The no-negative-equity guarantee: what it covers and what voids it
Canadian reverse-mortgage lenders promise you or your estate won't owe more than the home's fair market value when it's sold, as long as you kept the loan terms: property tax, insurance and upkeep. Fees and interest after the due date are excluded, and breaking the terms can void it.
Figures as of November 1, 2026.HomeEquity Bank, EQ Bank and Bloom all promise that, if you keep the loan terms, the amount you or your estate repay won't exceed the home's fair market value, even if the balance has grown past it. The conditions are the same in substance: pay property taxes, keep the home insured and maintained, and meet the mortgage obligations. The guarantees exclude interest and costs after the due date.
What each lender promises
| Lender | Promise | Conditions and exclusions |
|---|---|---|
| HomeEquity Bank | The amount repaid on the due date will not exceed the home's fair market value. | Mortgage obligations met, including property taxes, maintenance and insurance. Excludes administrative expenses and interest after the due date. |
| EQ Bank | You'll never owe more than the home's fair market value. | Taxes and insurance paid and current, property maintained, all obligations current. Excludes fees and interest after the due date. |
| Bloom | "Home Equity Guarantee": you'll never owe more than the home's fair value; Bloom covers any shortfall. | Keep up with property tax, maintenance and insurance. |
When it would matter
Only when the balance outgrows the home: borrowing young, high rates, flat or falling prices, a long life. For example, a 62-year-old who borrows $110,000 on a $400,000 home at 7.5% (renewing at 8%), with no price growth, would see the balance pass the home's value at about age 78. Lenders size loans to make this rare, which is why the maximum is lower for younger borrowers.
What can void it
- Unpaid property taxes.
- Lapsed home insurance.
- Letting the home fall into disrepair.
- Other defaults (HomeEquity Bank lists unpaid condo fees and bankruptcy as default causes).
- Delays after the due date: interest and costs after that date aren't covered.
What it doesn't do
It doesn't guarantee your heirs anything, cap the interest you're charged, or cover a sale below market value. It doesn't apply to a HELOC: if a HELOC balance plus selling costs exceeds the sale price, you owe the difference.
What does it look like year by year?
| Age | Owed | Home after selling costs | Estate keeps |
|---|---|---|---|
| 70 | $206,742 | $380,000 | $173,258 |
| 80 | $452,997 | $380,000 | $0 |
| 85 | $670,546 | $380,000 | $0 |
| 90 | $992,572 | $380,000 | $0 |
| 95 | $1,469,249 | $380,000 | $0 |
What voids the guarantee?
- Not paying property tax or home insurance.
- Letting the home fall into disrepair.
- Not living in it as your principal residence (HomeEquity Bank: at least 6 months a year).
- Interest and costs after the due date aren't covered.
How likely is the balance to pass the home's value?
It takes a long time, high rates and flat prices together. In the example, a 62-year-old borrowing over a quarter of a home that never rises in value, at 7.5% then 8%, reaches that point only late in life. With 3% yearly price growth and today's rates, most households in our comparison never get there by 95. Lenders set their maximums so it's rare, which is one reason younger borrowers get less.
What do your heirs see if it happens?
The home is sold, the lender takes the proceeds after selling costs, and the estate owes nothing more, provided the terms were kept. If the estate wants to keep the home, it has to repay the lender according to the contract; ask your lawyer what that means for your loan.
| Home | $400,000no price growth |
|---|---|
| Borrowed at 62 | $110,0007.5%, then 8% |
| Owed at 85 | $670,546 |
| Balance passes the home's value at | about 78 |
| Estate owes beyond the sale | $0the guarantee covers the gap |
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
The guarantee protects your heirs from a shortfall, not your equity: it means the estate gets nothing once the balance passes the home's value. Keep paying property tax and insurance, and keep the home in good repair.
Frequently asked questions
Can I owe more than my house is worth with a reverse mortgage?
The balance can exceed the home's value, but under the lenders' guarantees you won't have to repay more than its fair market value when it's sold, as long as the terms were kept.
Who decides fair market value?
EQ Bank says a certified home appraiser establishes it. In practice a sale at market price after proper listing sets it.
Primary sources
- 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 .
- EQ Bank (Equitable Bank) — EQ Bank Reverse Mortgage. Checked .
- EQ Bank (Equitable Bank) — Reverse mortgage FAQ. Checked .
- Bloom Finance Company — FAQs. Checked .