If you're like many people these days, you're likely feeling a financial pinch due to inflation. With the cost of many things increasing, people living on a fixed income may struggle to make ends meet. 

If you're 55 years or older and own your home, you may be eligible to apply for a reverse mortgage, which can give you access to cash that can help you withstand the effects of inflation. 

Here's what you need to know about reverse mortgages and how they can help you financially. 

What is a reverse mortgage?

A reverse mortgage is a personal loan available to homeowners age 55 and up, in which you can access up to 55% of your home's current appraised value. The cash you access is tax-free, and you don't make any regular monthly mortgage payments or pay back the loan until you either move out or sell your home. 

How can I use a reverse mortgage?

The cash you get from your reverse mortgage can be used in any way you see fit, which gives you many options to combat the increased cost of living. 

1. Pay bills

If you're on a fixed or limited income, you may struggle to make all your bill payments and cover the necessities. A reverse mortgage can give you the cash you need to meet your financial obligations without stress. 

2. Consolidate debt

Along with inflation, interest rates go up as well. You may find the interest rates on some loans astronomical - pushing you further into financial stress with minimum payments increasing. With a reverse mortgage, you can consolidate your high-interest debts into one or pay them off. Since no monthly mortgage payments are required, that frees up your cash to help pay for other expenses. 

3. Help loved ones

Your kids, grandchildren, or other family members are likely also feeling the financial pinch, and they may face expenses that can't be put off. If they need financial help in buying a home, paying for their wedding, or covering the increased cost of living, you can take out a reverse mortgage to help them. 

4. Renovate your home

Whether you urgently need an upgrade or renovations to make your home more accessible, you can use the money from a reverse mortgage to pay for the costs. Home renovations and upgrades can be pricey, but they're also necessary, especially for Canadians who want to age in place. 

5. Increase your monthly cash flow

A reverse mortgage gives you the financial flexibility to receive your funds all at once as a lump sum or distributed to you in monthly deposits. If you want the security of knowing you have money coming in each month, you can request regular deposits, so you have a steady monthly cash flow. 

The bottom line

A reverse mortgage is a sound financial solution to help provide a secure retirement while you age in place. It can help with expenses, increase cash flow, pay off high-interest debt payments, and allow you to maintain a stress-free lifestyle despite the increase in the cost of living. If you are a Canadian homeowner age 55 or older and eligible for a reverse mortgage, it can be a great way to maintain financial stability in retirement.