This is the question families ask most. The short version: your kids do not lose the house the day a reverse mortgage funds, and they do not keep it without dealing with the loan. Here is exactly what happens.
When the loan comes due
A reverse mortgage usually comes due when the home is sold, the last borrower moves out for good (for example into long term care), the last borrower passes away, or the loan goes into default. While at least one borrower still lives in the home, it usually stays in place.
The spouse exception
If a spouse is not a borrower on the loan, it can come due when the borrowing spouse dies or moves out, even if the other spouse still lives there. Every owner on title applies together, and this is worth checking in writing before signing.
The family has a window to decide
Lenders typically allow some months for the estate to repay. One lender, for example, allows six months after the last borrower passes. Interest keeps building during that window. Some lenders waive prepayment charges at that point. Ask for the exact terms in writing.
The two options
- Sell the home. The sale repays the lender. Whatever equity is left goes to the estate, and then to the heirs under the will.
- Keep the home. The family repays the balance, for example by refinancing, by one sibling buying out the others, or with other funds.
Can the estate owe more than the house is worth?
Some lenders include a no negative equity feature. If the borrowers met their obligations, it limits what the estate owes to the home's fair market value when the loan comes due. Conditions differ by lender, and some fees and interest after the due date may not be covered.
A checklist for the executor
- Find the loan papers and contact the lender to report the passing.
- Ask for a payout statement and the repayment deadline in writing.
- Keep property taxes and insurance paid and the home maintained while it sits empty. Ask the insurer about vacancy rules.
- Get the home valued.
- Decide as a family: sell, or keep and repay.
- If one sibling wants to keep it, work out a buyout with a lawyer.
- Pay the lender from the sale or refinance. The estate receives what is left.
- Let the estate lawyer and accountant handle the will, probate and taxes.
What is left depends on four things
How much was borrowed, how long the loan ran, the interest rate and fees, and what the home sells for at the end. A smaller loan, taken later, usually leaves more for the family.
If you are one of the adult kids reading this, our sister site livinginheritancebc.com has a free guide written for you.
Questions people ask
Do my kids have to repay the reverse mortgage?
They are not personally on the loan. The estate repays it, usually from selling the home. If the family wants to keep the home, they repay the balance.
How long does the estate have to repay?
It depends on the lender. Typically some months. One lender allows six months after the last borrower passes. Get the exact timeframe in writing.
Does interest stop when the borrower dies?
No. Interest usually keeps building until the loan is repaid, which is why acting within the window matters.
Can a surviving spouse stay in the home?
Yes, if they are a borrower on the loan. If they are not on the loan, it can come due when the borrowing spouse dies or moves out.
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
Want your own numbers?
Get a free BC Equity Report built for your home and your age. It is an estimate, not a lender quote, and there is no obligation.