A reverse mortgage in Canada is available to homeowners from age fifty-five. You borrow a portion of your home's value as a lump sum, as scheduled advances or a combination. You make no monthly payments. You continue to own the home and live in it.

Interest accrues on the balance rather than being paid down, so the amount owing grows over time. The loan becomes repayable when the home is sold, when you move out permanently, or on death, at which point the estate repays it from the sale.

How much you can borrow depends on your age, the property, its location and the lender. Older applicants can generally access a larger share of the value. The specifics, the rates and the qualifying rules change, so get current figures directly from lenders rather than relying on any general description.

No monthly payment does not mean no obligations. You are generally required to keep property taxes current, maintain adequate insurance, keep the home in good repair and continue to occupy it as your principal residence. Failing on these can put the loan into default. Read the conditions carefully, because they are the part people skim.

Because nothing is repaid along the way, interest accrues on interest. Over a long enough period the balance owing grows substantially, and it grows faster the longer the loan runs. Someone who takes a reverse mortgage at seventy and lives to ninety-five will owe a great deal more than someone who takes one at eighty-five.

Whether that matters depends on whether the home appreciates faster than the balance grows. In a strong market it may. In a flat market it will not, and the equity remaining shrinks year over year.

Ask any lender for a projection showing the balance owing at five, ten, fifteen and twenty years at current rates, and ask what it looks like if rates rise. If a lender is reluctant to produce that, take the reluctance as information.

Reverse mortgage rates in Canada generally sit above conventional mortgage rates, reflecting how the product works and the risk the lender takes. Compare current rates against a conventional mortgage and a home equity line of credit before assuming a reverse mortgage is the only or best borrowing route.

This is not a reason against it, but it needs to be said plainly. The balance is repaid from the home when it is eventually sold, and what remains goes to the estate. The larger the accrued balance, the less is left.

If leaving an inheritance is not a priority for you, this may not concern you at all, and there is nothing wrong with using your own money in your own lifetime. If it is a priority, or if adult children are assuming there will be something, have that conversation openly before proceeding rather than leaving it as a surprise.

There are typically appraisal, legal and administration costs to set one up. There may also be prepayment charges if you repay early, which matters if you might sell within a few years. Ask specifically what applies if you decide to sell in year two or year three, because a reverse mortgage taken shortly before a move can be an expensive mistake.

Selling converts the equity into cash you own. Nothing accrues against it, nothing compounds and there is no balance waiting to be repaid. Whatever is left after buying the next home is genuinely yours to use or to leave.

In Richmond Hill and Markham, where a long-held family home may be worth substantially more than the bungalow or condo replacing it, the amount released can be considerable. That difference is often larger than what a reverse mortgage would advance.

This is the part a reverse mortgage does not address at all. A smaller home means lower property taxes, lower utilities, lower insurance and less maintenance, every year, permanently. If the real problem is that the house costs too much to run rather than that you need a one-time sum, borrowing against it does not solve anything. It adds a debt on top of the same monthly burden.

If the stairs are becoming difficult, if the maintenance is too much or if the house is isolating, downsizing addresses those alongside the money. A reverse mortgage leaves you in the same house with the same limitations, now with a loan against it. Where the home itself is part of the problem, that is a meaningful distinction.

Selling and buying carries real transaction costs on both sides: commission plus HST, legal fees, land transfer tax on the purchase, preparation and moving. Our commission guide sets out the selling side honestly.

There is also a real possibility that the gap is smaller than expected. If suitable bungalows or accessible condos in your preferred area are expensive, and many are in Richmond Hill and Markham, the difference between what you sell for and what you buy for may be modest once costs come off. Run those numbers before assuming downsizing releases a large sum.

And the move itself is genuinely hard. Sorting decades of belongings, leaving a community and adjusting to somewhere new takes a toll that people in their eighties often underestimate. That cost is real even though it does not appear on any statement.

Does this home still work for you physically? If the stairs, the bathroom or the maintenance are already problems, borrowing against it does not fix any of that. This question alone often settles the matter.

Is the problem a one-time need or an ongoing shortfall? A reverse mortgage handles a lump sum reasonably well. It handles a permanent monthly gap poorly, because the balance simply grows while the underlying problem persists.

How long do you realistically expect to be in this home? A short horizon makes the compounding less costly and the transaction costs of moving harder to justify. A long horizon reverses both.

How much does staying actually matter to you? Be honest. If it matters enormously, that belongs in the decision and it is worth paying something for. If you are staying mostly out of inertia, that is worth naming too.

What would downsizing actually release, after costs? Most people have never had this number calculated. Get it before deciding, because the whole comparison turns on it.