Reverse mortgages aren't only for refinancing
Most people think of a reverse mortgage as a way to unlock equity in the home you already own — to boost retirement income, renovate, help family, or clear debt. In those cases it works like a refinance: you stay put, borrow against what you own, and use the cash however you need.
But here's what surprises people: you can also use a reverse mortgage to buy a home. It's less common, but it's real, and for the right situation it opens doors.
Three ways to use a reverse mortgage as a purchase tool
Buying your first home. If you've rented for years and built solid retirement savings but never owned, a reverse mortgage can help you close the gap. Say you're looking at a home for $300,000 and you're a bit short — a reverse mortgage can cover the shortfall. You gain the security of ownership, no landlord surprises, and no monthly mortgage payment eating into your income. You only repay when you sell.
Downsizing. Your current place is too big, and you want something smaller in the same neighbourhood. You sell your mortgage-free house for $500,000 and buy a condo for $250,000. Instead of paying cash for the whole condo, you use a reverse mortgage to cover part of the cost. That frees up more proceeds from your sale — money you can invest or spend on what matters.
A second home or vacation property. A lakefront cabin or mountain chalet in retirement isn't out of reach. If your current mortgage-free home is worth $600,000, you can use a reverse mortgage to help buy that vacation spot. You enjoy it through retirement, benefit from any appreciation, and still only repay when you eventually sell.
Who qualifies?
You need to be a Canadian homeowner and at least 55. How much you can borrow depends on your age (and your spouse's, if applicable), where the home is, and what it's worth.
The maximum is 55% of your home's value. Generally, the older you are, the more you'll qualify for.
What about rates and payments?
You can check the current purchase rates for the CHIP Reverse Mortgage® here. But remember: with CHIP, you don't make regular mortgage payments. The loan (and interest) is repaid when you sell or move.
Next step
If you're weighing a reverse mortgage to buy, downsize, or grab that second property, let's talk. We'll walk through your numbers, your timeline, and whether it fits your bigger picture.
Reach us at [sayhello@hellomortgage.ca](mailto:sayhello@hellomortgage.ca). We work across Alberta — Edmonton, Sherwood Park, Fort Saskatchewan, Leduc, Nisku, Stony Plain, Spruce Grove, Beaumont, St. Albert, Calgary, Lethbridge, Red Deer, Medicine Hat, Wood Buffalo / Fort McMurray, Grande Prairie, Airdrie, Lloydminster AB, Okotoks, Cochrane, Camrose, Chestermere, Sylvan Lake, Brooks, Strathmore, High River, Wetaskiwin, Lacombe, Canmore, Morinville, Whitecourt, Hinton, Olds, Blackfalds, Taber, Coaldale, Edson, Banff, Grand Centre, Innisfail, Ponoka, Drayton Valley, Cold Lake, Devon, Drumheller, Rocky Mountain House, Slave Lake, Wainwright, Stettler, St. Paul, Vegreville, Didsbury, Bonnyville, Westlock, and Barrhead.
