Protected HELOC® vs Reverse Mortgage in Canada: The Clear Differences for Canadians 60+
Many Canadians age 60+ are looking for ways to access their home equity without selling their home. Rising costs, longer retirements, and the desire to help family sooner all make cashflow important.
The two most common options are reverse mortgages and the Protected HELOC®. At first glance, they seem similar — both let you unlock tax-free equity from your home while continuing to own it. But the details matter. This guide explains the key differences so you can make an informed choice.
What Is a Reverse Mortgage?
A reverse mortgage is a loan secured against your home that does not require regular payments. Instead, interest accrues and is added to the balance over time. This increases what you owe until the home is sold or the loan is repaid.
Key points about reverse mortgages in Canada:
Available to homeowners age 55+
Payments are allowed but not encouraged — most people roll up interest
Not readvanceable: once you borrow, the balance only grows
Approved limit is not contractually protected — future lending rules, property values, or lender policies may limit access to additional funds
No-negative-equity guarantee: you’ll never owe more than your home’s fair market value
Balance is repaid when you sell, move, or pass away
What Is the Protected HELOC®?
The Protected HELOC® is a special type of mortgage designed for Canadians 60+. It combines the flexibility of a line of credit with the security of contractual guarantees.
Key features include:
Optional payments — make full interest payments, partial payments, or no payments at all. Start and stop at any time.
Readvanceable — if you pay down part of the balance, your approved limit refreshes.
Borrowing limit is contractually protected for life as long as obligations are met (taxes, insurance, upkeep). If you qualify for $300,000 but only draw $100,000 today, the remaining $200,000 stays available whenever you need it.
Fixed-rate lock-ins available at best available rates, up to 5 years.
Non-recourse, no-negative-equity guarantee.
Flexible withdrawals: lump sum, staged draws, or scheduled monthly income (e.g., $2,000/month).
Flexibility in How You Receive Funds
Both reverse mortgages and the Protected HELOC® allow you to choose how to access your funds:
All at once (lump sum)
Some now, some later (draws on demand)
As scheduled monthly payments (e.g., $2,000/month)
The difference is in cost and control:
Reverse mortgages usually pay monthly advances at a variable rate (Prime +2% or more).
Protected HELOC® can provide scheduled monthly advances at fixed rates, giving predictability and lower costs.
Frequently Asked Questions
Does the Protected HELOC® affect my CPP, OAS, or GIS?
No. All withdrawals are tax-free and not counted as income, so government benefits are not reduced.
Can I lose ownership of my home?
No. With both reverse mortgages and the Protected HELOC®, you remain on title. With the Protected HELOC®, you also keep more control over your borrowing limit and equity.
Is my borrowing limit guaranteed?
With a reverse mortgage, the approved amount is not contractually protected. If lending rules or property values change, you may not be able to access additional funds later. With the Protected HELOC®, your approved limit is guaranteed for life by contract, provided you meet obligations like property taxes, insurance, and upkeep.
What happens if my home value drops?
The no-negative-equity guarantee ensures you or your estate never owe more than the fair market value of the home at sale.
How fast can I access funds with the Protected HELOC®?
Pre-approval form takes 90 seconds, you receive an answer in 24 hours, and funds are typically available in 21 days.
Next Step
Download the free Protected HELOC® Guide to learn more. It explains how Canadians 60+ are using this option to:
Cover living expenses
Support family with education or first-home down payments
Avoid selling investments or triggering tax events
Renovate and age in place
