A HELOC requires mandatory payments. Period. If you don't make payments you are in default. Ask yourself: do you have a solid back-up plan?

HELOC interest rates usually fluctuate with Bank of Canada rate changes, potentially leading to higher payments at ANY time.

This is the big one. There's no guarantee you get to keep your HELOC limit amount for as long as you live in your home, even if you make all payments as agreed, which can create uncertainty or financial emergency.

This isn't just a hypothetical or rare situation. In 2024 in 2025 many people have seen their HELOC limit lowered, meaning that they still have to make payments but they didn't have access to more equity for ongoing uses or emergencies.

So imagine this: your house has gone down in value, interest rates have gone up, your payments have gone up, your fixed income has not gone up and the global limit on your HELOC was just eliminated by your financial institution. Now what?

It's possible that when you got HELOC that a reverse mortgage was an option but you opted for a HELOC because it had slightly lower rates. Now you can't afford the payments and your house has gone down in value.

Maybe you now consider trying to get a reverse mortgage to pay out the HELOC, but because your house has gone down in value and interest rates have gone up or maybe the balance on your HELOC is higher than the amount you can presently be approved for with the reverse mortgage, you are unable to pay out the HELOC with a reverse mortgage as a substitute.

Do you have enough investments that you can cash in to cover the shortfall and pay the capital gains tax associated with that sale of investments? Do you have another property or something of significant value that you can sell to make it work? Are you perfectly 'OK' with selling your house and downsizing no matter the housing market is at?

This is what we mean when we say one needs a highly educated and objective long-term view of your needs and circumstances. You have to understand not just how HELOC works, and what rights the lending institution has over your financial security.

The lowest rate is rarely the most important factor for seniors with limited income or assets. Anyone who can't give you an answer beyond the interest rate as to why you should get a HELOC should not be giving you advice on what mortgage products is right for you.

The dangers and consequences are often overlooked. Or the person trying to convince you to get a HELOC product might have a vested interest. Make sure you're getting advice from someone independent, tenured, objective and experienced.

Qualifications for a HELOC is based on income, so those with lower or fixed income may only qualify for a small HELOC limit amount.

It it's not true that there are no payments for the reverse mortgage. It is true that no payments are required. However, making payments is optional. You do not have to make a payment as long as you live in your home. But you can.

People have a natural tendency to think about things in black-and-white or forget about the middle ground and look at things 'outside of the box'.

You can pay the interest every month so the balance doesn't grow. You have pre-payment privileges every year towards the principal. This allowance privilege varies lender-to-lender. So that something you should consider.

Look at it this way: you're approved for a certain limit with a reverse mortgage (just like a HELOC). You can take a lump sum or a monthly draw (just like a HELOC). If you have excess cash flow every month, you can pay towards the reverse mortgage (just like a HELOC). But you don't have to (NOT like a HELOC). Possibly better than a HELOC if financial security is of utmost importance to you.

Same goes for the balance: if you have investments maturing and it's a favourable time to use your money as you wish then you have to consider the rate of return reinvesting versus the interest you're paying your mortgage and see which path makes more sense.

Now, I have yet to personally hear an investment advisor tell me that it's a fantastic idea for me to have some of my money back rather than leave it invested with them - even if they haven't delivered great results. Maybe your experience differs. Remember: it's your money.

To conclude and summarize: it's not all or nothing with reverse mortgages. Your balance doesn't have to grow if you can and wish to make payments. In fact your balance can go down as your home equity continues to rise. If you have a plan and the means.

In this type of financial transaction we always represent the borrower - not the lender. We are independent and objective. It's your biggest advantage in dealing with us. It's not our job to sell you any one reverse lender's mortgage product. We have other options.

You can trust us not only to tell you which lender's reverse mortgage product is most suitable for you, but we will tell you if a reverse mortgage may not be the right fit for you. If that's the case we'll help you find AND GET the product that's the better fit.

Shopping directly to a reverse mortgage lender on your own you I understand that they can't do that. They can't offer they're competitors products, even if it's more favourable with respect to rate, fees, penalties, bells, and whistles, etc..

And they can't sell you a different kind of product with the different institution that isn't a reverse mortgage if it's the right path for you.

Why apply with just one lender if you don't know if they have the best product?

Work with someone who can access all the right lenders, products from the start.

This is where we particularly shine. For 25 years, Principal Broker Peter Fabry has specialized in Alternative Mortgages for the 1-in-3 Canadians that cannot qualify for the product at their local (Tier 1) bank with limited products and strict guidelines.

There are GREAT mortgages out there from other (Tier 2) banks, trusts, mortgage co's, etc.. That's your BIGGEST ADVANTAGE working with our company. If there is a better product out there we know where to find it and can get it for you.

Why apply with just one lender if they can't help you if you get declined (or your aren't offered enough money for your needs)? They can only sell their own mortgages.

Work with the right broker - right from the start.