Similar to conventional mortgages, reverse mortgages rates can be fixed or variable. Fixed rates are guaranteed for the entire term of your mortgage. Risk-averse borrowers would normally choose a fixed rate.  A variable rate may be lower than a fixed rate, at least initially. It can, however, rise or fall, depending on the Bank of Canada’s prime rate.  Conventional mortgages typically have an agreed-upon interest rate and regular mortgage payment requirements, which usually include amounts for both the principal and interest.   Reverse mortgage interest, however, works a little differently because borrowers don’t have to make regular mortgage payments. This is a key reason for the reverse mortgage’s popularity: it allows you to access your home equity without it having a negative impact on your retirement income.   Just like on a conventional fixed-rate mortgage, interest accumulates and compounds semi-annually. This means that, after six months, the interest that has built up is added to the total amount owed, and interest is then charged on that cumulative amount.  A reverse mortgage allows retirees to cash in up to 55% of the appraised value of their home and spend the money to enable them to have a more comfortable retirement. And, because they don’t need to have income to qualify, or make any regular mortgage payments, they get to have a more financially stress-free retirement.