If you are 55 or older, own your home in BC and want to tap your equity without selling, the two main tools are a home equity line of credit (HELOC) and a reverse mortgage. Both let you stay in your home. They work very differently, and the right one depends mostly on your income and how long you plan to stay.
The short answer
If you qualify easily for a HELOC and can comfortably make the monthly payments, a HELOC is usually cheaper. If monthly payments are the problem, or you cannot qualify on your retirement income, a reverse mortgage is often the better fit.
Side by side
| HELOC | Reverse mortgage | |
|---|---|---|
| Age requirement | None | Every owner on title 55 or older |
| How much | Typically up to 65% of your home's value as a line of credit, less any mortgage | Usually up to 55%, and based mostly on the youngest borrower's age |
| Qualifying | Income and credit, which can be harder in retirement | Focused on age, home and equity more than income |
| Monthly payments | Usually at least the interest, every month | Not required on most products |
| Rate | Usually variable, tied to prime | Typically higher than a regular mortgage, with fixed and variable options |
| Your equity | Shrinks as you draw, recovers as you repay | Shrinks as interest builds |
| Can the lender change it? | The lender can review, freeze or reduce a line of credit | Approved amounts and terms are set in your agreement |
| If one spouse passes away | The lender may review the survivor's ability to carry it | Usually stays in place while a borrower lives in the home. A spouse not on the loan is the exception |
General comparison only. Terms vary by lender and product.
When a HELOC is the smarter move
- You have solid pension or investment income and good credit.
- You need money for a short time and will pay it back, for example bridge financing or a renovation before a sale.
- You want the lowest cost and can handle interest payments every month.
When a reverse mortgage makes more sense
- Monthly payments are exactly what you are trying to get rid of.
- Your income will not qualify you for a HELOC, or you worry about qualifying later.
- You plan to stay in the home for the long term.
- You want certainty that the line will not be reduced or called because your income changed.
A HELOC that you can only afford by drawing on the HELOC to pay its own interest is a reverse mortgage in disguise, usually without the protections. If that is where you are headed, look at both side by side.
What it costs to compare properly
Do not compare rates alone. Compare total cost over the time you expect to stay, the monthly payment you will actually have to make, the fees and prepayment charges, and what happens if your income or health changes. I put both options on one page, in writing, so you can see the difference in dollars.
Questions people ask
Is a HELOC cheaper than a reverse mortgage?
Usually, yes, because HELOC rates are typically lower. But a HELOC requires monthly payments and income to qualify, so cheaper is not always better if cash flow is the problem.
Can I switch from a HELOC to a reverse mortgage later?
Often, yes. A reverse mortgage can pay out an existing HELOC, subject to approval and the amount you qualify for at that time.
Can a bank freeze my HELOC?
Lenders can review and change HELOC limits under their terms. A reverse mortgage advance that has been made does not get called because your income changed, as long as you meet your obligations.
Which one leaves more for my kids?
Usually the one that costs less overall. If you can pay the interest on a HELOC every month, more equity is likely to be left. If you cannot, the comparison changes.
About the author
Matt Blake is a licensed mortgage broker in British Columbia with BRX Mortgage Inc. He helps homeowners 55 and over, and their families, compare reverse mortgages with HELOCs, selling and downsizing, and he will tell you straight when a reverse mortgage is the wrong move.
Licence MB600487 · BRX Mortgage Inc., brokerage licence X301291 · Last reviewed October 2026
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