Reverse Mortgages Mississauga

Around 1.5% of all mortgages taken out in Canada are reverse mortgages, but with only two lenders and many alternative ways to access cash, Canadians are understandably confused about this type of loan.

So here’s everything you need to know if you’re hoping to benefit from the equity in your home.

Quick Links

  1. What Is a Reverse Mortgage?
  2. Where Can I Get a Reverse Mortgage in Mississauga?
  3. Who Can Get a Reverse Mortgage in Mississauga?
  4. How Much Does a Reverse Mortgage Cost in Mississauga?
  5. How Do I Get a Reverse Mortgage in Mississauga?
  6. Alternatives to Reverse Mortgages in Mississauga
  7. Mississauga’s Property Market
  8. Frequently Asked Questions About Reverse Mortgages in Mississauga

Frequently Asked Questions About Reverse Mortgages in Mississauga

What Is a Reverse Mortgage?

A reverse mortgage is a form of loan that in effect ‘releases’ the equity you have built up in your home. As with normal mortgages, the loan is secured against the property in question, but as opposed to a normal loan term, a reverse mortgage lasts the duration of your life. And, importantly, there are no repayments, for principal or interest, at all during the loan’s life.

Where Can I Get a Reverse Mortgage in Mississauga?

At the moment, there are only three reverse mortgage providers across all of Canada:

1. Bloom Finance Company

  • Modern finance company with a mission to provide the simplest way for 55+ Canadians to unlock the wealth they’ve built
  • Operates in Ontario, including Mississauga
  • Easy online application and process
  • Find out how much you are eligible for here

2. HomeEquity Bank (CHIP)

  • Available throughout Canada
  • Most widely used reverse mortgage provider
  • Private corporation active since 1986
  • Requires the home in question to be valued at more than $150,000

3. Equitable Bank

  • One of Canada’s ten largest banks
  • Reverse mortgages only available in select major urban areas
  • Requires the home in question to be worth more than $250,000
  • Minimum borrowing amount of $25,000

Mississauga’s average property price is $962,697 (and even higher, $1.4 million, for detached homes), so the majority of reverse mortgage applicants in this area will meet the home value requirement for both providers very easily.

Who Can Get a Reverse Mortgage in Mississauga?

Eligibility for a reverse mortgage is simple:

  • You must be aged 55 or over (if another person is listed on the property title, they must also meet this age requirement) AND
  • You must own your own home in Mississauga, which is your primary residence

If you meet these basic requirements, you are technically eligible for a reverse mortgage.
However, as with other types of mortgage, financial factors will be taken into account to see whether your chosen lender wishes to lend to you.

How Much Does a Reverse Mortgage Cost in Mississauga?

The lack of reverse mortgage providers does mean that there is less competition than in the traditional mortgage market, and so interest rates are higher than you might expect. Rates can vary depending on your circumstances and your chosen mortgage term, but they start from around 3.5% (fixed rate). Variable rates are also available.

And, as with any mortgage, there are fees when taking out a reverse mortgage. These should be included in your financial calculations, and if necessary added to the loan amount. Typical fees include:

  • Legal fees
  • Appraisal fees
  • Administrative fees
  • Early prepayment fees

It’s recommended that you budget around $2,500 to cover these costs.

How Do I Get a Reverse Mortgage in Mississauga?

Getting a reverse mortgage is a fairly easy process:

  1. Check you are eligible for one (see above)
  2. Pay off any outstanding debts against the home (including HELOCs and other mortgages)
  3. Pick a lender, and apply for your reverse mortgage
  4. Complete all of the required paperwork (which includes documentation regarding the property you are mortgaging and your personal finances)

If you are approved, you can choose to take your mortgage funds either as a single lump sum, or split between a small upfront payment and subsequent monthly payments.

Alternatives to Reverse Mortgages in Mississauga

Not everyone is eligible for, or wants to get, a reverse mortgage, and fortunately there are some other options available to help homeowners benefit from the equity in their homes:

  • HELOCs
  • Cash out refinancing
  • Traditional home equity loans

For those who do wish to pursue a reverse mortgage, there are some ways to make this a more affordable option:

  1. Opt for monthly payments, as interest accrues on your loan as it is received
  2. Repay the loan in partial payments over time

Mississauga’s Property Market

Mississauga has a dynamic and increasingly expensive property market. Here are some facts about typical homeowners and properties in this urban area:

  • Mississauga’s average property price is $962,697
  • Mississauga has seen the cost of property rise 114% over the last 10 years – less than the rest of the GTA
  • The average age of new mortgage holders in Mississauga is 39, and the average new mortgage taken out is for $221,000
  • The number of homeowners in Mississauga has remained steady for the past decade, as compared to the rest of the GTA (and Canada), where home ownership rates have increased
  • 27.5% of Mississauga’s population is over the age of 55

Frequently Asked Questions About Reverse Mortgages in Mississauga

How much can I borrow with a reverse mortgage in Mississauga?

You can borrow up to 55% of your home’s value with a reverse mortgage. This averages $529,483 in Mississauga.

How much does a reverse mortgage in Mississauga cost?

Reverse mortgage interest rates start at about 3.5%, but do vary depending on the term of the loan and some other factors.

What kind of home can I get a reverse mortgage on in Mississauga?

Reverse mortgages can be taken out on any privately owned home, as long as it meets the lender’s criteria and is the borrower’s primary residence. If the property has multiple owners, then all of the owners must meet the lender’s requirements.

Who owns my home when I take out a reverse mortgage?

You still own your home when you take out a reverse mortgage; just as with a traditional mortgage, the loan does not impact your ownership. The loan is simply secured against the property.

Will a reverse mortgage affect my benefits?

No, reverse mortgages do not affect benefits, as income from a reverse mortgage is tax free.

If my spouse dies, what happens to our reverse mortgage?

If you own your home with your spouse, the reverse mortgage is maintained after they pass away. For the reverse mortgage to close, both spouses need to pass away or vacate the home.

How will a reverse mortgage affect my children’s inheritance?

This depends on how the reverse mortgage is closed. If you close it or repay it prior to your death, then it will have no more effect than repaying any type of loan. If the reverse mortgage is automatically closed after you pass away, then your estate repays the loan. This naturally reduces the sum of money left to your beneficiaries, but rest assured: if property prices fall, they will not be stuck paying the cost of your loan out of pocket.

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