25 years ago, when I started mortgage brokering, I quickly realized I did not want to spend my career chasing “best rate” clients with perfect credit and income.

Back then, the routine was always the same: someone calls, asks for your “best rate,” you spend time reviewing their situation, crunching numbers…find them them an amazing mortgage perfect for their needs/goals... and then they go talk to their bank. 

The bank says, “We’ll beat it,” and they end up with a 'terrible' mortgage that will cost them thousands more, and take years longer to pay off. But the 'sticker' rate appears lower. They missed the point.

So I decided to become an expert in more challenging mortgages - for people that need REAL solutions.

I decided to focus on the 1-in-3 Canadians who can’t be approved by a major bank, but still deserve a solid solution. People who are self‑employed, have bruised credit, or have a unique situation that doesn’t fit the neat box the bank wants to see.

When you’re in that group, you don’t need a gimmick rate. You need an intelligent solution.

With alternative and private lenders, there is never “one rate.” Each lender has their own niche, their own appetite, and their own way of pricing risk. 

It depends on the down payment, the credit score, the property, the income story, and a dozen other details.

Reverse mortgages are exactly the same. There is no single “reverse mortgage rate.

It depends on the lender, the product, how much you take up front, how much you leave for later, whether you want monthly deposits, and how the renewal is structured.

 From the lender’s point of view, it’s all about one thing: their yield—how much money they keep in their pocket over time.

They can give you:

• A high rate and a low fee, or

• A low rate and a high fee

As long as the total return to them hits their target, they are happy. The problem is, that can leave you confused and exposed if you’re only looking at the first number they show you.

If you really think about it, any mortgage lender could offer 0% interest… as long as they charge a high enough fee. That’s not a good deal for you—just a clever way for them to advertise.

You’ve actually seen gimmicks this before geared to unsophisticated rate shoppers:

Department Store Financing, or Car Dealerships.

“0% for one year!” sounds amazing. But if you don’t pay it off in full within that year, the interest and fees that kick in after can be enormous. Suddenly, what felt like “free” money becomes something you regret very quickly.

Reverse mortgages can kind of work the same way if you only look at the shiny headline rate and ignore the rest of the structure, although not as dramatic because people rarely regret their reverse mortgage. But it's easy to overpay if you ignore the "gotchas" or don't see the big picture.

Even if you're good at math you can miss what's lurking in the fine print with ANY financing.

Not just regular mortgages. So let’s break it down properly. So have a coffee and pay attention.

THE FOUR (4) SEPARATE REVERSE MORTGAGE RATES:

With a reverse mortgage, there are four different rates that matter:

1. The rate on the money you take at the start

2. The rate on any extra lump‑sum money you take later

3. The rate on regular monthly deposits into your bank account

4. The rate when your term ends and you renew

Most marketing you see only talks about number 1. My concern is numbers 2, 3, and 4—because that’s where the long‑term cost really lives.

Let’s walk through each one in plain language.

1. The rate on your initial funds

This is the interest rate on the money you borrow on day one. It’s usually fixed for a term of 1–5 years, and the 5‑year fixed term is typically where you’ll find the most competitive rate.

Many people stop their thinking here. But with a reverse mortgage, this can be the least important rate, because:

• You might not take all the money up front.

• You might keep the reverse mortgage for 10, 15, or 20 years, which means multiple renewals.

I generally prefer a low 5‑year fixed rate over shorter terms. Shorter terms often have higher rates and force you back to the table sooner, which is exactly when the lender can adjust things in their favour.

Variable rates are usually priced as “Prime plus” a hefty premium. That puts your cost directly in the hands of interest‑rate policy, without giving you a meaningful benefit in return.

2. The rate on future lump‑sum withdrawals

One of the biggest advantages of a reverse mortgage is that you don’t need to take all the available money at once. You can take some now and leave some for later.

For example:

• $100,000 today

• $50,000 next year

• Another $50,000 the year after

Because you only pay interest on money after you’ve taken it, this kind of “pay‑as‑you‑go” approach can save you a lot over time.

But here’s the key: most lenders use a different rate for money you take later than they do for the initial advance. When you come back for more, they charge you whatever their reverse mortgage rate is at that time, not the original rate.

Some lenders price these later lump sums fairly and transparently. Others quietly charge more. If your plan is to take money in stages, this second rate can have just as much impact as your starting rate.

3. The rate on regular monthly deposits

Many retirees like the idea of turning part of their home equity into a steady monthly income: $2,000, $3,000, or whatever fits your budget.

Again, this is not priced the same way by every lender.

Some lenders use their regular fixed reverse mortgage rate for those monthly advances. Others tie them to a variable rate with a markup, which can make the cost higher and less predictable.

Some products offer tools like card‑style access where you can draw up to a monthly limit and only pay interest on what you actually use. That can be very efficient if you simply want to top up your cash flow without borrowing more than you need.

If your main use of a reverse mortgage is monthly income, this third rate becomes critical.

4. The renewal rate when your term ends

This is the most overlooked—and often the most expensive—piece.

In Canada, terms are short. You might have a 5‑year term on a reverse mortgage you keep for 15 years. That means you’ll renew multiple times.

At each renewal:

• Your old rate ends.

• Your lender offers you a new rate and a new term.

With reverse mortgages, this matters more than with regular mortgages for a few reasons:

• There are only a small number of reverse mortgage lenders, so your options to move are limited.

• There can still be penalties or costs to switch, even at renewal.

• If your balance has grown significantly, you might not qualify to move to another lender at all.

On top of that, some lenders add a premium at renewal—a little extra percentage they tack onto their normal rate. Others simply give you their standard rate with no premium. A few products are “lifetime” rates with no renewal at all, so there is no renewal risk.

This fourth rate can quietly cost you far more than a tiny difference in the initial rate, which is why I pay so much attention to it when I’m reviewing lenders.

How I put this together for you:

When I work with retirees on a reverse mortgage, I’m not just trying to win the “lowest rate” headline. I’m looking at:

• How much you need now versus later

• Whether you prefer lump sums, monthly deposits, or both

• How long you plan to stay in the home

• How much renewal and interest‑rate risk you’re comfortable taking on

Then we look at how each lender handles all four rates, not just the first one. The goal is simple: a reverse mortgage that works for you for the long term, without nasty surprises hidden in the fine print.