TorontoReverseMortgage.ca compares the alternatives to a reverse mortgage in Toronto, using Toronto prices, Toronto taxes and the City’s own programs.
Most homeowners weighing a reverse mortgage want to know what else could give them the money they need. The challenge is not usually a shortage of options. It is that each one asks for something different: monthly payments, an income that qualifies, or a move.
This page sets out each alternative with its Toronto costs, and when it fits.
What is a better option than a reverse mortgage?
No option is better for everyone. A HELOC (home equity line of credit) or a regular mortgage usually has a lower rate, and fits when your income qualifies for the monthly payments; selling suits someone ready to move, and Toronto’s tax programs cover only the yearly increase. A reverse mortgage fits when you want to stay without required monthly mortgage payments.
The Financial Consumer Agency of Canada also suggests comparing other options before choosing a reverse mortgage.
| Option | Monthly payments | Income test | Stay in the home | Typical cost | Main risk |
|---|---|---|---|---|---|
| Reverse mortgage | None required | No bank-style test | Yes | 6.23% to 6.49%, plus about $2,000 to $3,500 one-time | The balance grows as interest is added |
| HELOC | At least the interest | Yes | Yes | About 4.70% to 5.70%, plus legal fees and an appraisal | Payments rise with prime; the limit can be cut or frozen |
| Regular mortgage or refinance | Interest plus repayment | Yes, stress-tested | Yes | About 2 to 2.5 points below reverse rates | Payments must fit your income |
| Sell and buy smaller | None | No | No | $76,407 in the example below | Selling costs can’t be recovered |
| City tax deferral | None on the deferred increase | Income of $62,000 or less | Yes | Repaid when you no longer own the home | Covers only the yearly increase |
| Private second mortgage | Usually interest only | Mainly on equity | Short term | About 10%, plus a 1% to 2% fee | Renewal is never guaranteed |
Rates were checked October 31, 2026. HELOC rates use the 4.70% prime rate that starts October 29, 2026. Property taxes, home insurance and upkeep stay yours with every option that keeps you in the home.
Richard Hopkins, Mortgage Broker, arranges HELOCs, refinances and regular mortgages as well as reverse mortgages, and compares them for your situation by email, so you get a recommendation based on your situation, even if it’s not a reverse mortgage.
How does a home equity line of credit compare?
A HELOC charges less interest: about 4.70% to 5.70% (from October 29, 2026), against 6.23% to 6.49% for a reverse mortgage. In exchange, you pay at least the interest every month, and the bank tests your income first. The limit can go up to 65% of the home’s value, and $50,000 of yearly income supports roughly $100,000 to $160,000 of HELOC.
The payment follows the prime rate (the rate banks base lines of credit on), which rose 4.75 points between March 2022 and July 2023. The bank can also reduce or freeze the limit.
On $150,000 at 5.70%, the interest alone is about $713 a month, or $85,500 over 10 years at an unchanged rate, with the $150,000 still owing. A reverse mortgage at an unchanged 6.49% would have nothing paid and $284,100 owing, though growth in the home’s value often offsets some or all of that interest.
Can you refinance or take a regular mortgage instead?
Yes. A regular mortgage or refinance can go up to 80% of the home’s value, at rates about 2 to 2.5 points below reverse mortgage rates, as long as your income qualifies. You make monthly payments of interest plus repayment, and banks test your income at the greater of 5.25% or your rate plus 2 points (OSFI).
Home equity alone doesn’t qualify you, so a refinance fits when steady income easily covers the payments. A reverse mortgage can also pay off an existing mortgage when its payments no longer fit a retirement income.
What does it cost to sell and buy smaller in Toronto?
Selling a Toronto house and buying a condo costs tens of thousands of dollars, partly because Toronto buyers pay two land transfer taxes: Ontario’s and the City’s own. In the illustrative example below, the move costs $76,407. Whatever money is left afterward comes with no loan and no interest.
An illustrative move from a $1,111,200 semi to a $543,800 condo
An illustrative couple sells a semi-detached house for $1,111,200 and buys a condo apartment for $543,800, the City of Toronto benchmarks for September 2026 (TRREB). Commissions are negotiable in Ontario (RECO), so the example uses 4.5%, the middle of a common 4% to 5% range.
| Cost | Amount |
|---|---|
| Commission, 4.5% of $1,111,200 | $50,004 |
| HST on the commission, 13% (CRA) | $6,501 |
| Ontario land transfer tax on $543,800 (Ontario) | $7,351 |
| Toronto land transfer tax on $543,800 (City of Toronto) | $7,351 |
| Legal fees to sell and to buy (planning estimate) | $2,700 |
| Movers (planning estimate) | $2,500 |
| Total | $76,407 |
The couple would have $490,993 left, assuming no mortgage on the semi. Repairs before the sale and the condo’s monthly fees are extra (what downsizing in Toronto costs). Selling fits when the house is more than you need and you’re ready to leave it.
Can Toronto’s property tax programs help instead?
Yes. The City of Toronto can cancel or defer the yearly increase in your property tax bill for low-income seniors, and Ontario pays eligible homeowners 64 and older a grant of up to $500 a year. The City’s programs don’t change the rest of the bill, and neither program provides a lump sum.
For 2026, household income must be $62,000 or less, and you must have owned and lived in the home for at least a year before October 31, 2026 (City of Toronto). The deadline is November 2, 2026, and you reapply every year.
- Cancellation wipes out the increase, for owners 65 and older (or 60 to 64 receiving GIS, or receiving disability benefits) whose home is assessed below $975,000. Assessments still use 2016 values (MPAC).
- Deferral postpones the increase, with no assessment limit, and also covers owners 50 and older who receive a pension. The deferred taxes become due when you or your estate no longer own the home (Toronto Municipal Code, chapter 767).
Ontario’s Senior Homeowners’ Property Tax Grant pays up to $500 a year to homeowners 64 and older with incomes under $50,000 (single) or $60,000 (couple), claimed with your tax return.
A City deferral and a reverse mortgage are one route or the other (how Toronto’s property tax deferral works). A deferral is agreed with the City in advance; falling behind is different and collects late-payment charges (property tax arrears in Toronto).
What about a private second mortgage or renting out part of the home?
A private second mortgage is a short bridge, not a long-term answer. Banks don’t offer standalone second mortgages, so they come from private lenders at about 10% interest plus a 1% to 2% lender fee, usually interest-only, for one or two years. Renewal is never guaranteed and usually costs the fee again.
A private second fits only with a firm way out, such as a sale with a signed agreement and any conditions already cleared.
Renting out a room or a basement apartment
Rent brings in monthly money without borrowing. For scale, a one-bedroom in a purpose-built Toronto-area rental building averaged $1,761 a month in CMHC’s October 2025 survey, and a two-bedroom $2,045 (CMHC). A room or a basement unit in a house is a different market, and renting makes you a landlord with a tenant in your home.
The bottom line
No single alternative is better for everyone. A HELOC or a regular mortgage suits steady income and room for monthly payments, selling suits someone ready to move, and the City's programs help only with the yearly tax increase. Richard Hopkins, Mortgage Broker, arranges HELOCs, refinances and regular mortgages as well as reverse mortgages, so he recommends the option that offers the best overall value for you.
Get a free estimate for your Toronto home. It's free, and there's no sales pressure.