Mortgages at 55+ and in Retirement

What are my options for borrowing against my home after 55?

There are three main ways, and they differ mostly in whether you make payments and how much you can borrow.

Option	Payments	Typical maximum	Often suits
Home equity line of credit	Interest at minimum, every month	Up to 65% of your home's value	People who want access to funds and have the income to carry them
Refinance or equity mortgage	Regular payments	Up to 80% of your home's value	People with steady income who want a set payment and a lower rate
Reverse mortgage	None required	Usually up to 55%	Homeowners 55+ who want to stay put without a monthly payment

The maximums for lines of credit and refinances come from federal lending rules. What you are offered depends on your income, your credit and the home.

Should I arrange my mortgage before I retire?

Often, yes. It is usually easier to qualify while you still have employment income, so the year or two before you retire is the time to review your mortgage, set up a line of credit you may want later, or restructure debt so the payments fit your retirement income.

The trade-off is that credit you set up is credit you can use. A line of credit arranged as a safety net only helps if it stays one.

Can I qualify for a mortgage after I retire?

Yes. Lenders count pension income, including CPP, OAS and employer pensions, along with withdrawals from registered accounts and investment income. Some lenders also have programs that give weight to your assets when your income is modest.

Lenders treat retirement income differently from one another. Knowing which lender reads your situation most favourably is a large part of what I do.

What do homeowners 55+ use an equity mortgage for?

Paying off higher-interest debt so monthly costs drop
Renovating so they can stay in the home as they age
Bridging the years between stopping work and starting a pension
Helping children or grandchildren with a down payment
Building a cushion for health care or unexpected costs

What are the costs and risks?

Payments on a fixed income. A payment that is comfortable today has to stay comfortable if costs rise.
Rates can change. Lines of credit usually have variable rates, so the cost can go up.
Less equity later. What you borrow now is not there to fund a move, care costs or your estate.
Fees. Refinancing can involve appraisal, legal and prepayment costs.

If making payments is the problem, compare these with a reverse mortgage, and with downsizing. I will lay all of them side by side.

How does this fit with my retirement plan?

Borrowing in retirement affects your income, your taxes and what you leave behind. I work alongside your financial advisor and accountant so the mortgage supports the plan you already have.

This page is general information and is not financial, legal or tax advice. All mortgages are subject to lender approval.