Unlocking Home Equity: How Reverse Mortgages Are Supporting the Next Generation
For many young Canadians, buying a first home feels out of reach. With high prices, stricter borrowing rules, and the struggle to save for a down payment, the dream of homeownership often depends on whether family can help.
According to a survey by Mortgage Professionals Canada, 70% of buyers who received financial assistance from family said they wouldn’t have been able to purchase without it. That highlights just how critical family support has become in today’s housing market.
But what if parents or grandparents want to help, yet most of their wealth is tied up in their home? That’s where a reverse mortgage can make a difference.
How a Reverse Mortgage Works
Designed for homeowners aged 55 and over, a reverse mortgage lets you access part of your home’s equity without selling or taking on monthly payments. You can choose to receive the funds as a lump sum, monthly instalments, or a combination of both. Repayment—including interest—only happens once the home is sold.
This approach has allowed many families to:
- Contribute to a loved one’s down payment
- Cover education or living expenses
- Provide financial support today, while continuing to live in the home they love
What to Keep in Mind
Since no payments are made during the term of the loan, interest builds over time. That means there may be less equity left in the home later, which could impact estate or inheritance plans. It’s important to weigh these factors carefully within your overall financial picture.
Why More Families Are Considering It
Despite these considerations, reverse mortgages have become increasingly popular. They give families the ability to share wealth sooner—helping children and grandchildren move forward—without waiting until a home is sold or taking on new financial obligations.