Reverse Mortgage Rates in Canada: What’s Changed in 2025?

Reverse mortgage products have evolved significantly in 2025, giving Canadian homeowners aged 55 and older more flexibility and competitive options.

Interest rates for reverse mortgages — offered mainly through HomeEquity Bank (CHIP) and Equitable Bank — are now averaging between 7.1%–8.5%, depending on property value, location, and borrower age.

The biggest shift in 2025 is that lenders are offering custom payout options — including monthly income, lump sum, or a hybrid of both — allowing retirees to align their payouts with pension or investment schedules.

How to Use Your Home Equity for Retirement Income (2025 Update)

As more Canadians retire with limited savings, home equity is becoming a key part of financial planning. In 2025, the top ways to turn your home’s value into income include:

1. Reverse Mortgage (CHIP or Equitable Bank): Provides tax-free cash without monthly payments.

2. Home Equity Line of Credit (HELOC): Offers flexible borrowing but requires monthly interest payments.

3. Downsizing or Renting: Sell or lease part of your property for ongoing income.

Using a reverse mortgage strategically can help supplement CPP, OAS, and RRSP withdrawals, giving retirees more control over their lifestyle expenses and travel plans.