For retired homeowners and those close to retirement
Retiring does not end your borrowing options. Lenders simply read your income differently, and there are several routes to compare.
Retirement income often comes from several places: pensions, government benefits, RRIF withdrawals and investments. Some lenders can use these sources, and some look at savings and equity too. The right choice depends on what you need, how long you plan to stay and what you want to leave behind.
You've started an application.
Saves as you go · No credit check · A licensed mortgage professional follows up
How lenders look at retirement mortgages borrowers
1Many lenders can count pension income, government benefits, RRIF withdrawals and rental income when documented. Some may also consider investment income or a portion of savings. Each lender sets its own rules.
2Age alone is not a barrier under Canadian human rights rules, but a lender will still review your income, credit, debts and the property. Approval is subject to the lender.
3Options range from a regular mortgage or a HELOC to a reverse mortgage, which pays out equity without monthly payments but accrues interest, or to downsizing. Each has different costs and trade-offs for your estate.
4Costs include interest, lender and broker fees, legal and appraisal. Consider family and your legal advisor before using equity, since it affects what you leave behind.
Get ready
What lenders will ask you for
Government photo ID
Pension and benefit statements, such as CPP, OAS and any workplace or private pension
RRIF, annuity and investment statements, and notices of assessment
Your latest property tax bill, proof of home insurance and current mortgage statement
A list of your debts and a short note on what the money is for
Your options
Which kind of lender fits you
Option 1
Regular mortgage or refinance
Possible when pension and other income qualify. Often the lowest cost, with monthly payments.
Option 2
Home equity line of credit (HELOC)
Flexible access to equity, with interest-only payments. Requires qualifying income and the rate can change.
Option 3
Reverse mortgage
Lets eligible homeowners borrow against their home without monthly payments. Interest builds up, so the debt grows and affects what is left for heirs.
Option 4
Downsizing
Selling and moving to a smaller or lower-cost home can release equity without new debt. Consider moving costs, taxes and fees.
Avoid these
Common mistakes
!Choosing a reverse mortgage without comparing the lower-cost options, and without family and legal advice.
!Not thinking about the long term. A balance that grows each year can be an issue years later.
!Forgetting that RRIF withdrawals and other income can change from year to year, which may affect your budget and lender view.
!Using home equity to support a family member without a clear plan or independent advice.
Take action
Your first steps
1Write down what you need the money for, how much and for how long.
2Gather your pension, benefit and RRIF statements, notices of assessment and property documents.
3Think about what you want for your estate and your family, and talk it through with them if you wish.
4Start the intake so a broker can compare a regular mortgage, HELOC, reverse mortgage and other options.
5Review the written costs and terms, and get independent legal advice before you sign.
The intake
What your application will ask
Your online application goes one topic at a time and saves every answer and document as you go, so you can stop and come back. It never runs a credit check, and a licensed mortgage professional reviews it and follows up.
For retirement mortgages borrowers
What is the home worth, where is it, and what is owed on it today?
What income do you receive (pensions, CPP and OAS, RRIF withdrawals, investments, rental)?
How much do you need, what is it for, and do you plan to stay in the home?
How would the debt be repaid, whether through payments, a sale, or from your estate?
Plus the basics everyone answers 13
Your full name, email, mobile number and the best time to call.
The city you live in, and whether you are a Canadian citizen, permanent resident, or other status.
Are you applying alone or with someone else? If with someone, their name and how you are related.
Your goal: buy, refinance, renew, take out equity, or consolidate debt?
The property type (house, condo, multi-unit) and the city it is in.
Will you live in it, rent it out, or both?
The purchase price or estimated value, and your target closing or renewal date.
Your down payment or available equity, and where it comes from (savings, RRSP/FHSA, a gift, sale of another property).
Your approximate yearly household income before tax.
Your monthly debt payments: car loans, credit cards, lines of credit, student loans, support payments.
Your own estimate of your credit score: excellent, good, fair, poor, or not sure.
In the last 7 years, any bankruptcy, consumer proposal, collections, or missed mortgage payments?
May the broker contact you? (A credit check is only ever run later, with your separate written consent.)
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Answers
Questions people ask
Can I get a mortgage when I am retired?
Many retired homeowners do. Lenders may count pension, benefit, RRIF and other documented income, along with your credit and equity. Approval depends on the lender and is never guaranteed.
Is a reverse mortgage the same as a HELOC?
No. A HELOC usually requires interest payments and income to qualify. A reverse mortgage has no required monthly payments but interest accrues and the balance is repaid when you sell or move.
Does my age matter?
Lenders look at your income, credit, debts and the property. Some products, like a reverse mortgage, have minimum ages. Ask a broker what applies to you.
What does it cost?
Interest, plus typically lender and broker fees, legal and appraisal costs. Reverse mortgages can have higher rates and fees. Get the total cost in writing.
Should my family be involved?
It is your decision, but talking with family and getting independent legal advice is wise, especially when borrowing against your home affects your estate.
Does starting the intake affect my credit?
No. It is only questions. A credit check, if needed, comes later and only with your permission.
General information, not mortgage, legal or tax advice. Lender rules change and every application is reviewed on its own facts. Your application and documents are stored privately and go only to a licensed mortgage professional at Top Mortgages Inc; they are never sold, and no credit check is run without your separate written consent.