Canada’s largest provider of reverse mortgages, HomeEquity Bank, plans to launch a new product called HEB Advantage at the end of October, targeting homeowners aged 55 to 70 who want to borrow more against the value of their homes than traditional reverse mortgages allow. The product offers a hybrid loan structure that enables borrowers to access up to 59 percent of their home’s value as a lump sum.
Unlike conventional reverse mortgages, which limit borrowing based on age and property value, HEB Advantage permits borrowers to pay monthly interest on a portion of the loan for the first 10 years, after which no further payments are required. This structure is designed to meet the needs of near-retirees, gig economy workers, self-employed individuals, and semi-retirees who are “house-rich but cash-flow poor,” according to HomeEquity Bank CEO Yousry Bissada.
Currently, the primary alternative to HEB Advantage for those seeking to unlock home equity is a prime home equity line of credit (HELOC), provided the borrower qualifies. However, HEB Advantage aims at those who either cannot meet HELOC qualifying criteria or prefer lower monthly payments, as it offers a borrowing limit substantially higher than standard reverse mortgages. As an example, a 60-year-old homeowner with a property valued at $835,000 might access $470,000 through HEB Advantage—about 35 percent more than what a regular reverse mortgage would permit.
The increased borrowing capacity comes with higher costs. Interest rates on HEB Advantage loans are approximately 0.60 percentage points above fixed-rate standard CHIP loans and 0.25 points higher on variable rates. For instance, a 7.29 percent fixed rate over three years results in a monthly payment of $1,426, which sounds competitive compared to equivalent HELOC rates. However, only half of that monthly payment covers interest; the rest accrues and compounds over time, potentially increasing the loan balance significantly.
Over a decade, if interest rates remain stable, the initial $470,000 loan could grow to approximately $712,000 due to compounding unpaid interest. By contrast, a HELOC borrower paying all monthly interest would still owe the original principal amount. Despite this accumulation, HEB Advantage may be preferred over costly alternatives used by some borrowers, such as supplementing a regular reverse mortgage with a private second mortgage that carries higher interest rates, fees, and significant administrative burdens.
The introduction of HEB Advantage comes amid declining household savings in Canada, with the national saving rate falling to 3.7 percent in the second quarter of 2026—below the historical average. Many Canadians are reportedly finding it increasingly challenging to save adequately for retirement, often relying on home equity as a fallback resource.
Experts note that while prime HELOCs remain the most cost-effective option for those who qualify, HEB Advantage offers a viable choice for individuals who cannot qualify for traditional credit or prefer more manageable initial payments. The product represents a trade-off between accessing greater immediate funds and the long-term growth of debt, potentially reducing the size of inheritances.
Financial advisors emphasize that borrowers should carefully consider their ability to manage the compounding loan amounts and seek professional guidance to assess the suitability of reverse mortgages or HELOCs based on individual circumstances.