TorontoReverseMortgage.ca sets out the full reverse mortgage cost in Toronto, from the interest rate to the smallest fee, using the lenders’ advertised numbers checked October 31, 2026.
Most Toronto homeowners want one number before going further. The challenge is not usually the fees, which are modest and published. It is the interest, which is added to the balance twice a year.
This page lists each cost, shows the interest year by year, and works through an illustrative Toronto example.
What are the one-time costs of a reverse mortgage in Toronto?
The one-time costs add up to about $2,000 to $3,500: an appraisal, your own lawyer’s independent legal advice, and the lender’s set-up fee. Add $300 to $400 if an existing mortgage or HELOC (home equity line of credit) has to be paid off and removed from the title. The broker costs you $0.
| Cost | Typical amount | How it’s paid |
|---|---|---|
| Appraisal (a professional’s report on the home’s value) | Usually about $350 | Often the one cost paid up front |
| Lender’s set-up fee | $995 to $1,795 | Built into the mortgage |
| Your own lawyer’s independent legal advice | About $800 to $1,200 in Ontario | Billed by your lawyer |
| Discharge of an existing mortgage or HELOC | Usually $300 to $400 | Only if one is on the title |
| The broker | $0 | Paid by the lender after the mortgage funds |
Lender paperwork often shows $300 to $500 for the lawyer, but your own lawyer sets that fee, and about $800 to $1,200 is realistic in Ontario (independent legal advice in Toronto).
Set-up fees aren’t built the same way: one lender’s fee includes its own closing legal costs, while others bill those separately. Richard Hopkins, Mortgage Broker, compares every reverse mortgage lender in Canada at no cost to you, and when lenders compete, the set-up fee can often be reduced.
Any mortgage still on the home is paid off first, out of the same money (paying off a Toronto mortgage with a reverse mortgage).
How fast does the interest add up?
Interest is the largest cost: advertised 5-year fixed rates ranged from 6.23% to 6.49% on October 31, 2026, and no lender prices by city. With no required monthly mortgage payments, the interest is added to the balance. On $150,000 at 6.49%, the balance grows to $206,434 after five years.
Canadian reverse mortgages compound twice a year: every six months, the interest owing is added to the balance and starts being charged interest too. Property taxes, home insurance and upkeep are still yours to pay.
Here is $150,000 taken on day one at 6.49% fixed, with no payments:
| Year | Balance at year end | Interest added that year | Total interest so far |
|---|---|---|---|
| 1 | $159,893 | $9,893 | $9,893 |
| 2 | $170,438 | $10,545 | $20,438 |
| 3 | $181,679 | $11,241 | $31,679 |
| 4 | $193,662 | $11,983 | $43,662 |
| 5 | $206,434 | $12,772 | $56,434 |
The rate matters more than the fees. At 6.23%, the lowest advertised 5-year rate, the same $150,000 owes $203,850 after five years, which is $2,585 less. Set-up fees differ by $800 at most.
How the rate compares with a regular mortgage or a HELOC
Reverse mortgage rates are about 2 to 2.5 points above the lowest regular 5-year mortgage rates, and about 1 to 2 points above typical HELOC rates (mid-2026). The Financial Consumer Agency of Canada also notes the rate is usually higher than both.
In return, there are no required monthly mortgage payments and no income test like a bank’s. A HELOC or a regular mortgage needs both (the alternatives to a reverse mortgage in Toronto).
What makes the cost higher or lower?
Five things change the cost: the lender, the term, how much you take and when, your age, and whether you repay early. Most of them are choices, so two owners of identical Toronto homes can pay very different amounts over the years.
| What changes | How it changes the cost |
|---|---|
| The lender | 5-year fixed rates from 6.23% to 6.49% (October 31, 2026); set-up fees from $995 to $1,795 |
| The term | Fixed terms of 1 to 5 years, or variable; each has its own rate, and the rate resets when the term ends |
| How much you take, and when | Interest only on money taken; later amounts get the lender’s rate at that time (some add a premium), and some lenders charge about $50 per request |
| Your age | The market’s top tier lends up to 60% of the home’s value to borrowers 70 and older, at a higher rate on the whole balance |
| A couple’s ages | Some lenders use the younger spouse’s age, others a combined or average age |
| Repaying early | A charge in the first years, stepping down each year |
Some lenders also accept optional interest payments, which keep the balance from growing. Age decides the most you can borrow (how much a 70-year-old can borrow in Toronto).
What does it cost to pay a reverse mortgage off early?
A charge applies only in the first years, and it steps down over time. Lenders charge either a percentage of the amount repaid, around 4% to 5% in year one, or a set number of months’ interest, roughly five months’ interest in year one. After year three, the charge is roughly three months’ interest.
- The charge falls to $0 after year five at some lenders (with three months’ written notice), and after year ten at others.
- The years count from the day the mortgage first funds, and they don’t start over at renewal.
- The charge is $0 at every lender if the mortgage ends because the last borrower passed away.
- A permanent move into long-term care cuts it by half on some standard products, and some lenders waive it (reverse mortgages and long-term care in Toronto).
- Some lenders let you repay up to 10% of the balance each year with no charge.
Which lender’s schedule suits your plans is part of the broker’s comparison, free to you.
What would a reverse mortgage cost on a typical Toronto home?
On a typical Toronto townhouse, an illustrative $150,000 reverse mortgage has $3,345 in one-time costs, using the highest set-up fee and legal bill, and $56,434 of interest over five years at 6.49%. The owner would still have equity equal to about 71% of the home’s value if its value stayed flat.
An illustrative example on a $714,700 Toronto townhouse
An illustrative Toronto widow, 74, owns a townhouse worth $714,700, the City of Toronto townhouse benchmark for September 2026 (TRREB Market Watch, September 2026). At 74, she could borrow up to about 56.8% of its value, about $405,700. She takes $150,000, and no interest is charged on the rest.
Her one-time costs are $350 for the appraisal, a $1,795 set-up fee and $1,200 for her own lawyer: $3,345 in total, with $0 for the broker. The set-up fee is built into her $150,000 mortgage, so $148,205 goes into her bank account.
At 6.49% with no payments, her $150,000 balance grows to $206,434 after five years ($56,434 of interest), or to $203,850 at 6.23%. She would still have $508,266 of equity if her $714,700 home’s value stayed flat, and growth in value often offsets some or all of the interest. Canadian reverse mortgage borrowers keep about half their equity on average.
The bottom line
A Toronto reverse mortgage costs about $2,000 to $3,500 in one-time costs, plus interest that's added to the balance. The lender and the rate matter more than the fees: on $150,000 over five years, the highest and lowest advertised rates were $2,585 apart. The Toronto reverse mortgage calculator shows the numbers for your own home.
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