What can you use the money from a reverse mortgage for?

If you’re a homeowner over 55, you may have heard about reverse mortgages but wondered exactly what they can do for you. One of the most appealing things about a reverse mortgage is its flexibility — the money you access from your home’s equity can be used for almost anything. Here’s a quick video overview of some typical uses from my own clients’ experiences:

1. Home renovations and repairs

Many people use a reverse mortgage to make their home more comfortable, safe, or modern. Whether it’s updating a kitchen, finishing a basement, or installing accessibility features, the funds are yours to use without monthly repayment stress.

2. Debt consolidation

Reverse mortgage funds can help pay off higher-interest debts, such as credit cards or personal loans. By consolidating your debts, you reduce financial pressure and free up more of your monthly cash flow.

3. Travel or lifestyle expenses

Want to finally take that dream vacation, support a hobby, or even help grandchildren with school or wedding costs? A reverse mortgage gives you access to cash so you can enjoy life without giving up your home.

4. Medical expenses or long-term care

Unexpected medical bills or long-term care costs can strain retirement savings. Using reverse mortgage funds can provide peace of mind, letting you cover healthcare costs without dipping into other savings.

5. Supplementing retirement income, tax free

Sometimes your pension, CPP and OAS, or savings just aren’t enough. A reverse mortgage can provide an additional source of income, helping you maintain your lifestyle while staying in your home. And the key is that the money is tax free, so you don’t need to worry about capital gains taxes, OAS clawback, or selling investments at a less than optimal time.

How it works

Unlike a traditional mortgage, you don’t have to make monthly payments on a reverse mortgage. You can choose to take the money as a lump sum, in monthly installments, or in some combination of these options. The loan is repaid only when you move out, sell your home, or pass away.

Final thoughts

A reverse mortgage isn’t just a loan. It’s a tool that can give you flexibility, security, and freedom in retirement. Whether you want to renovate, travel, pay off debt, or supplement your retirement income, it’s worth exploring your options with a trusted mortgage professional with years of experience working with the most reputable reverse mortgage lenders in the GTA.

Please feel free to reach out for a free, no obligation review of your situation!