3 Misconceptions About Reverse Mortgages in Canada

Katherine Martin • August 24, 2017

One of the benefits of working with an independent mortgage professional is choice when it comes to mortgage product. When you work with a single bank or financial institution, you are limited to the products they offer. When you deal with a mortgage broker, you gain access to products from many lenders. Some of these products are very specialized and provide financing solutions as unique as the people they were developed for. 

One such product is a reverse mortgage. In Canada, HomEquity Bank offers the CHIP reverse mortgage to homeowners 55+. It’s certainly not for everyone, but while mortgage products are becoming increasingly difficult to qualify for in Canada, it’s certainly worth considering if you meet the criteria. The following article was written by Roland Mackintosh, a business development manager at HomEquity. 

If you have any questions about your financial situation, your current mortgage, or learning more about a CHIP reverse mortgage (for you or your parents), please don’t hesitate to contact me anytime!

Top 3 misconceptions about Reverse Mortgages:

I recently read an article by Jamie Hopkins in Forbes magazine, entitled “ Americans Don’t Even Know What Their Most Important Retirement Asset Is.” The article highlighted three common misconceptions about reverse mortgages and unsurprisingly, they are prevalent in Canada as well as in the U.S.

The top 3 misconceptions about Reverse Mortgages are as follows:

1. The bank owns your home.
2. Your estate can owe more than your home
3. The best time to take a Reverse Mortgage is at the end of your retirement

Let’s examine each misconception in more detail.

The bank owns your home.

Over 50% of Canadian homeowners over the age of 65, believe the bank owns your home once you’ve taken a reverse mortgage. Not true! We simply register our position on the title of the home, exactly the same as any other mortgage instrument, with the main difference in the flexibility of not having to make P&I payments on the reverse mortgage.

Your estate can owe more than your home.

A reverse mortgage, unlike most traditional mortgages in Canada, is a non-recourse debt. Non-recourse means if a borrower defaults on the loan, the issuer can seize the home asset, but cannot seek any further compensation from the borrower – even if the collateral asset does not fully cover the full value of the loan. Therefore, when the last homeowner dies (and the reverse mortgage is due), the estate will never be responsible for paying back more than the fair market value of the home. The estate is fully protected – this is not the case for almost any other mortgage loan in Canada, which is full recourse debt. So read the fine print the next time you offer to co-sign for a loan for mom!

The best time to take a Reverse Mortgage is at the end of your retirement.

This is a common mistake that reflects an “old-school” financial planning mentality. For the majority of Canadians (without a nice government pension), the old school financial planning mentality is about cash-flow, and is as follows:

a) Begin drawing down non-taxable assets to supplement your retirement income.
b) Once your non-taxable assets are depleted, begin drawing down more of your registered assets (RSP/RIF) to supplement retirement income.
c) Once your registered assets are depleted, sell your home, downsize and re-invest to generate enough cash-flow to last you until you die.

The problem with the “old-school” financial planning model is two-fold:

1. 91% of Canadian seniors have no plans to sell their home ( CBC News “Canadian Boomers Want To Stay In Their Homes As They Age ).

2. You are missing out on a huge tax-saving opportunity by not taking out a reverse mortgage in the beginning of your retirement.

“Research has consistently shown that strategic uses of reverse mortgages can be used to improve a retiree’s financial situation, and that reverse mortgages generally provide more strategic benefits when used early in retirement as opposed to being used as a last resort.” –  Jamie Hopkins, Forbes

In Canada, a reverse mortgage can be set-up to provide homeowners with a monthly draw out of the approved amount. For example: client is approved for $240,000 and decides to take $1,000/month. This is deposited into the clients’ bank account over the next 20-years. Interest accumulates only on the amount drawn (ie: not on the full dollar amount at the onset).

This strategy allows clients to draw down less income from their registered assets to support their retirement lifestyle. In turn, this can create some excellent tax savings, since home equity is non-taxable. Imagine lowering your nominal tax bracket by 5 – 10% each and every year over a 20 year period? The tax savings can be huge. You are also able to preserve your investable assets, which historically, can generate a higher rate of return when invested over a greater period of time.

Katherine Martin


Origin Mortgages

Phone: 1-604-454-0843
Email: kmartin@planmymortgage.ca
Fax: 1-604-454-0842


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By Katherine Martin • July 17, 2025
Summer in Canada is short—but sweet. With warm weather and long evenings, it’s the perfect time to get outside and enjoy your outdoor space, no matter how big (or small) it is. Whether you have a tiny patio or a sprawling backyard, a few creative upgrades can go a long way toward turning your space into your personal summer oasis. Below are ideas for every type of outdoor space, from cozy balconies to large backyards! For Patio-Only Spaces Limited to a balcony or concrete patio? No problem! Small spaces can still offer big enjoyment. 1. Upgrade the Flooring Add interlocking tiles to give your concrete floor a more polished look—wood grain, grass panels, or composite styles are all popular, easy-to-install options. 2. Create an Outdoor Movie Zone Hang a pull-down screen or grab a portable stand, pair it with a mini projector, and voilà—your very own outdoor movie theatre under the stars! 3. Start an Herb Garden Railing planters are perfect for growing basil, mint, parsley, and more. Fresh herbs at your fingertips—and they smell amazing too! 4. Add Some Twinkle Wrap fairy lights around your railing or overhead beams to bring cozy vibes and nighttime charm. 5. Grill Like a Pro Maximize your BBQ season with a compact baby-que. Weber’s Q Series is a great option for small spaces without compromising grilling power. For Small Yards A little yard can still pack a lot of personality. Here are ways to make the most of every square foot: 1. Game Time! Add a mini putting green or an axe-throwing target (just be safe!) for quick bursts of backyard fun that don’t take up much space. 2. Warm Up Your Nights Add a heating lamp or portable fire bowl to keep your evenings cozy well into the fall. 3. Grow Your Own Produce Build or buy a raised garden box to grow tomatoes, cucumbers, lettuce, or other easy vegetables. Gardening is relaxing—and delicious! 4. DIY Bird Bath Make a pedestal bird bath using an old vase, a platter, and strong glue. You likely have everything you need already at home—and the local birds will thank you! For Big Yards If space isn’t an issue, the sky’s the limit! Here are some larger-scale projects to take your yard to the next level: 1. Build a Catio Yep, it’s a “cat patio”! Give your feline friends a safe way to enjoy the outdoors with a screened-in enclosure attached to your home. 2. Create a Permanent Fire Pit Use stones and a fire ring to build a beautiful, safe fire pit. You can even add airflow cutouts to reduce smoke—perfect for those marshmallow roasts! 3. Tile a Dining Area Install paving stones or tiles to define an outdoor dining space. Add a table, some string lights, and enjoy al fresco meals all summer long. Need More Inspiration? If none of these projects quite fit your vision, check out Home Depot’s DIY backyard ideas—complete with step-by-step instructions and material lists to help you bring your outdoor dreams to life. Soak It Up While It Lasts No matter the size of your space, there’s always something you can do to enhance your outdoor experience. So get out there, get creative, and make the most of these sunny summer days. See you back here in August—with more tips, tricks, and homeowner insights!

How Do You Port a Mortgage?

By Katherine Martin • July 16, 2025
Porting your mortgage is when you transfer the remainder of your current mortgage term, outstanding principal balance, and interest rate to a new property if you’re selling your existing home and buying a new one. Now, despite what some big banks would lead you to believe, porting your mortgage is not an easy process. It’s not a magic process that guarantees you will qualify to purchase a new property using the mortgage you had on a previous property. In addition to re-qualifying for the mortgage you already have, the lender will also assess the property you’re looking to purchase. Many moving parts come into play. You’re more likely to have significant setbacks throughout the process than you are to execute a flawless port. Here are some of the reasons: You may not qualify for the mortgage Let’s say you’re moving to a new city to take a new job. If you’re relying on porting your mortgage to buy a new property, you’ll have to substantiate your new income. If you’re on probation or changed professions, there’s a chance the lender will decline your application. Porting a mortgage is a lot like qualifying for a new mortgage, just with more conditions. The property you are buying has to be approved So let’s say that your income isn’t an issue and that you qualify for the mortgage. The subject property you want to purchase has to be approved as well. Just because the lender accepted your last property as collateral for the mortgage doesn’t mean the lender will accept the new property. The lender will require an appraisal and scrutinize the condition of the property you’re looking to buy. Property values are rarely the same Chances are, if you’re selling a property and buying a new one, there’ll be some price difference. When looking to port a mortgage, if the new property’s value is higher than your previous property, requiring a higher mortgage amount, you’ll most likely have to take a blended rate on the new money, which could increase your payment. If the property value is considerably less, you might incur a penalty to reduce the total mortgage amount. You still need a downpayment Porting a mortgage isn’t just a simple case of swapping one property for another while keeping the same mortgage. You’re still required to come up with a downpayment on the new property. You’ll most likely have to pay a penalty Most lenders will charge the total discharge penalty when you sell your property and take it from the sale proceeds. The penalty is then refunded when you execute the port and purchase the new property. So if you are relying on the proceeds of sale to come up with your downpayment, you might have to make other arrangements. Timelines rarely work out When assessing the housing market, It’s usually a buyer’s market or a seller’s market, not both at the same time. So although you may be able to sell your property overnight, you might not be able to find a suitable property to buy. Alternatively, you may be able to find many suitable properties to purchase while your house sits on the market with no showings. And, chances are, when you end up selling your property and find a new property to buy, the closing dates rarely match up perfectly. Different lenders have different port periods Understanding that different lenders have different port periods is where the fine print in the mortgage documents comes into play. Did you know that depending on the lender, the time you have to port your mortgage can range from one day to six months? So if it’s one day, your lawyer will have to close both the sale of your property and the purchase of your new property on the same day, or the port won’t work. Or, with a more extended port period, you run the risk of selling your house with the intention of porting the mortgage, only to not be able to find a suitable property to buy. So while the idea of porting your mortgage can seem like a good idea, and it might even make sense if you have a low rate that you want to carry over to a property of similar value, it’s always a good idea to get professional mortgage advice and look at all your options. While porting your mortgage is a nice feature to have because it provides you with options, please understand that it is not a guarantee that you’ll be able to swap out properties and keep making the same payments. There’s a lot to know. If you’re looking to sell your existing property and buy a new one, please connect anytime. It would be a pleasure to walk you through the process and help you consider all your options, including a port if that makes the most sense!
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