Stay Near Grandchildren: Reverse Mortgage Options

The house where your grandchildren learned to walk, where holidays happen, where they run straight to "their" bedroom when they visit — that house is worth more than its appraised value. For thousands of Ontario grandparents, the pressure to downsize and "unlock equity" means moving away from the family network they spent decades building. A reverse mortgage offers an alternative: stay in your home, stay in your neighbourhood, and stay close to the grandchildren who need you as much as you need them. This article makes both the emotional and financial case for aging in place near family — and shows exactly how the numbers compare to downsizing and moving.

This article is for educational purposes only and does not constitute financial advice.

The decision between downsizing and staying is never purely financial. But understanding the full financial picture — including the economic value of grandparent proximity — can clarify a decision that feels impossibly complicated.

The Real Cost of Moving Away from Family

When financial advisors recommend downsizing, they typically calculate the equity freed up by selling a large home and buying something smaller. What they rarely calculate is what you lose.

What Downsizing Gains	What Downsizing Loses
Cash from equity difference	Proximity to grandchildren
Lower property taxes (maybe)	Established community and friendships
Smaller maintenance burden	The family gathering place
Perceived simplicity	Informal childcare arrangement
	Healthcare providers who know you
	Neighbourhood familiarity (walkability, routines)
	Emotional stability of home continuity

According to Statistics Canada, nearly 40% of Canadian grandparents who live within 30 minutes of their grandchildren provide regular childcare. When grandparents move farther away, this informal support network collapses — affecting both generations.

The financial value of that lost childcare alone is significant, as we will quantify below.

The Economic Value of Grandparent Proximity

Grandparent childcare is not just emotionally valuable — it has a measurable dollar equivalent. In Ontario, the average cost of childcare varies by age and region:

Childcare Type	Average Annual Cost in Ontario (2026)	Grandparent Equivalent Value
Infant daycare (full-time)	$12,000–$22,000	Same, if grandparent provides care
Toddler daycare (full-time)	$10,000–$18,000	Same
Before/after school care	$5,000–$9,000	Same
Summer camp / vacation care	$2,000–$5,000	Same
Occasional/emergency babysitting	$2,000–$4,000/year	Same
Total for one grandchild	$15,000–$25,000/year	$15,000–$25,000/year

Even if a grandparent provides only part-time care — two or three days per week, or after-school pickup — the economic value easily reaches $15,000–$20,000 per year per grandchild. Over a decade, that is $150,000–$200,000 in family economic value that is lost when the grandparent moves away.

"Informal childcare by grandparents represents a significant contribution to the Canadian economy, estimated at billions of dollars annually in unpaid labour." — Vanier Institute of the Family

This economic contribution is real money that your adult children would otherwise need to spend on paid childcare. By staying near your grandchildren, you are providing a financial gift to your family that rivals or exceeds the inheritance they might receive from the equity you "freed up" by downsizing.

Rick Sekhon Reverse Mortgages helps Ontario families quantify this value as part of the reverse mortgage decision process, because the numbers often change the conversation entirely.

Downsizing Regret: What the Data Shows

The assumption that downsizing leads to a simpler, happier life is not always supported by evidence.

A 2024 survey by Royal LePage found that nearly 30% of Canadian seniors who downsized reported regret within two years. The most common reasons:

• ✗ Missing the old neighbourhood and neighbours
• ✗ The new home felt unfamiliar and isolating
• ✗ Loss of regular contact with grandchildren
• ✗ Underestimating the emotional cost of leaving a long-time home
• ✗ The financial benefit was smaller than expected after transaction costs
• ✗ New community lacked walkable amenities and services

The financial reality of downsizing is also less rosy than it appears:

Downsizing Cost	Typical Amount
Real estate commission (sell)	4–5% of sale price
Legal fees (sell + buy)	$3,000–$5,000
Land transfer tax (buy)	1–2% of purchase price
Moving costs	$3,000–$8,000
Renovations to new home	$5,000–$30,000
Furniture replacement	$2,000–$10,000
Temporary housing (if needed)	$3,000–$6,000
Total transaction costs	$30,000–$80,000+

On an $800,000 home, selling costs alone (commission + legal) consume $35,000–$45,000. If you buy a $500,000 condo, the land transfer tax adds another $6,500. Before you have unpacked a single box, you have spent $50,000–$70,000 — money that is gone permanently.

Worked Example: Downsizing vs Staying with a Reverse Mortgage

Let's compare two paths for a 68-year-old Ontario couple with an $800,000 home, no mortgage, who need $150,000 in additional retirement funds.

Path A: Downsize and Move

Item	Amount
Sell home	$800,000
Less: real estate commission (4.5%)	-$36,000
Less: legal fees	-$3,500
Net sale proceeds	$760,500
Purchase condo	-$500,000
Less: land transfer tax	-$6,500
Less: legal fees (buy)	-$2,000
Less: moving costs	-$5,000
Less: condo setup/renovations	-$10,000
Cash remaining	$237,000
Monthly condo fees	$650/month ($7,800/year)
Lost childcare value (2 grandchildren nearby)	$30,000/year equivalent
Distance from grandchildren	Increased

After 10 years, accounting for $7,800/year in condo fees (increasing 3% annually), the couple has spent approximately $89,000 on condo fees alone. Net position: the $237,000 invested at 4% grew to roughly $351,000, minus $89,000 in condo fees = $262,000 in financial assets, plus a $500,000 condo (appreciated to ~$672,000) = $934,000 total net worth.

Path B: Stay with Reverse Mortgage

Item	Amount
Home value	$800,000
Reverse mortgage advance	$150,000
Setup costs (appraisal, legal, admin)	~$3,000
Net cash received	$147,000
Monthly condo fees	$0
Proximity to grandchildren	Unchanged
Childcare value preserved	$30,000/year equivalent

After 10 years at 6.74% interest, the reverse mortgage balance grows to approximately $285,000. The home, appreciating at 3% annually, is worth approximately $1,075,000. Net equity: $790,000. Plus the $147,000 received (if invested at 4%, now ~$218,000) = $1,008,000 total net worth.

Metric	Downsize (Path A)	Stay with RM (Path B)	Difference
Total net worth after 10 years	$934,000	$1,008,000	+$74,000 (RM wins)
Transaction costs	~$63,000	~$3,000	-$60,000 saved
Annual condo fees paid	$89,000 over 10 years	$0	-$89,000 saved
Childcare value preserved	Lost	$300,000 over 10 years	+$300,000 family value
Grandchild proximity	Reduced	Maintained	Priceless

The reverse mortgage path produces a higher net worth and preserves the family proximity. The downsizing path loses $63,000 in transaction costs, pays $89,000 in condo fees, and sacrifices the grandparent-grandchild relationship.

Using a Reverse Mortgage to Fund Home Modifications for Grandchild Visits

Many grandparents use part of their reverse mortgage to make the home more functional for multi-generational visits and care:

Accessibility modifications that serve both grandparents and young grandchildren:

• Main-floor bedroom conversion: $8,000–$15,000
• Accessible bathroom (walk-in shower, grab bars): $10,000–$25,000
• Widened doorways: $1,500–$3,000 per doorway
• Non-slip flooring throughout: $5,000–$12,000

Grandchild-friendly additions:

• Dedicated grandchild bedroom: $5,000–$10,000 (furnishing an existing room) to $40,000–$80,000 (building an addition)
• Fenced backyard play area: $3,000–$8,000
• Finished basement family space: $20,000–$50,000

These modifications serve double duty: they make the home safer for aging in place and more welcoming for the grandchildren whose visits keep life meaningful. Read our home modifications guide for detailed planning advice.

HomeEquity Bank (CHIP), Equitable Bank, Bloom Financial, and Home Trust all allow reverse mortgage funds to be used for home renovations without restriction. There is no requirement to justify how you spend the money.

The Family Proximity Premium

Financial planners talk about the "equity premium" of stocks over bonds. There should be an equivalent concept for family proximity — call it the "family proximity premium."

This premium includes:

• Grandchildren who know their grandparents deeply, not superficially
• Emergency availability (picking up a sick grandchild from school)
• Shared meals, homework help, and daily interaction
• Reduced social isolation for grandparents (a significant health factor)
• Preserved holiday traditions and family routines
• The ability to watch grandchildren grow up in real time, not through video calls

According to a 2023 study published in JAMA Internal Medicine, older adults who provide regular childcare for grandchildren have a 37% lower mortality risk compared to those who do not. The health benefits of active grandparenting are measurable and significant.

Having the family conversation about a reverse mortgage — where you explain that staying close is worth more than maximizing the inheritance — often brings families closer rather than creating conflict. Most adult children would rather have a present, engaged grandparent for their kids than a larger inheritance in 20 years.

Rick Sekhon helps facilitate these family discussions, providing the financial data that supports the emotional decision many families want to make but feel they cannot afford. The FSRAO requires transparency in all mortgage transactions, and Rick ensures every family member who wants to be involved has access to the numbers.

For families considering a living legacy approach — giving financial help to children and grandchildren now rather than waiting — a reverse mortgage can fund both the grandparent's aging in place and meaningful gifts to the next generation. See our guide on funding a grandchild's wedding for one example.

Get your free Ontario Reverse Mortgage Guide →

Frequently Asked Questions

Will my grandchildren's parents (my adult children) resent the reverse mortgage?

This is a common worry, but in practice, most adult children support the decision once they understand the numbers. When they see that staying close preserves $15,000–$20,000/year in childcare value, maintains the family gathering place, and still leaves substantial equity in the estate, the reverse mortgage often looks like the best option for everyone. Our family conversation guide provides a framework for this discussion.

Can I use reverse mortgage funds to help my grandchildren directly?

Yes. There are no restrictions on how you use reverse mortgage funds. Some grandparents contribute to RESPs, help with first home down payments, fund extracurricular activities, or simply cover the cost of hosting regular family dinners. The funds are tax-free and do not affect your OAS, CPP, or GIS benefits.

What if I need to move to a care facility eventually?

If you permanently leave your home, the reverse mortgage becomes due and is typically repaid by selling the home. However, "permanently" is the key word. If you enter a care facility temporarily (for rehabilitation, for example), you can return home and the mortgage continues unchanged. If both spouses are on the mortgage, the loan continues as long as one spouse remains in the home. Planning for this possibility is part of the retirement cash flow strategy.

How does a reverse mortgage affect my ability to leave the home to my children?

Your home still passes to your estate and heirs. The reverse mortgage balance is repaid from the home's value at the time of sale, and the remaining equity goes to your beneficiaries. With Ontario home appreciation, most families find that substantial equity remains even after 15–20 years of a reverse mortgage. The no-negative-equity guarantee from HomeEquity Bank and Equitable Bank ensures the debt never exceeds the home value.

Can I still host family gatherings and have grandchildren stay overnight?

Absolutely. You are the full owner of your home. A reverse mortgage changes nothing about how you use your property. You can host as many people as you like, as often as you like. You can have grandchildren stay overnight, host holidays, and use every room exactly as you always have. The lender has no say in how you live in your home.

What if my neighbourhood changes and my children move away?

This is a valid consideration. If your adult children relocate and the proximity advantage disappears, you can reassess. A reverse mortgage can be repaid at any time by selling the home (with potential prepayment charges in early years). The flexibility to stay or sell remains yours throughout. Rick Sekhon Reverse Mortgages can help you evaluate whether the reverse mortgage still makes sense if your family circumstances change.