How Reverse Mortgages Are Helping Families in Today’s Housing Market
Buying a home has never been more challenging. High prices, strict lending rules, and the uphill battle of saving for a down payment have left many young Canadians struggling to break into the market. For a lot of buyers, the deciding factor is whether their family can step in to help.
A recent survey from Mortgage Professionals Canada found that 70% of buyers who received financial support from family wouldn’t have been able to purchase otherwise. That shows just how important intergenerational support has become.
But what happens when most of a parent’s or grandparent’s wealth is tied up in their home? That’s where a reverse mortgage can come in.
What is a Reverse Mortgage?
A reverse mortgage allows Canadian homeowners aged 55+ to access a portion of their home equity without selling or making monthly payments. The funds can be taken as a lump sum or spread out over time, and repayment (including interest) doesn’t happen until the home is sold.
For families, this has become a meaningful way to:
- Help adult children or grandchildren with a down payment
- Contribute to education or other major expenses
- Provide financial support while staying in the home they’ve built their lives around
Important Considerations
Because payments aren’t made during the life of the loan, interest compounds over time. This means there may be less equity left in the home in the future, which could affect inheritance plans. That’s why it’s important to look at how a reverse mortgage fits into overall financial and estate planning before moving forward.
Why Families Are Exploring This Option
Even with those considerations, reverse mortgages are gaining popularity. They allow homeowners to share the value of their home equity today—without waiting until a property is sold or taking on extra monthly debt. In a market where affordability challenges continue to grow, it’s a solution worth exploring.
Every family’s situation is unique. If you’d like to see how a reverse mortgage could fit into your plans, I’d be happy to walk through the numbers with you. Contact me today to review your options.