TorontoReverseMortgage.ca describes how a living inheritance works in Toronto. Parents give part of what their children would inherit now, while they can see it help. In Toronto, the help is often a down payment on a first home.
The challenge is not usually the wish to help. It is that the family’s money is in the house, and the parents want to keep living there. A reverse mortgage lets homeowners 55 and older take money from the home’s value with no required monthly mortgage payments.
What happens after your free estimate
The first step is the free estimate form. It asks your age, your home’s value and what you still owe, and it shows an estimate on screen. Getting an estimate doesn’t affect your credit.
Richard Hopkins, Mortgage Broker, then compares every reverse mortgage lender in Canada and sends your options and his recommendation by email. For a living inheritance, you’ll be asked how much you want to give, when your child needs it and how much you’d like to keep for later years.
Each of your children can be copied on every email, so the whole family reads the same numbers. Calls by phone or video call can include them too. You make the decision, and nothing is signed at this stage.
The process has seven steps, and you can stop at any of them. The one meeting normally held in person is near the end, with your own lawyer, for independent legal advice.
What a first home costs in Toronto
A typical condo apartment in the City of Toronto had a benchmark price of $543,800 in September 2026, and a typical townhouse $714,700 (TRREB Market Watch, September 2026). The benchmark is the Toronto Regional Real Estate Board’s price for a typical home. Both were lower than a year earlier, by 6.36% and 5.04%.
For a home under $1.5 million, the minimum down payment is 5% of the first $500,000 and 10% of the rest (Financial Consumer Agency of Canada). On a $543,800 condo that is $29,380. On a $714,700 townhouse it is $46,470.
With less than 20% down, a buyer typically has to buy mortgage loan insurance. A 20% down payment is $108,760 on that condo and $142,940 on that townhouse.
How the gift works
The money is a loan to you, and the gift isn’t taxed
The reverse mortgage money is a loan to you, not income, so it isn’t taxed. Giving it to your child isn’t taxed either. Canada has no gift tax, and the Canada Revenue Agency lists most gifts and inheritances among the amounts that are not reported or taxed (Canada Revenue Agency).
The money goes into your bank account, and you pass it to your child. Your child’s name never goes on your mortgage, and your child owes the reverse mortgage lender nothing.
Your child’s lender will ask for a gift letter
Lenders usually ask the parent to sign a gift letter. It says the money is a gift, not a loan, and that it does not need to be repaid (CMHC). A gift from a relative that doesn’t have to be repaid is an accepted source of a down payment for an insured mortgage (CMHC).
A gift letter only fits money you don’t expect back. If you’d rather lend the money, talk to your lawyer before anything is signed.
Keeping it fair, and keeping enough for yourself
Talk with all of your children together before you decide. Copying each of them on the same emails means no one hears the numbers from someone else.
Some parents give each child the same amount at the same time. Others give to one child now and write down the amount, so the will can make things equal later. A lawyer can help you word it.
Your own needs come first. You never have to take the full amount you qualify for, and anything you don’t take costs nothing.
Keeping some in reserve leaves room for repairs or care at home in later years. The Toronto reverse mortgage calculator shows how different amounts compare.
Timing matters too. A retirement holds a limited number of healthy, active summers, the years with the energy to travel, take on the house projects and keep up with the grandchildren. A gift given now arrives while you can watch it help.
Example: a $110,000 gift from a $1,171,800 East York house
Take an illustrative couple, aged 74 and 70, in a mortgage-free detached house in East York. The TRREB benchmark price for a detached house in the district that covers most of East York (E03) was $1,171,800 in September 2026. With the younger spouse at 70, they could qualify for up to about 53% of the home’s value, about $619,000 (how much a 70-year-old can borrow).
Their daughter is buying a condo apartment at $543,800, the City of Toronto benchmark. They take $110,000 once and give it to her, which covers a 20% down payment of $108,760. They sign a gift letter for her lender, and their son is copied on every email.
At 6.49% a year, the highest advertised five-year fixed rate on October 31, 2026, the $110,000 would grow to about $208,000 in 10 years. If the house were still worth $1,171,800 then, about $964,000 of its value would still be theirs, and more if prices rise. The other $509,000 or so they qualified for was never used.
What it costs and how it is paid back
A gift is usually taken as one amount, so interest starts on all of it from day one. The lenders’ advertised five-year fixed rates were 6.23% to 6.49% when checked on October 31, 2026, roughly 2 to 2.5 percentage points above regular mortgage rates.
Setting up the mortgage costs about $2,000 to $3,500, once: an appraisal (usually about $350), the lender’s set-up fee ($995 to $1,795, usually added to the mortgage) and your own lawyer for independent legal advice. The lawyer charges about $800 to $1,200 in Ontario, not the $300 to $500 that lender paperwork often shows. The Toronto cost guide explains each cost.
There are no required monthly mortgage payments. Interest is added to the balance and compounds twice a year, so the balance grows. Home price growth often makes up some or all of it, and Canadian borrowers keep about half of their home’s value on average.
Nothing has to be repaid until the home is sold, the last borrower moves out for good, or the last borrower dies. You or your family keep every dollar above the balance. Under the no negative equity guarantee, you or your estate never owe more than the home’s fair market value on the day the mortgage comes due, as long as property taxes, insurance and upkeep were kept up.
Repaying early brings a charge in the first years that shrinks over time, and some lenders let you repay up to 10% a year without one. The guide to alternatives in Toronto covers the other ways to get money from a Toronto home.
What's included when you ask for help
- A free estimate that doesn't affect your credit
- Every reverse mortgage lender in Canada compared for you
- The best deal for your home and your gift, by email
- Each of your children copied on the same emails
- Family calls by phone or video call, with you making the decision
- Help choosing a gift that leaves room for your later years
- A plain explanation of how your balance could grow over time
- A free referral to an independent lawyer for your legal advice
Related guides
- How much can a 70-year-old borrow with a reverse mortgage in Toronto?
- How much does a reverse mortgage cost in Toronto?
- What are the alternatives to a reverse mortgage in Toronto?
Sources
Figures checked October 31, 2026.
- TRREB, Market Watch, September 2026 (MLS HPI benchmark prices, City of Toronto and district E03, p. 26)
- Financial Consumer Agency of Canada, How much you need for a down payment
- Canada Revenue Agency, Amounts that are not reported or taxed
- CMHC, General requirements to qualify for homeowner mortgage loan insurance (down payment sources)
- CMHC, Mortgage application tips (gifted down payments need a signed letter saying the gift is non-repayable)