Question 1

Why are reverse mortgage interest rates higher than traditional mortgage rates?

Accepted Answer

Reverse mortgage interest rates are usually higher because the product gives you more flexibility and built-in protections than a standard mortgage, including:

- No required monthly mortgage payments: With a reverse mortgage, if you choose not to make monthly payments, the amount owed and the lender’s risk grow over time.
- Repayment timing is unknown: The loan is usually repaid when you sell, move out, or pass away, so the lender does not know when the repayment will occur.
- No negative equity guarantee: In Canada, this protection generally means you or your estate will not owe more than the home’s fair market value when it is sold, as long as loan obligations are met. This adds risk for the lender if property values decline.

Put simply, you are paying for flexibility, protection, and deferred repayment.

Question 2

Can you secure better terms than the bank offers directly?

Accepted Answer

Yes. By working through a broker with significant origination volume, you gain access to wholesale pricing, multi-lender competition, and personalized advocacy that individual applicants simply cannot replicate on their own.

Wholesale market access: Because we originate significant volume, we operate in the wholesale lending market - not the retail one. That means we access rate and setup fee promotions that are not advertised to individual borrowers.

Lender competition: We do not simply accept the first offer on the table. By approaching multiple lenders simultaneously, we create competitive tension that can lead to sharper pricing, more flexible terms, and a stronger overall outcome for you.

Personalized advocacy: Automated bank systems process applications without context - treating every applicant the same. When we represent you, we highlight the specific strengths of your property and financial profile directly to the lender. This creates the leverage needed to negotiate policy exceptions and secure superior terms that a standard application would never achieve.

The posted rate in any comparison table is the starting point, not the final word. The terms available to you depend on who is negotiating on your behalf.

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