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ReverseMortgaged.caCanadian reverse mortgages, followed to the endAsk Mitey
Tool

What does it cost to get out of a reverse mortgage early?

Short answer

Repaying a reverse mortgage in the first years costs a prepayment charge on top of the balance: HomeEquity Bank charges 5%, 4% and 3% of the amount in years 1–3, then three months' interest; EQ Bank charges 5, 4 and 3 months' interest, then three months' interest to year 10.

Figures as of November 1, 2026.

If you sell, move or repay in the first years, prepayment charges apply on top of the interest. HomeEquity Bank's current contracts charge 5% of the amount repaid in year 1, 4% in year 2 and 3% in year 3, then three months' interest. EQ Bank charges 5, 4 and 3 months' interest in years 1–3, three months' interest to year 10 and nothing after.

Facts checked How we check facts

What would it cost to get out early?

If you sell, move or repay in the first years of the loan.

Prepayment schedule
HomeEquity Bank, current contracts: 5% of the amount repaid in year 1, 4% in year 2, 3% in year 3, then 3 months' interest.
To repay after 3 years$249,506$242,239 owed + $7,267 charge
Interest so far
$42,239
Prepayment charge
$7,267
3% of the amount repaid
Set-up costs already paid
$3,070
Total cost of the loan so far
$52,576
When the charge is usually waivedHomeEquity Bank has written that there is no charge if the last surviving borrower dies, and the charge is halved if the last borrower moves into a nursing home (2019 article; confirm in your contract).

Estimate, not advice. Educational estimate only, not financial, mortgage, tax or legal advice. Lenders, insurers and governments set their own rules and can change them; confirm with a licensed professional before you decide.

Repaying after 3 years: $242,239 owed plus a $7,267 prepayment charge.

Cost of repaying at the end of each year
YearOwedChargeTotal to repay
1$213,1915% · $10,660$223,850
2$227,2514% · $9,090$236,341
3$242,2393% · $7,267$249,506
4$258,2153 mo. interest · $4,190$262,405
5$275,2463 mo. interest · $4,466$279,711
6$293,3993 mo. interest · $4,760$298,159
7$312,7493 mo. interest · $5,074$317,824
8$333,3763 mo. interest · $5,409$338,785
Assumptions & sources

Assumptions

  • Charge in the year you repay: a percentage of the amount repaid (HomeEquity Bank, years 1–3) or months of interest on it. Your contract defines the exact formula; this assumes you repay the whole balance.
  • HomeEquity Bank, current contracts: 5% of the amount repaid in year 1, 4% in year 2, 3% in year 3, then 3 months' interest.

Sources

  1. HomeEquity Bank — Prepayment charge calculator (contracts 32–34). Checked .
  2. HomeEquity Bank — Reverse mortgage closing costs (blog, 2019; page modified 2026-03-23) (effective October 2, 2019). Checked .

How this tool works

The tool grows the balance from the day you borrow to the day you repay, then applies the lender's charge for that year. HomeEquity Bank's charge in years 1–3 is a percentage of the amount repaid; after that, and for EQ Bank throughout, it's months of interest on that amount. The set-up costs you paid at the start are shown too, because they're part of what the loan cost you.

Plan for the likely reasons people repay early: a move to care, a sale to downsize, or a family member paying it off. HomeEquity Bank has written that the charge is waived on the last borrower's death and halved on a move to a nursing home; confirm the current wording in your contract. If you might need to sell within three years, compare CHIP Open (no charge on full repayment, higher rate).

Mitey the yeti reads a small book and points at a line.
Mitey finds the prepayment table in the contract and reads year four.
EQ Flex: $150,000 repaid after three and a half years
EQ Flex: $150,000 repaid after three and a half years: inputs, steps and result
Borrowed$150,000EQ Flex at 6.28%
Repaidyear 4
Balance$186,244
Charge (3 months' interest)$2,924
Total to repay$189,168

Open this example in the calculator →Computed by our engine with the lender terms and rules on the methodology page.Computed November 1, 2026.

Frequently asked questions

Is there a penalty for paying off a reverse mortgage early?

Yes, in the early years. HomeEquity Bank: 5%, 4% and 3% of the amount in years 1–3, then three months' interest. EQ Bank: 5, 4 and 3 months' interest in years 1–3, three months' interest to year 10, none from year 11. CHIP Open has no charge on full repayment.

Can I repay part of a reverse mortgage without a charge?

EQ Bank lets you prepay up to 10% of principal once every 12 months and interest monthly without a charge. HomeEquity Bank has described a similar 10% yearly allowance; check your contract.

Primary sources

  1. HomeEquity Bank — Prepayment charge calculator (contracts 32–34). Checked .
  2. HomeEquity Bank — CHIP Open rate and prepayment. Checked .
  3. HomeEquity Bank — Reverse mortgage closing costs (blog, 2019; page modified 2026-03-23) (effective October 2, 2019). Checked .
  4. EQ Bank (Equitable Bank) — Reverse mortgage comparison and rates (prime 4.70% as of October 29, 2026) (effective October 29, 2026). Checked .
  5. EQ Bank (Equitable Bank) — Reverse mortgage FAQ. Checked .
Every cost of a reverse mortgageSet-up, servicing, discharge and prepayment fees.Open →Repaying a reverse mortgageWhen it's due and how the payout works.Open →Products and ratesCHIP Open, Flex Lite and the rest.Open →