Reverse Mortgages in Alberta: A Guide for Seniors

What is a Reverse Mortgage?

A reverse mortgage allows Alberta homeowners 55+ to access home equity without monthly mortgage payments. The loan is repaid when you sell, move, or pass away.

How Reverse Mortgages Work

Basic Mechanics

• Borrow against your home equity
• Receive funds as lump sum or income stream
• No monthly payments required
• Interest accumulates on balance
• Repayment when home is sold

Qualification

• Age 55+ (both spouses if applicable)
• Primary residence in eligible condition
• Sufficient equity (typically 50%+)
• No income or credit qualification

Amount Available

Maximum borrowing depends on:

• Your age (older = more available)
• Home value
• Location
• Property type

Typically 10-50% of home value depending on factors.

Costs of Reverse Mortgages

Interest Rates

• Higher than traditional mortgages (often 1-2% more)
• Fixed or variable options
• Compounds over time

Fees

• Setup fees: $1,000-$2,000+
• Appraisal and legal costs
• Possible ongoing administration fees

Pros and Cons

Advantages

• Access equity without selling
• Stay in your home
• No monthly payments
• Tax-free funds (it's a loan)
• No income qualification needed

Disadvantages

• Higher interest rates
• Reduces inheritance for heirs
• Costs compound over time
• May affect government benefits
• Less equity if you need to move later

Alternatives to Consider

HELOC

If you can make payments, a HELOC offers lower rates and more flexibility.

Downsizing

Selling and buying smaller can release equity while reducing housing costs.

Traditional Refinancing

If you have income, conventional refinancing is less expensive.

Is a Reverse Mortgage Right for You?

Consider a reverse mortgage when:

• You want to stay in your home long-term
• You need income and can't qualify for alternatives
• Estate planning isn't primary concern
• Other options have been considered

Get independent legal and financial advice before proceeding.