TorontoReverseMortgage.ca explains how reverse mortgage debt consolidation works for Toronto homeowners 55 and older: which debts are paid at closing, which can stay, and what changes each month. Canadians aged 56 to 65 owed an average of $30,718 in debt other than mortgages in the second quarter of 2026, and those 65 and older owed $15,567 (Equifax Canada). The Toronto average, across all ages, was $21,866.
The aim is the best overall value for clearing what you owe, whether that turns out to be a reverse mortgage or something else.
What happens after your free estimate
You start with the free estimate form. The form asks your age, your home’s value and what you owe, and it shows an estimate on screen without affecting your credit.
Next, you list your debts for Richard Hopkins, Mortgage Broker: each card, line of credit and loan, with its balance, plus any property taxes owing. He compares every reverse mortgage lender in Canada for your situation. Your options and his recommendation arrive by email, showing which debts would be paid at closing and your monthly payments before and after.
Your children can be copied on every email, and questions can go by email, phone or video call. Nothing is signed at this stage. The lender’s credit review comes later, at the application, and only if you decide to go ahead.
What must be paid at closing, and what can stay
Some debts must be cleared at closing, paid from the new mortgage money:
- anything registered against your home, such as a mortgage, a HELOC (home equity line of credit), a lien, a judgment or a registered CRA debt
- property tax arrears
- debts in collections
- money owing under a consumer proposal
Smaller debts, such as a card in good standing, can sometimes stay with you. Lenders differ on this, and Richard’s email shows which of your debts must go.
The reverse mortgage amount is not extra money on top of your debts. Everything that must be cleared comes out of the same amount first, and what is left is yours to use as you choose. A mortgage is paid off the same way, as set out in using a reverse mortgage to pay off your mortgage.
Property tax arrears in Toronto
Overdue City of Toronto property taxes grow by 1.25% a month, about 15% a year, and the City says those charges cannot be waived (City of Toronto). Arrears are paid in full from the mortgage money at closing, late charges included.
Arrears left unpaid can end in a tax sale. The City can register a tax arrears certificate on the title when any part is still owing on January 1 of the second year after the taxes became owing. The home can then be sold by public sale if the full amount isn’t paid within one year after that (City of Toronto Act, 2006).
The guide to property tax arrears in Toronto explains each step.
How your credit is reviewed
Every lender reviews your credit report at the application, and there is no minimum credit score. The report can affect the most you can borrow or which debts must be paid at closing, but never the rate.
A past bankruptcy doesn’t automatically disqualify you. Getting an estimate doesn’t affect your credit at all.
Paying off cards that are at or over their limit typically helps a credit score over time, but it can’t erase the past.
What changes each month
About $750 a month goes to interest alone on $45,000 of card debt at 20%, before any of the balance is repaid. Over five years, the card interest comes to about $45,000 if the balance stays the same.
On a reverse mortgage at the advertised 5-year fixed rates of 6.23% to 6.49%, the same $45,000 would add about $16,200 to $16,900 of interest over five years, with no payments. After closing, there are no required monthly mortgage payments, and your property taxes, home insurance and upkeep stay yours.
An example on a $714,700 Toronto townhouse
For example, an illustrative widower, 72, owns a Toronto townhouse valued at $714,700, TRREB’s City of Toronto townhouse benchmark for September 2026 (TRREB Market Watch, September 2026). He has $45,000 on three credit cards at about 20%, a $32,000 HELOC, and $6,000 of City of Toronto property taxes that have fallen behind.
At 72, the most he could borrow is up to about 54.81% of the value, about $391,700 on $714,700. The $32,000 HELOC and the $6,000 in tax arrears must be paid at closing, because both are claims on the home. He chooses to clear the $45,000 in cards too, so $83,000 goes to his debts, and up to about $308,700 is left unused.
The $750 a month in card interest stops, along with his card and HELOC payments. He has no required monthly mortgage payments, and interest is charged only on the $83,000 he used. His property taxes, home insurance and upkeep stay his to pay, and some of what is left could later help with paying for home care in Toronto.
What it costs and how it is paid back
The advertised 5-year fixed rates at the four lenders ranged from 6.23% to 6.49%, checked October 31, 2026. Interest is added to the balance twice a year, and only on the money you take.
One-time costs usually come to about $2,000 to $3,500: 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 (about $800 to $1,200 in Ontario). The broker is free to you, because the lender pays the broker after the mortgage funds.
The mortgage is repaid when the home is sold, when the last borrower moves out permanently, or when the last borrower passes away. 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 are kept up.
Repaying early brings a charge in the first years, and some lenders allow up to 10% of the balance a year without one. The balance grows as interest is added, but rising prices often make up some or all of it, and Canadian borrowers keep about half of their home’s value on average.
The Toronto reverse mortgage cost guide lists every fee, and alternatives to a reverse mortgage in Toronto covers other ways to clear debt.
What's included when you ask for help
- Lists which of your debts must be paid at closing
- Shows which smaller debts could stay with you
- Compares every reverse mortgage lender in Canada for your situation
- Explains how the credit review can affect the amount, never the rate
- Shows your monthly payments before and after, by email
- Arranges for debts to be paid directly at closing where possible
- Copies your family on every email, if you want
- A recommendation based on your situation, even if it's not a reverse mortgage
Related guides
- Property tax arrears in Toronto: what happens if you fall behind?
- What are the alternatives to a reverse mortgage in Toronto?
- How much does a reverse mortgage cost in Toronto?
Sources
Figures checked October 31, 2026.
- Equifax Canada: Q2 2026 Market Pulse Quarterly Consumer Credit Trends and Insights (news release, August 24, 2026)
- City of Toronto: Late tax bill payments
- City of Toronto Act, 2006, s. 344: tax arrears certificates (Ontario e-Laws)
- TRREB Market Watch, September 2026: City of Toronto MLS HPI townhouse benchmark (published October 6, 2026)