and estate settlement typically takes 6-12 months longer.
Probate fees (called estate administration tax in Ontario) are provincial fees charged to validate a will. Rates vary significantly: Ontario charges 1.5% on estates above $50,000, BC charges 1.4% above $50,000, while Alberta caps fees at $525 and Quebec charges nothing for notarial wills. These fees apply to the total estate value passing through probate.
Yes. Heirs can keep the home by repaying the reverse mortgage from other funds or by refinancing with a traditional mortgage. They are not required to sell. However, they must repay the full loan balance plus accrued interest within the lender's specified timeframe, typically 6-12 months.
The spousal rollover is a Canadian tax provision allowing assets to transfer to a spouse or common-law partner at the original adjusted cost base rather than fair market value. This defers all capital gains taxes until the surviving spouse eventually disposes of the property. It applies automatically unless the executor elects otherwise.
The three main Canadian reverse mortgage lenders are Equitable Bank (lowest rates around 6.54%), CHIP by HomeEquity Bank (largest provider with widest property eligibility at 6.64%), and Bloom (SafeRate guarantee at 6.99%). The best choice depends on your location, property type, and whether you prioritize rate vs. features.
Gifting equity now through a reverse mortgage can be advantageous: the gift is tax-free, avoids probate fees, gives you control over who receives what, and allows heirs to invest the funds immediately. However, it reduces your own financial safety net. The optimal strategy depends on your financial security, health, and family situation.
Escheat occurs when someone dies without a will and without any surviving relatives — spouse, children, parents, siblings, nieces, nephews, or any blood relatives. In this rare situation, the entire estate reverts to the provincial Crown. This underscores the importance of having a will, regardless of estate size.
Yes, having a Power of Attorney (POA) is critical. If you become mentally incapacitated without a POA, the court must appoint a guardian to manage your affairs — an expensive process costing $5,000-$15,000+. A POA ensures someone you trust can manage your reverse mortgage, make payments decisions, and handle your estate planning.
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