Reverse Mortgage
A reverse mortgage is a mortgage product typically for homeowners aged 55 or older. It allows the homeowner(s) to borrow from the equity within the property tax-free.
These mortgages access up to 55% of the home's current value and it does not affect Old Age Security or Guaranteed Income Supplement benefits. The maximum amount which can be borrowed is reliant on:
Age of the borrower(s)
Condition, type and appraised value of the home
The lender
Example Scenario: Derrick and Miranda are retired homeowners of an owner-occupied detached house which they raised three children in. The oldest of the three children has recently been accepted into a University program for mathematics and requires additional funding for tuition, as OSAP is not enough to cover the cost.
After a discussion with their mortgage broker, the pair decide to submit an application for a reverse mortgage to utilize the equity within their property for their child's education.