Reverse Mortgage
Myths Debunked
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When it comes to reverse mortgages, there’s a lot of misinformation out there. At GNE Mortgages, we’re committed to clearing the air so you can make an informed decision with confidence. Here are the top myths we often hear — and the truth behind them:
#1 "I'll lose my home."
This is by far the most common misconception — and it's completely false. In Canada, reverse mortgages are designed to help you stay in your home, not lose it. It’s even written into the legal contract: as long as you maintain the property and keep up with taxes and insurance, you’re entitled to live in your home for life. No one in Canada has ever lost their home due to a reverse mortgage.
#2 “I’ll lose all my home equity.”
While interest does accrue on a reverse mortgage, many Canadians still see their home equity grow over time (+6.9% per year) thanks to rising property values. In fact, appreciation often outpaces the interest charged. Plus, over 99% of homes with reverse mortgages still had equity remaining when the loan was paid off. So, you don’t have to worry about leaving your heirs with nothing.
3. “I won’t be able to make any payments.”
Reverse mortgages are flexible. You’re not required to make payments — but you can if you want to. Many clients choose to pay the interest only, keeping their principal intact. You can also pay up to 10% annually without penalty, or repay the full amount whenever you’re ready (penalty-free after 5 years). It’s all about what works for you.
4. “I already have a mortgage — I won’t qualify.”
Actually, many homeowners use a reverse mortgage to pay off an existing mortgage and eliminate their monthly payments. While your current mortgage must be paid off using the funds from your reverse mortgage, this can significantly free up your monthly cash flow — even if there are no remaining funds left over.
5. “My family won’t approve.”
Every family dynamic is different, but we often see reverse mortgages supported — even encouraged — by loved ones. Some clients use the funds to help children or grandchildren with a home down payment, or to give early inheritance gifts. We always encourage open, informed discussions with family, and we’re happy to answer their questions too.
6. “The interest rates are too high.”
Reverse mortgage rates are higher than traditional mortgages — but that’s because they come with no monthly payments, no income qualifications, and no risk of foreclosure. You’re not just paying for a loan — you’re buying peace of mind and flexibility. And compared to high-interest credit cards, unsecured loans, or personal lines of credit, reverse mortgage rates are actually quite competitive.
7. “I’m reducing the size of my estate.”
That depends on how you use the funds. If you don’t spend the money, your estate value remains intact — and your home may continue to appreciate. Even if you use the funds, it’s your equity. The reverse mortgage simply gives you control to access it when and how you need it.
8. “A friend told me reverse mortgages are a bad idea.”
It’s common for people to form opinions based on myths or misinformation. But this is a major financial decision — not one to base on hearsay. Do your research, talk to licensed professionals, and weigh the real pros and cons. At GNE Mortgages, we’ll give you honest, unbiased advice so you can make the best decision for your future.