HESA vs reverse mortgage
A reverse mortgage can reduce your remaining equity over time as interest accumulates. A HESA takes a different approach, allowing you to access your equity without taking on a growing loan balance.
The difference is in the details
A HESA and a reverse mortgage can both provide access to your home equity without monthly payments. The important differences are in how the arrangement is structured, how costs accumulate, and what happens to your equity over time.
A partnership, not a loan
HESA: A HESA is a partnership, not a loan, so there is no interest rate or accumulating interest. When the agreement ends, the amount paid to us is based on the agreed change in your home's value.
Shared outcomes
HESA: HEQ is not a lender. We invest alongside you as a partner in your home's future value, sharing in both the upside and, where applicable, the downside. Our interests are aligned with yours because our return is tied to what happens to your home's value.
Equity impact
HESA: With a HESA, what you owe at the end is tied to the amount you received and the agreed change in your home's value. There is no interest accumulating against your balance, so your existing equity is locked in from the start.
Pre-payment penalties
HESA: There are no prepayment penalties with a HESA. You can choose to exit your agreement at any time without a penalty for paying it out early.
Age and eligibility
HESA: A HESA is available to homeowners in the GTA who meet the program's eligibility requirements, regardless of age.
Works with your mortgage
Keep your existing financing
A HESA can work alongside your existing first mortgage, allowing you to keep your current financing in place while accessing additional equity.
Less cash left over
A reverse mortgage generally requires existing secured debt to be paid out, which can mean using more of the funds you receive to clear your mortgage and leaving less cash available for you.
Make an informed choice
Understand your options, then see what a HESA could look like for your situation.