Reverse Mortgage vs. HELOC: What's the Difference?
March 10, 2026 · 4 min read
If you're a homeowner looking to access your equity, you've likely heard of both reverse mortgages and home equity lines of credit (HELOCs). Both use your home as collateral. But the similarities end there.
Monthly Payments
HELOC: You must make monthly interest payments from day one. If you borrow $100,000, you'll owe monthly payments immediately — and the bank can increase your rate or reduce your credit limit at any time.
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Reverse Mortgage: No monthly payments. Ever. Interest accrues on the borrowed amount, but nothing is due until you sell, move, or pass away.
Income Requirements
HELOC: You must prove sufficient income to qualify and to make ongoing payments. Many retirees are declined because their retirement income doesn't meet the bank's requirements.
Reverse Mortgage: No income qualification. Approval is based on your age, home value, and location — not your income. You've already earned your equity.
Risk of Losing Access
HELOC: Banks can reduce or freeze your HELOC at any time. This happened to thousands of Canadians during economic downturns. You may have a $200,000 limit today and a $50,000 limit tomorrow — with no notice.
Reverse Mortgage: Once approved, your funds are yours. The lender cannot reduce the amount, call the loan, or change the terms. Stability when you need it most.
Which Is Right for You?
If you're under 55, working, and have strong income, a HELOC may work well. If you're 55 or older, retired or approaching retirement, and want predictability without monthly payments, a reverse mortgage is often the better fit.
The best way to know? Talk to someone who understands both options and can show you the real numbers for your situation.