What a reverse mortgage means for your estate and heirs
When the last borrower dies, the reverse mortgage is repaid from the home's sale or by the heirs: HomeEquity Bank allows 180 days, Bloom 6 months. Heirs keep whatever is left after the balance; the no-negative-equity guarantee means they never owe more than the home's value.
Figures as of November 1, 2026.When the last borrower dies, the reverse mortgage becomes due. HomeEquity Bank gives the estate 180 days to repay and Bloom gives 6 months. Usually the home is sold, the lender is repaid, and your heirs receive the rest. If the balance has grown past the home's value, the no-negative-equity guarantee means the estate doesn't pay the difference, as long as the loan terms were kept. Heirs can't take over the loan.
What happens, step by step
- The last borrower dies. If two spouses were both borrowers, nothing happens at the first death; the survivor continues.
- The executor tells the lender and asks for a payout statement: principal, interest to date, fees, any prepayment charge (HomeEquity Bank has said there is none on death; confirm in the contract).
- The estate repays within the window, usually from the sale of the home.
- Heirs receive what's left after the loan, the selling costs and the discharge fee.
How much your heirs keep
It depends on three things: how much was borrowed, how long ago, and what happened to the home's value. A 72-year-old borrows $120,000 (plus about $3,070 of costs) on a $750,000 home at 6.49%, renewing at 7.09%:
| Age at death | Owed | Heirs get, 0% growth | Heirs get, 3% growth | Without the loan, 3% |
|---|---|---|---|---|
| 80 | $208,746 | $503,754 | $693,828 | $902,574 |
| 85 | $295,739 | $416,761 | $750,591 | $1,046,330 |
| 90 | $418,986 | $293,514 | $793,997 | $1,212,984 |
| 95 | $593,596 | $118,904 | $812,584 | $1,406,180 |
The gap between the last two columns is the real cost to your heirs. It grows every year. Run your own household in the comparison engine, which shows what's left at every age for each route.
Your heirs' options
- Sell the home and keep the difference. This is the usual route.
- Keep the home by repaying the loan from savings, life insurance or a new mortgage in their own names.
- Let the lender recover the debt if the home is worth less than the balance; the guarantee protects the estate if the terms were kept.
The repayment window
HomeEquity Bank: due within 180 days of the last borrower's death. Bloom: 6 months. The FCAC warns that settling an estate can take longer than the set period. Interest keeps running until repayment, and HomeEquity Bank's guarantee excludes interest and costs after the due date, so delays cost the estate.
How to prepare your family
- Tell your executor and heirs about the loan before you sign, and why.
- Keep the lender's name, loan number and contact with your will.
- Ask the lender, in writing, how long the estate has and whether extensions are possible.
- Consider whether a power of attorney is in place (HomeEquity Bank charges $1,000 to review one later).
- Revisit your will with your lawyer at the independent legal advice meeting.
How long do heirs have to repay?
| Lender | Time to repay | Heirs take over the loan? |
|---|---|---|
| HomeEquity Bank | 180 days | No |
| Bloom | 6 months | Not stated |
| EQ Bank | Not stated on its pages | Not stated |
| Home Trust | Not stated on its page | Not stated |
Can my children keep the house?
Yes, if they repay the balance: with their own money or a new mortgage in their names. In the example, keeping the home at 85 would mean repaying $295,739 on a home worth about $1,101,400.
What should you tell your family?
- Which lender and product you chose, and where the papers are.
- That the loan becomes due when the last borrower dies, and the deadline to repay.
- Roughly what will be owed at different ages: the table above is a good starting point.
- Whether anyone wants to keep the home, so they can plan the financing.
Executors often have to sell quickly to meet the deadline. A short conversation now can save the estate a rushed sale later.
| Home | $750,000 |
|---|---|
| Borrowed | $120,000CHIP lump sum at 72 |
| If the home sells at 80 | $693,828owed $208,746 |
| If the home sells at 85 | $750,591owed $295,739 |
| If the home sells at 90 | $793,997owed $418,986 |
| If the home sells at 95 | $812,584owed $593,596 |
| Left at 95 | $812,584after 5% selling costs; home grown 3% a year |
Open this example in the calculator →Computed by our engine with the lender terms and rules on the methodology page.Computed November 1, 2026.
What this means for you
Talk to your heirs before you sign: they'll handle the payout, and the deadline is short. If leaving a set amount matters, use the comparison's "leave at least" solver to find the most you can take.
See how repayment works.
Frequently asked questions
Do my children inherit the reverse mortgage debt?
No. The debt is repaid from the home (or the estate). Heirs don't become personally liable, and if the balance exceeds the home's fair market value, the no-negative-equity guarantee covers the difference, provided the loan terms were met.
Can my children keep the house?
Yes, if they repay the loan, for example by paying it off from their own money or getting their own mortgage. They can't take over the reverse mortgage itself.
How long does the estate have to repay?
HomeEquity Bank: within 180 days of the last borrower's death. Bloom: 6 months. EQ Bank's web pages don't give a number of days; ask before you sign.
Primary sources
- HomeEquity Bank — Client FAQs (repayment, estate, default). Checked .
- HomeEquity Bank — CHIP Reverse Mortgage rates (special rates as of October 29, 2026) (effective October 29, 2026). Checked .
- HomeEquity Bank — CHIP frequently asked questions. Checked .
- Bloom Finance Company — FAQs. Checked .
- EQ Bank (Equitable Bank) — Reverse mortgage FAQ. Checked .
- EQ Bank (Equitable Bank) — EQ Bank Reverse Mortgage. Checked .
- Financial Consumer Agency of Canada — Reverse mortgages (effective October 15, 2025). Checked .