Real Mortgage Associates Inc | License # 10464
Real Retirement, Real Freedom
Reverse Mortgage Costs & Fees
Understanding the true cost — clearly and upfront
Reverse mortgages in Canada are regulated financial products. While there are no hidden fees, there are costs that every homeowner should understand before proceeding.
These costs generally fall into two categories:
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Costs paid upfront
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Costs deducted from the mortgage proceeds
Understanding how and when these costs apply helps homeowners evaluate whether a reverse mortgage fits their overall retirement plan.
Upfront Costs (Out-of-Pocket)
Property Appraisal Typical range: $250 – $400
An independent appraisal is required to determine the current market value of the home. This helps ensure the mortgage amount is appropriate and protects both the homeowner and the lender.
This cost is typically payable even if you decide not to proceed with the reverse mortgage.
How It Works
These costs are usually added to the mortgage balance rather than paid upfront.
Independent Legal Advice (ILA)
Typical range: $450 – $750
All reverse mortgage lenders in Canada require homeowners to obtain advice from an independent lawyer before completing the mortgage. This step ensures that:
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The mortgage terms are understood
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The decision is voluntary and informed
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There is no undue influence
Independent legal advice is a key consumer protection built into the Canadian system.
Legal & Administrative Costs
Typical range: $1,200 – $3,000
These costs may include:
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Mortgage registration on title
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Lender administrative fees
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Standard legal processing
These fees are comparable to those involved in other mortgage transactions in Canada.
Cost Summary
(Typical Ranges)
Cost Type | Approximate Range Minimum | Approximate Range Maximum |
|---|---|---|
Property Appraisal | 250 | 400 |
Independent Legal Advice | 450 | 750 |
Legal & Administrative Fees | 1200 | 3000 |
Total Estimated Costs | 1900 | 4100 |
A Practical Perspective
A Practical Perspective
Many homeowners choose to have most costs deducted from the mortgage proceeds rather than paying them out-of-pocket. This approach helps preserve cash flow, which is often one of the primary reasons people consider a reverse mortgage in the first place.
However, the long-term impact of these costs should always be evaluated in the context of how long the mortgage is expected to be held.