Who Pays Property Taxes and Insurance With a Reverse Mortgage in Ontario?

The short answer: you still pay the taxes and insurance

For an Ontario homeowner considering a reverse mortgage, this is an important distinction. No regular mortgage repayment does not mean no ongoing home expenses.

HomeEquity Bank lists paying property taxes and homeowners' insurance, maintaining the property, and meeting the mortgage obligations among its conditions. EQ Bank says its reverse mortgage borrowers must pay property taxes directly to the municipality. Your own agreement sets out the requirements for your loan.

If your old lender collected property taxes with your mortgage payment

This is the part I would slow down for. Your previous mortgage payment may have included money collected toward property taxes. When that mortgage is paid off, do not assume the payment arrangement carries over to the reverse mortgage.

Before closing, ask the old lender and your lawyer:

• What was the last property tax payment made on my behalf?
• Which bill or instalment is due next, and who will pay it?
• Is there money left in the mortgage tax account, and how will it be handled?
• When does the old lender stop collecting or paying taxes?
• Is any tax amount being paid or held back through the new mortgage closing?

Then confirm the account status with your municipality and arrange the next payment. Keep the closing paperwork and payment confirmations together. A stopped mortgage withdrawal is not proof that the next tax bill has been dealt with.

If you are still working out the old mortgage payout, see getting a reverse mortgage when you already have a mortgage.

How to arrange the property tax payments

Start with the municipality's current bill, account number, due dates, and accepted payment methods. Municipalities have their own arrangements. A payment calendar for Toronto is not automatically the calendar for Oakville, Hamilton, or Ottawa.

Toronto, for example, offers online banking payments and a preauthorized tax payment program. Its guidance says to keep paying directly until enrolment is confirmed. It also notes that supplementary or omitted tax bills are not withdrawn through that program. Check which bills your own arrangement covers.

Whether you pay manually or by automatic withdrawal, check the account after the first payment and when a new bill arrives. Confirm the correct property account and allow for processing time. Putting money aside every month helps with budgeting, but it does not change the municipality's due dates.

What if the property taxes are already overdue?

Tell the mortgage agent, proposed lender, and lawyer about the full amount, including any amounts shown as penalties or interest. An overdue bill is something to address, not something to leave out of the application.

EQ Bank says it may require a holdback when there are property tax or condominium arrears. A holdback means some money is kept back rather than released for you to spend. That does not mean every application with overdue taxes will be approved, or that every lender handles it the same way.

Ask for a written closing breakdown: what must be brought current, how it will be paid, any holdback, and how much cash you will actually receive. Confirm the plan with the municipality as well. Do not assume a mortgage application pauses a tax deadline or collection process.

If a bill becomes difficult to pay after the reverse mortgage is in place, contact the municipality and lender promptly. Ask what arrangements, if any, are available and how they fit the mortgage agreement. Do not rely on an assumed grace period.

Home insurance remains a separate responsibility

A reverse mortgage does not replace home insurance. Keep the policy required by the mortgage agreement in force, pay the premiums, and ask what proof of coverage the lender needs.

Before the new mortgage closes, ask your insurance representative how the change of lender should be recorded. Confirm the correct lender details, the effective date, and whether any policy change is needed. An insurance renewal and a mortgage renewal are different events.

The Insurance Bureau of Canada reminds consumers to keep their information accurate, pay premiums as required, and report changes in circumstances. Its examples include renovations and a business operated from the home.

If you expect a long absence, a change in who lives there, or a major renovation, describe the situation to the insurer and lender before making assumptions. Ask how it affects your coverage and mortgage obligations, and get the answer in writing. Policies differ, so there is no single number of days or checklist that fits every home.

If you are comparing premiums, compare the coverage and exclusions too. A cheaper policy is not necessarily a suitable replacement. Your insurance professional should explain the policy; your independent lawyer should explain the mortgage contract.

Build the remaining home costs into a monthly budget

Use your actual bills, not a neighbour's estimate. Include property taxes, insurance, utilities, routine upkeep, and a reserve for repairs. If you own a condominium, include the applicable condo fees and any known assessments as well.

Review the budget when taxes or insurance renew. Also ask whether you could still cover the costs if a premium rises or a repair arrives sooner than expected. Keeping ownership is valuable only if the ongoing responsibilities remain manageable.

Can reverse mortgage funds help pay these bills?

They may. FCAC lists regular bills among possible uses of reverse mortgage money. But using the loan for taxes or premiums is still borrowing, not a discount on those expenses.

Interest and fees can increase the amount owed and reduce the equity left for a later move or your estate. If you need money in stages, confirm when an advance can be made, what it costs, and what conditions apply. Do not count on an unconfirmed future advance to meet an essential payment.

The guide to lump sums and monthly advances explains why the timing matters. Compare the reverse mortgage with other realistic options, including using savings carefully, an affordable conventional loan or HELOC if you qualify, or downsizing.

Take missed payments and notices seriously

Not making regular mortgage repayments does not remove the possibility of default. Failing to meet the agreement's tax, insurance, maintenance, or other conditions may put the loan at risk.

FCAC warns that reverse mortgage default can have serious consequences, including loss of the home. The lender's contract and the legal process matter. If you receive a default, cancellation, or collection notice, seek appropriate independent advice promptly rather than assuming it can wait until the house is sold.

A clear payment plan is more useful than a vague promise that “the house will cover it.” Before choosing the mortgage, make sure you know who pays each bill, when it is due, and where that money will come from.

Sources checked for this article

• Financial Consumer Agency of Canada: Reverse mortgages, costs, and default
• HomeEquity Bank: CHIP Reverse Mortgage obligations
• EQ Bank: Property tax payments, holdbacks, and mortgage obligations
• Bloom: Responsibilities after getting a reverse mortgage
• City of Toronto: Paying your property tax bill
• Insurance Bureau of Canada: Consumer rights and responsibilities

Questions people ask about this

This article is general education for Ontario residents, current to October 19, 2026, and is not legal, tax, insurance, investment, or financial advice. Mortgage obligations, holdbacks, payment arrangements, insurance coverage, eligibility, and costs vary. Examples are illustrations, not quotes or approvals. Confirm the written terms with the lender, municipality, insurer, and appropriate independent professionals before proceeding.