A paycheque from the house
How long can the house pay me?
A reverse mortgage does not have to arrive as one large cheque. It can pay you a set amount every month, tax-free, with nothing owed back until the home is sold. Set the monthly income you want and see how many years it lasts, what it costs in compounding interest, and what your family is left with.
Step 1: About you and the home
Both owners must be 55 or over. Approval is based on the younger spouse's age — older qualifies for more.
Reverse mortgages typically advance about 35–55% of the home's value, scaling with age and location. This is the TOTAL you're approved for — your monthly income is paid out of it. Your exact figure comes from the lender.
Step 2: How you want the money
Paid to you every month, tax-free, with no required payments back.
Taken on day one — to clear a mortgage or a debt, say. It comes out of the same approved total, so it shortens how long the monthly income lasts.
Legal (about $1,500–2,500), independent legal advice (about $400–800), and the appraisal. Paid from the advance.
Step 3: The assumptions
Reverse rates typically run 1.5–2.5% above a 5-year fixed — this is an illustration, not a live quote.
Try 0% to see the balance alone, with no help from a rising market.
The race: your home's value vs. what you owe
Each monthly payment only starts growing interest on the day it arrives — which is why the balance climbs so much more gently than it would if you took the whole amount on day one. The dashed line marks where the monthly income stops; the balance keeps growing after it.
Taken monthly instead of all at once
You receive the same $476,500 either way. But a lump sum starts compounding on day one, while a monthly payment only starts on the day it arrives. By year 25 that difference is worth $873,475 of your family's inheritance.
This is the honest argument for taking a reverse mortgage as income rather than a lump sum: only borrow it when you actually need it. If you need the whole amount up front — to clear a mortgage, say — that is a real reason, and the trade-off above is what it costs.
Year by year
| Year | Cash received | Balance owed | Home value | Estate equity |
|---|---|---|---|---|
| Yr 5 · age 75· still paying | $150,000 | $177,234 | $1,391,129 | $1,213,894 |
| Yr 10 · age 80· still paying | $300,000 | $421,267 | $1,612,700 | $1,191,432 |
| Yr 15 · age 85· still paying | $450,000 | $757,275 | $1,869,561 | $1,112,286 |
| Yr 20 · age 90 | $476,500 | $1,078,256 | $2,167,333 | $1,089,077 |
| Yr 25 · age 95 | $476,500 | $1,484,645 | $2,512,534 | $1,027,889 |
What the estate keeps
At year 15 the estate holds $1,112,286 of home equity; at year 25, $1,027,889. Probate in British Columbia on that year-25 figure is $14,042.
On these assumptions the home stays ahead of the balance for the whole 25 years, so there is equity left in the estate throughout. The no-negative-equity guarantee still applies regardless — you can never owe more than the home is worth.
Estimates, not guarantees. Actual advances depend on age, property, location and lender (products like CHIP and Equitable's Reverse Mortgage Flex); rates and home appreciation will differ from any assumption here. Monthly-income programs have their own minimum and maximum payment sizes set by the lender. This is an illustration to explore the trade-offs — not advice, an appraisal, or an offer of credit. We always run the full alternative analysis (a credit line, a refinance, downsizing) before recommending a reverse mortgage.
This calculator is built on published Canadian reverse-mortgage methodology and was verified on August 4, 2026: the balance is re-derived a second, independent way (a closed-form annuity formula against the month-by-month arithmetic), checked against hand-computed cases, and asserted to match our lump-sum projection calculator exactly when the monthly amount is set to zero. Rates and lender programs change; your exact advance and the monthly amount available are confirmed in writing by the lender before you sign anything.
Monthly income glossary
- Monthly advance
- A reverse mortgage paid out as a set amount each month rather than one lump sum. Each payment only begins accruing interest on the day it reaches you, so the balance grows far more slowly than taking the same total on day one.
- Approved total
- The most the lender will advance against your home, based on age, property and location — commonly about 35–55% of the value. Your monthly income is paid out of this total, so a larger monthly amount means fewer years of it.
- Tax-free
- The money is loan proceeds, not income. It is not taxable and does not affect income-tested benefits such as Old Age Security or the Guaranteed Income Supplement — a common reason retirees choose it over drawing down a RRIF.
- No-negative-equity guarantee
- A guarantee (carried by both CHIP and Equitable's Reverse Mortgage Flex) that you or your estate will never owe more than the home's fair market value at the time of sale — even if the compounding balance grows above it.
- Independent Legal Advice (ILA)
- A separate lawyer, acting only for you, who confirms you understand the reverse mortgage before it funds. Standard on reverse files in both BC and Alberta — budget a $400–$800 fee.
Want to know the real monthly amount you'd qualify for?
The figures here are an illustration. Tell us your age, the home and what the money is for, and we'll bring back real numbers from real lenders — plus the alternatives worth checking — in writing.
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