Reverse mortgages have been available in Canada for decades, yet many homeowners still hesitate — not because of the product itself, but because of things they have heard that simply are not true.

Some of these myths come from outdated information. Some come from well-meaning family members who are not familiar with how Canadian reverse mortgages actually work. And some come from confusion with products in other countries, particularly the United States, where the rules are different.

Let us set the record straight on the five most common misconceptions.

The truth: You remain the registered owner of your home throughout the entire life of the loan.

A reverse mortgage is a loan secured against your property — exactly like a conventional mortgage. The lender registers a charge on title, but ownership stays with you. You can renovate, rent a room, or leave the home to your children in your will. The lender has no ownership interest whatsoever.

You can only lose your home if you fail to meet your basic obligations: paying property taxes, maintaining home insurance, and keeping the property in reasonable condition. These are the same obligations you have with any mortgage.

The truth: You have the right to live in your home for as long as you choose.

As long as you meet the basic obligations above, the lender cannot force you to leave. The loan does not become due until you choose to sell, permanently move out (for example, into long-term care), or pass away.

This is one of the most important features of a Canadian reverse mortgage: it provides security of tenure. You cannot be evicted simply because the lender wants their money back.

The truth: Most reverse mortgage borrowers leave significant equity to their heirs.

Yes, interest accumulates on the loan balance over time. But consider the full picture:

• Canadian home values have historically appreciated over the long term
• The loan is capped at 20–55% of your home's value at the time of borrowing
• The no-negative-equity guarantee means your estate will never owe more than the home is worth

In many cases, the home's appreciation over the years of the loan more than offsets the accumulated interest. Your children may inherit less equity than if you had never taken the loan — but they are very unlikely to inherit nothing.

More importantly: many families find that a reverse mortgage allows parents to give while living — helping adult children with a down payment or education costs today, rather than leaving a larger estate later.

The truth: Reverse mortgages are a legitimate retirement planning tool used by financially sophisticated homeowners.

This myth may have had some basis decades ago, when reverse mortgages were less regulated and less understood. Today, they are used by a wide range of Canadians — including those with investment portfolios, pension income, and professional financial advisors — as part of a deliberate retirement income strategy.

Common reasons financially comfortable seniors choose a reverse mortgage:

• To avoid drawing down investment accounts in a down market
• To fund home renovations that allow them to age in place
• To help adult children without depleting savings
• To reduce monthly cash flow pressure and enjoy retirement more fully

A reverse mortgage is not a sign of financial failure. It is a tool — and like any tool, it works well when used appropriately.

The truth: Reverse mortgage rates are higher than prime-rate products, but the comparison is not apples-to-apples.

Reverse mortgage interest rates in Canada are typically 1–2% higher than conventional mortgage rates. This is because the lender takes on more risk: they cannot require monthly payments, they guarantee you will never owe more than the home is worth, and the loan term is uncertain.

When comparing costs, it is important to factor in what you are getting in return:

• No monthly payments — which frees up cash flow
• No income or credit qualification — which makes it accessible when other products are not
• Certainty — the loan cannot be frozen, reduced, or called as long as you meet basic obligations

For many borrowers, the value of those features far outweighs the higher interest rate. A qualified specialist can help you model the actual numbers for your situation.

Reverse mortgages are not perfect for everyone — but they are far more useful, and far less risky, than the myths suggest. If you have dismissed the idea based on something you heard years ago, it may be worth taking a fresh look.

The best way to cut through the noise is to speak with a licensed specialist who can answer your specific questions honestly, without pressure.

Have questions about how a reverse mortgage would work for your situation? Book a free conversation — no obligation, no pressure.