Retirement should be a time of leisure. But for many Canadians approaching this chapter of their lives, the current landscape of rising costs, unexpected expenses, and lingering debts can make stress-free living feel out of reach.
While we all hope to enter retirement with a sense of financial stability, debt has become the norm for many North Americans. Whether it’s car loans, mortgages, or credit card debt, most people have a balance they’re trying to pay down. This is stressful in its own right, but being on a fixed income—or approaching retirement— while carrying debt can feel even worse. A debt consolidation plan can be a powerful way to make your stress-free retirement a reality.
Did you know? 28% of unretired Canadians (aged 55 to 64) expect to keep working in retirement to support themselves, and 39% have less than $5,000 saved?3 According to Statistics Canada, the average 55–64-year-old owes approximately $80,000 in debt.2 With global debt hitting an all-time high in 2024 at $318 trillion4, cash flow after fixed expenses is a cause for concern.
A reverse mortgage is one powerful solution that can clear multiple debts at once, without any monthly payment requirements. More Canadians than ever are turning to reverse mortgages as a flexible way to enjoy a more comfortable
retirement.
Average debt by age group in Canada
| Age | Amount of Debt |
| <35 | $69,500 |
| 35-44 | $105,100 |
| 45-54 | $130,000 |
| 55-64 | $80,600 |
| 65+ | $49,900 |
Note: The total debt measured included: mortgage debt, lines of credit, credit card debt, student loans, vehicle loans and other debt (doesn’t fit in a category).
Source: https://www.sunlife.ca/en/tools-and-resources/money-and-finances/managing-your-money/what-s-the-average-debt-in-canada-and-how-do-you-compare-/
What is debt consolidation?
Debt consolidation means combining multiple debts—like credit cards, car payments, mortgage payments, etc. —into one more easily managed payment.
While there are other options available to help with debt consolidation, it’s important to determine the right solution for you. For Canadians aged 55+, a reverse mortgage can be an appropriate consolidation solution, as it eliminates monthly payments, which improves cashflow for retirees on a fixed income. Check out our article comparing a reverse mortgage to a HELOC.
Retirement-age Canadians often run into the challenge of not meeting the basic requirements for ordinary loan approvals. While requirements may vary, most lenders require high income and high credit scores before lending out funds to ensure minimum payments can be met.
This is where a reverse mortgage can help.
In many cases, all your hard-earned wealth is tied up in equity. Now what do you do if you don’t want to sell your home, but you don’t have any other resources to rely on?
If you’re a Canadian over the age of 55, an Equitable Bank Reverse Mortgage may be the solution for you, especially if you’re looking to consolidate your debt and free up monthly cash flow while being able to stay in your home.
So what is a reverse mortgage, anyway?
An Equitable Bank Reverse Mortgage is a monthly-payment-free credit solution or loan that allows homeowners to access up to 59% of their home’s equity in the form of usable, tax-free* cash—without selling their home. Unlike traditional mortgages, there are no monthly payments to worry about, making it a practical option for retirees on a fixed income. The funds you receive are tax-free* and can be taken either as a lump sum or in regular advances. That means you can pay your debt using these tax-free advances without worrying about another high monthly payment. Your obligations are that you maintain the property, pay your property taxes, and keep your homeowners’ insurance current.
A reverse mortgage offers a level of security and flexibility other debt consolidations lack. For example, the balance is only due in the event that you sell, transfer, move to a senior home, pass away or default, subject to certain conditions. What’s left over is yours—or your heirs—to keep.
According to Statistics Canada, only 37.5% of paid workers are covered by a registered pension1. Those without one tend to feel less prepared for retirement. But once again, a reverse mortgage can save the day. Supplementing your retirement income with regular advances, tax-free*, can help you feel more secure. Plus, these advances do not impact your existing federal retirement benefits.
You can learn more about how a reverse mortgage works.
What are the benefits of using a reverse mortgage to help with debt consolidation?
Pay off your existing mortgage and high-interest debt using the equity you’ve worked so hard to build. Replace high or multiple payments with one low, stable solution.
Reduce monthly stress by eliminating existing mortgage payments. By making monthly payments optional, rather than mandatory, you gain the mental and emotional relief you deserve.
Protect your retirement savings by using the equity you’ve already built in your home using a reverse mortgage, rather than tapping into your investments, which could also trigger tax implications*.
Flexible options allow you to choose how you receive your funds—whether you prefer a larger lump sum or monthly installments, you can determine what works best for you.
Stay in the home you love. With a reverse mortgage, your home remains 100% yours**, giving you the peace of mind that your home stays yours while you pay off any outstanding debt. Once their debts are cleared, many reverse mortgage Internal holders have money left over to put toward enjoying retirement the way they hoped.
To read more about how a reverse mortgage could benefit you, visit our blog post on reverse mortgage pros and cons.
Want to find out if you qualify for a reverse mortgage?
It’s simple. You may qualify if you:
- Are a homeowner aged 55 or older
- Live in an eligible city or large town in British Columbia, Alberta, Ontario, or Quebec
- Live in your principal residence for at least six months per year
- Are the title holder of the residence
How much equity can I access from my home?
At Equitable Bank, you may be able to access up to 59% of your home’s value. Try our free, easy-to-use calculator to determine how much cash you may qualify for— with no obligation. From there, you can reach out to our team for more support.
As a Canadian homeowner, your hard-earned home equity in your home is likely your greatest financial asset. It’s simply a smart financial strategy to tap into it, so you can enjoy a worry-free retirement.
An Equitable Bank reverse mortgage can be a beneficial debt consolidation tool to the financial freedom and peace of mind you deserve.
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