What a reverse mortgage actually is
A reverse mortgage lets a Canadian homeowner aged 55 or older borrow up to 55% of their home's value as a tax-free lump sum or as scheduled advances, with no required monthly payments. Interest accrues against the home; the loan is repaid when the homeowner sells, moves out, or passes away.
The two main products in Canada are CHIP (HomeEquity Bank) and Equitable Bank's PATH. Both are federally regulated, both let you keep title to your home, and both guarantee you'll never owe more than the home's fair market value at the time of sale.
Why it comes up so often in BC & Alberta
BC and Alberta together carry some of the highest concentrations of equity-rich, income-light retirees in Canada. On the BC side — West Vancouver, North Vancouver, Lions Bay, Kerrisdale, Oak Bay, and much of Kelowna — a home held for 30 years may be worth $2,000,000–$5,000,000 with no mortgage, while the owners are living on CPP, OAS, and a modest pension. In Alberta — Calgary's inner-city communities (Mount Royal, Britannia, Elbow Park) and Edmonton's mature neighbourhoods (Glenora, Windsor Park) — the same pattern plays out at $1,000,000–$3,000,000 valuations.
Traditional refinances are difficult on that income shape — banks stress-test against pension income at conservative qualifying rates and frequently can't approve a meaningful amount. A reverse mortgage qualifies based on age, home value, and location, not income — which is exactly why it exists.
BC vs Alberta — what actually differs
The reverse mortgage product itself is federal — CHIP and PATH work identically in both provinces. What changes are the closing costs and the surrounding math:
- →Property Transfer Tax — BC charges PTT on a purchase (1% on first $200,000, 2% up to $2M, 3% above, plus 2% additional on the portion over $3M). Alberta has no PTT, which materially changes a 'sell-and-buy-smaller with a reverse mortgage' plan.
- →Legal fees — comparable in both provinces ($1,500–$2,500 range), but AB uses a Dower Act consent for married homeowners that BC does not require.
- →Home values — a $2,000,000 North Shore home and a $1,200,000 inner-city Calgary home often generate similar approved amounts once you factor the CHIP/PATH location tier and age formula.
- →Independent Legal Advice — required in both provinces for CHIP and PATH; expect a separate $400–$800 lawyer fee on top of the closing legal.
When it's the right call
We see reverse mortgages do the most good in these situations:
- →Funding in-home care so the homeowner can stay in their own home instead of moving to a facility
- →Eliminating a stress-tested HELOC or maturing mortgage the bank won't renew on retiree income
- →Bridging a primary residence change — selling the family home, buying a smaller property (a townhouse in North Van, a villa in Kelowna, a bungalow in Calgary) with the reverse mortgage covering the gap
- →Gifting a living inheritance to children for their own down-payments — common with West Van, Edgemont, Mount Royal, and Glenora parents
- →Deferring CPP/OAS drawdown or an RRIF conversion by using tax-free equity in the interim (coordinated with the homeowner's financial planner)
When it's the wrong call
Reverse mortgages carry higher interest rates than standard mortgages because there are no monthly payments — interest compounds. Over 10–15 years, the balance can grow significantly. They're not a fit when:
The homeowner has strong income and could comfortably qualify for a standard mortgage or HELOC, the homeowner plans to move within 2–3 years (closing costs and accrued interest hit harder on short holds), or family members are pressuring the homeowner into accessing equity for reasons that don't benefit the homeowner.
The real 2026 cost — what interest actually does to the balance
Reverse mortgage rates in 2026 typically sit 1.5–2.5 percentage points above a standard 5-year fixed. On a $300,000 lump-sum advance at a representative rate, here is roughly what the balance looks like over time with no payments made:
- →Year 5 — balance grows to roughly $400,000–$425,000
- →Year 10 — balance grows to roughly $535,000–$600,000
- →Year 15 — balance grows to roughly $715,000–$850,000
How we structure these files
We always run the full alternative analysis first — HELOC, refinance, downsizing, sale-leaseback, Manulife One — before recommending a reverse mortgage. When it is the right tool, we model the 5-, 10-, and 15-year balance projections in plain dollars and walk through them with the homeowner and (with their permission) their adult children.
We also coordinate with the homeowner's lawyer or notary, and where applicable their financial planner, so the recommendation is documented and the family understands exactly what's happening to the estate value over time.
FAQ
Will the bank take my home?+
No. You keep title in both BC and Alberta. As long as you keep up property tax and home insurance and the home remains your primary residence, the loan sits on title until you sell, move out, or pass away.
Can I lose more than my home is worth?+
No. Both CHIP and PATH carry a no-negative-equity guarantee — you or your estate will never owe more than the home's fair market value at the time of sale, even if the balance has grown above it.
How much can a 70-year-old borrow?+
Roughly 35–55% of the home's appraised value, scaling with age and location. Metro Vancouver, Victoria, Kelowna, Calgary, and Edmonton postal codes typically qualify at the higher end of the range; smaller BC and AB towns tier lower.
Are reverse mortgages available in Alberta?+
Yes. Both CHIP (HomeEquity Bank) and PATH (Equitable Bank) lend in Alberta — Calgary, Edmonton, Red Deer, Lethbridge, Airdrie, and surrounding areas. Alberta has no Property Transfer Tax, which lowers the total cost of a downsize-and-reverse-mortgage strategy compared to BC.
Do both spouses need to be 55+?+
Yes. Both spouses on title must be at least 55. The approved amount is based on the age of the younger spouse, so a 62/58 couple qualifies against the 58-year-old's tier.