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Reverse mortgage: lump sum or monthly advances?

Short answer

Interest only runs on money you've taken, so drawing monthly usually costs less than taking everything up front, even though scheduled advances carry an adjustable rate (EQ Flex 7.04%, Income Advantage 7.36%) above the fixed lump-sum specials. Compare all three ways here.

Figures as of November 1, 2026.

Interest only runs on money you've taken. Drawing $120,000 as $1,000 a month over 10 years, instead of all at once, leaves about $78,803 less owed by age 90, even with the monthly advances at EQ Flex's 7.04% adjustable rate and the lump sum at CHIP's 6.49%. FCAC warns a lump sum you don't need right away "may be an expensive way to borrow money".

Facts checked How we check facts

Take it all now, or as you need it?

The same total money, three ways. Interest only runs on what you've taken.

The rest comes monthly.
Default: HomeEquity Bank CHIP 5-year special rate, 6.49% as of October 29, 2026
Default: EQ Bank Flex scheduled advances, adjustable at prime + 2.34% = 7.04% (from $500 a month, up to 20 years). HomeEquity Bank Income Advantage: 7.36% variable, at least $1,000 a month. CHIP itself pays lump sums only.
Interest avoided by age 90$78,803Monthly advances instead of taking it all up front
Owed at 82: all up front
$227,280
Owed at 82: monthly
$172,504
$1,000 a month
Owed at 82: mix
$181,634
$20,000 now + $833/month
Monthly money costs a higher rateOnly some products pay scheduled advances, and they price them at an adjustable rate above the fixed lump-sum specials. Monthly advances still usually win, because interest only runs on what you've taken. Products compared.

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.

Taking $120,000 up front leaves $378,849 owed at 90; monthly advances leave $300,046.

Owed by ageBalance under each way of taking the money.$0$125K$250K$375K$500K72747678808284868890
Show the numbers
Owed by age
All up frontMonthly advancesMix
72$120K$0$20K
73$128K$12K$32K
74$136K$26K$44K
75$145K$40K$57K
76$155K$55K$72K
77$165K$71K$87K
78$176K$89K$103K
79$188K$108K$121K
80$200K$128K$140K
81$213K$149K$160K
82$227K$173K$182K
83$242K$185K$194K
84$258K$198K$208K
85$275K$212K$223K
86$293K$228K$238K
87$313K$244K$255K
88$333K$261K$273K
89$355K$280K$293K
90$379K$300K$313K
Assumptions & sources

Assumptions

  • Up-front money at the lump-sum rate and monthly advances at the scheduled-advance rate, each compounding semi-annually; adjustable rates are held flat.
  • All three ways give you the same total over the same years. After the last advance, balances keep growing to age 90.
  • Money taken up front but not yet spent could earn interest elsewhere; at today's savings rates that rarely matches the loan rate.

Sources

  1. HomeEquity Bank — CHIP Reverse Mortgage rates (special rates as of October 29, 2026) (effective October 29, 2026). Checked .
  2. EQ Bank (Equitable Bank) — Reverse mortgage advances. Checked .
  3. EQ Bank (Equitable Bank) — Reverse mortgage comparison and rates (prime 4.70% as of October 29, 2026) (effective October 29, 2026). Checked .
  4. HomeEquity Bank — Income Advantage rates and closing cost. Checked .
  5. Financial Consumer Agency of Canada — Reverse mortgages (effective October 15, 2025). Checked .

How this tool works

All three options give you the same total over the same number of years. The up-front option starts compounding on the whole amount on day one; monthly advances add money gradually, so less interest builds. The mix takes part now and the rest monthly. After the last advance, the balances keep compounding to age 90 so you can see the difference your estate would feel.

Lenders handle advances differently. HomeEquity Bank's Income Advantage requires scheduled advances (at least $1,000 a month or $3,000 a quarter after a $20,000 start). EQ Bank's Flex offers scheduled advances from $500 a month on an adjustable rate, with no fee, and $50 for each extra lump sum. See products compared.

Mitey the yeti looks down at two options side by side.
Mitey sets a pile of cash beside a monthly cheque and compares the interest.
$60,000 over 5 years
$60,000 over 5 years: inputs, steps and result
Up front6.49%CHIP
Monthly$1,000 at 7.04%EQ Flex
Owed after 15 years, all up front$156,395
Owed after 15 years, monthly$142,780
Less owed by drawing monthly$13,614

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 it cheaper to take reverse-mortgage money monthly?

Usually yes, because interest is charged only on what you've drawn. The trade-off: scheduled-advance options may require a variable rate, and lenders set minimums and sometimes fees per advance.

What does the FCAC say about lump sums?

The Financial Consumer Agency of Canada says a lump sum you don't use right away may be an expensive way to borrow money, and that taking money in parts may bring fees and rate changes.

Primary sources

  1. Financial Consumer Agency of Canada — Reverse mortgages (effective October 15, 2025). Checked .
  2. HomeEquity Bank — Income Advantage rates and closing cost. Checked .
  3. HomeEquity Bank — CHIP products: CHIP, Income Advantage, CHIP Max, CHIP Open. Checked .
  4. EQ Bank (Equitable Bank) — Reverse mortgage advances. Checked .
Products and ratesHow each lender pays advances.Open →Balance by ageThe cost of a single advance over time.Open →Compare your optionsMonthly income from a reverse mortgage vs downsizing.Open →