# Reverse Mortgage to Pay Off a Toronto Mortgage | TorontoReverseMortgage.ca > A reverse mortgage can pay off the mortgage on your Toronto home and end the monthly payment. See how the numbers fit. Free estimate, no sales pressure. URL: https://torontoreversemortgage.ca/reverse-mortgage-to-pay-off-mortgage-toronto/ Reverse mortgages in Toronto # Using a reverse mortgage to pay off your mortgage in Toronto A reverse mortgage can pay off the mortgage on your Toronto home, as long as what you owe fits inside the amount your age and home value allow. The old mortgage is paid first from the new mortgage money. After that, there are no required monthly mortgage payments. Taxes, insurance and upkeep stay yours. [Get my free estimate →](/estimate/) [Try the calculator](/tools/reverse-mortgage-calculator-toronto/) Free · No sales pressure · Getting an estimate doesn't affect your credit Last updated October 31, 2026 - ✓For homeowners 55 and older - ✓No required monthly mortgage payments - ✓The money is tax-free - ✓You keep ownership of your home - ✓You never owe more than your home is worth - ✓Your own lawyer explains it before you sign [TorontoReverseMortgage.ca](/) explains how a reverse mortgage can pay off the mortgage on a Toronto home, and when it can’t. The question usually comes up at renewal, when the payment no longer fits a retirement income. Toronto residents 65 and older had a median after-tax income of $30,000 in 2020 ([City of Toronto](https://www.toronto.ca/legdocs/mmis/2024/ec/bgrd/backgroundfile-245670.pdf)). The aim is the option with the best overall value for you, whether that turns out to be a reverse mortgage, a renewal or a line of credit. ## What happens after your free estimate You start with the free estimate form: your age, your home’s value and what you still owe on the mortgage. An estimate appears on screen, and getting it doesn’t affect your credit. Richard Hopkins, Mortgage Broker, then compares every reverse mortgage lender in Canada for your home. He also looks at your renewal offer and a HELOC (home equity line of credit). His email shows how much you could get, the best deal for your home, and how it compares with renewing. You are asked for your latest mortgage statement and the date your term ends, so the payoff can be timed. Your children can be copied on every email, and questions can go by email, phone or video call. Nothing is signed at this stage, and you can stop at any step. ## Why a mortgage renewal can be harder after you retire At renewal, your lender offers a new rate and a new payment. A payment that fit a working income can be hard to keep up on a pension. The usual fixes need a new approval. Moving to another lender for a lower rate means that lender must approve your application, and it may use different criteria ([Financial Consumer Agency of Canada](https://www.canada.ca/en/financial-consumer-agency/services/mortgages/renew-mortgage.html)). Borrowing more, or spreading the payments over more years, needs approval too. A HELOC also has an income test, at a qualifying rate above the rate you would pay. Its payment rises when the prime rate rises, and the lender can reduce or freeze the limit. A reverse mortgage has no bank-style income test: no stress test and no debt ratios. Your income is checked only to confirm the property taxes are comfortably affordable. ## How the payoff works: the most you could borrow, minus what you owe A reverse mortgage takes the old mortgage’s place, so the amount isn’t extra money on top of what you owe. At closing, the old mortgage is paid off first from the new mortgage money. A HELOC registered on the home is paid off and closed the same way, and other debts can be cleared at the same closing, as explained in [clearing debts with a reverse mortgage](/reverse-mortgage-debt-consolidation-toronto/). What you owe must fit inside the amount your age and home value allow. The subtraction is simple: the most you could borrow, minus what you owe, equals what is left. The [guide to how much a 70-year-old can borrow in Toronto](/guide/how-much-can-a-70-year-old-borrow-toronto/) shows the amounts by age, and the [Toronto reverse mortgage calculator](/tools/reverse-mortgage-calculator-toronto/) takes your own numbers. ### An example on a $908,200 Toronto home For example, an illustrative couple, 69 and 67, own a Toronto home valued at $908,200, TRREB’s City of Toronto benchmark for a typical home of any type in September 2026 ([TRREB Market Watch, September 2026](https://trreb.ca/wp-content/files/market-stats/market-watch/mw2609.pdf)). They still owe $260,000 on their mortgage, with 15 years left to pay, and their term ends this fall. At 67, the younger spouse’s age, the most they could borrow is up to about 51.47% of the value, about $467,500 on $908,200. Take away the $260,000 they owe, and up to about $207,500 is left. At closing, the $260,000 mortgage is paid off first from the new mortgage money. Renewing would have meant a payment of about $1,980 a month for 15 more years, at a 4.5% rate within the range lenders advertised in September 2026. The $1,980 payment ends, and they have no required monthly mortgage payments, though their property taxes, home insurance and upkeep stay theirs to pay. With no payments, the $260,000 would grow to about $353,300 to $357,800 in five years at the advertised 5-year fixed rates of 6.23% to 6.49%. ## When a reverse mortgage is not the right way to pay off your mortgage A reverse mortgage is usually the wrong fit for a mortgage payoff in three situations. **What you owe is more than the age-based amount.** At 60, the most you could borrow on a $908,200 home is up to about 48.55% of the value, about $440,900. A $500,000 mortgage would not fit, and the difference would have to come from somewhere else. **You plan to move within a few years.** Set-up costs and early-repayment charges make a short stay expensive. **Your income easily covers a renewal or a HELOC.** Both had lower rates than a reverse mortgage in September 2026, and a regular mortgage’s balance goes down with each payment. Richard compares a renewal, a HELOC and a reverse mortgage for you, by email. The [Toronto alternatives guide](/guide/alternatives-to-reverse-mortgage-toronto/) covers them in more detail, and the [reverse mortgage fit check](/tools/reverse-mortgage-assessment/) is a quick first step. ## 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, only on the money you take, and nothing leaves your bank account each month. 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). Paying off the old mortgage adds a discharge fee, usually $300 to $400. 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. A surviving spouse who is also a borrower stays in the home, and nothing is due. 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: a percentage of the amount repaid or a few months of interest, shrinking over time. The balance grows, but rising prices often make up some or all of the interest, and Canadian borrowers keep about half of their home’s value on average. The [Toronto reverse mortgage cost guide](/guide/reverse-mortgage-cost-toronto/) lists every fee. ## What's included when you ask for help - ✓Works out whether what you owe fits inside your age-based amount - ✓Compares every reverse mortgage lender in Canada for your home - ✓Checks your renewal offer and a HELOC against a reverse mortgage - ✓Shows by email the most you could borrow, minus what you owe - ✓Times the closing around the date your term ends - ✓Confirms the old mortgage is paid off first at closing - ✓Emails you the best deal for your home, with family copied - ✓Recommends the option with the best overall value for you ## How the options compare **Three ways to handle a mortgage renewal in retirement (rates checked October 2026)** | | Renewing with your bank | Home equity line of credit (HELOC) | Reverse mortgage | | --- | --- | --- | --- | | Monthly payment | Yes, principal and interest, every month | Yes, at least the interest, every month | None required. Taxes, insurance and upkeep stay yours | | Income test | Needed to move lenders, borrow more or stretch the payments | Yes, at a qualifying rate above the rate you pay | No bank-style test. Income is checked against the property taxes | | Rate range | Usually about 2 to 2.5 points below reverse mortgage rates (mid-2026) | Prime to prime plus 1%: about 4.70% to 5.70% (prime from Oct 29, 2026) | 6.23% to 6.49%, 5-year fixed (advertised, Oct 31, 2026) | | What happens to the balance | Goes down with each payment | Stays the same unless you pay more than the interest | Grows as interest is added. Rising home prices often make up some or all of it | ## Related guides - [How much does a reverse mortgage cost in Toronto?](/guide/reverse-mortgage-cost-toronto/) - [How much can a 70-year-old borrow with a reverse mortgage in Toronto?](/guide/how-much-can-a-70-year-old-borrow-toronto/) - [What are the alternatives to a reverse mortgage in Toronto?](/guide/alternatives-to-reverse-mortgage-toronto/) ## Sources Figures checked October 31, 2026. 1. [TRREB Market Watch, September 2026: City of Toronto MLS HPI composite benchmark (published October 6, 2026)](https://trreb.ca/wp-content/files/market-stats/market-watch/mw2609.pdf) 2. [City of Toronto: median after-tax income of residents 65 and older, 2020 (report, May 2024)](https://www.toronto.ca/legdocs/mmis/2024/ec/bgrd/backgroundfile-245670.pdf) 3. [Financial Consumer Agency of Canada: Renewing your mortgage](https://www.canada.ca/en/financial-consumer-agency/services/mortgages/renew-mortgage.html) 4. [Scotiabank, Scotiabank increases prime lending rate (4.70% from October 29, 2026)](https://www.newswire.ca/news-releases/scotiabank-increases-prime-lending-rate-845240352.html) ## How it works, from first question to money in your account Seven steps. You can stop at any of them, and nothing is signed until the last two. 1. 01 Free estimate The free estimate form asks about you, your Toronto home and anything owing on it. It takes about 90 seconds and doesn't affect your credit. 2. 02 Every lender compared Richard Hopkins, Mortgage Broker, compares every reverse mortgage lender in Canada for your Toronto home. In his first email you see the most your home could provide and the lenders that suit it, and he asks how much you want. 3. 03 Application Once you've chosen an option, fill out a quick form and send a few documents. Your credit is checked once, and your application goes only to the lender you choose. 4. 04 Approval The lender usually sends its mortgage commitment letter within a day or two. 5. 05 Appraisal A professional appraiser visits the home to confirm what it is worth. 6. 06 Independent legal advice Your own lawyer, who works for you and not the lender, goes through the mortgage with you before anything is signed. 7. 07 Closing The lender sends the money to the lawyer or title company doing the closing. They pay off your current mortgage, any other debts on the home and the costs, then deposit the remaining money into your bank account. ## Frequently asked questions **What if you owe more than a reverse mortgage allows?** A reverse mortgage can't pay off the mortgage on its own in that case. The difference has to come from somewhere else, such as savings, or another option may fit better, such as a renewal or a HELOC if your income qualifies. The amount a reverse mortgage allows rises with age, so a small gap can close over a few years. **Do you have to wait until your term ends?** No. A reverse mortgage can pay off your mortgage at any time, but breaking a fixed-rate term early can cost thousands of dollars in penalties at a big bank. Closing on the date your term ends avoids that charge. A discharge fee of usually $300 to $400 applies either way. **Can a reverse mortgage pay off a home equity line of credit too?** Yes. A HELOC (home equity line of credit) is registered on your home, so it is paid off and closed at closing, the same way as a mortgage. What you owe on both must fit inside the amount your age and home value allow. **Do you have to prove your income for a reverse mortgage?** No. There is no bank-style income test: no stress test and no debt ratio. Your income is checked only far enough to confirm the property taxes are comfortably affordable, and your mortgage statement and property tax bill often cover most of the paperwork. **Does it cost anything to have a broker compare the lenders for you?** No. You pay the broker nothing. The lender pays the broker after your mortgage funds. A broker also reaches things you can't get by phoning lenders yourself. One of the four lenders works only through brokers, and another offers its highest amounts only through brokers. A broker can sometimes get a rate below the published one, or a lower set-up fee. Richard Hopkins, Mortgage Broker, compares every reverse mortgage lender in Canada, and arranges lines of credit and regular mortgages too, so he recommends the option that offers the best overall value for you. ## Other ways a reverse mortgage is used in Toronto [ Clearing debts A reverse mortgage can clear cards, lines of credit and property tax arrears, with no required monthly mortgage payments afterward. Read more → ](/reverse-mortgage-debt-consolidation-toronto/)[ Monthly income from your home Money from your home's value, paid into your bank account every month, without tax and without changing your OAS or GIS. Read more → ](/reverse-mortgage-monthly-income-toronto/)[ Reverse mortgages on Toronto condos Every lender accepts a standard condo, but each one also reviews your building, so the same Toronto unit can get different answers. Read more → ](/reverse-mortgage-condo-toronto/) --- Free reverse mortgage estimate (no sales pressure): https://torontoreversemortgage.ca/estimate/ Operated by Dominion Lending Centres Homestead Financial, a mortgage brokerage licensed by the Financial Services Regulatory Authority of Ontario, brokerage licence #11711. Independently Owned and Operated. TorontoReverseMortgage.ca is a website of Dominion Lending Centres Homestead Financial, not a separate brokerage. Richard Hopkins, Mortgage Broker, licence M16000896.