If your OAS and GIS cover the basics but the rest of your monthly budget feels tight, you are not alone. In 2026, the most common ways Canadian seniors on a fixed income ease money pressure are using home equity they already have, or addressing unsecured debt they cannot pay. Each approach fits a different situation. This guide explains both and helps you identify which one applies to you.
Choose the path that fits your situation
Both paths assume you have already addressed the basics: address, banking, proof of life, income attestation, GIS renewal. If any of these are pending, the earlier guides in this series cover them. The two paths below are appropriate only when the basics are current.
Two paths, two situations
Most Canadian seniors on a fixed income fall into one of two situations. The first is they own a home with equity and want to access cash without selling or moving. The second is they have unsecured debt (credit cards, personal loans, lines of credit) that they cannot pay within 24 months. Each situation has a path that is well-established in 2026, and the paths are not exclusive; some seniors use both.
Path 1: Home equity without selling. If you own a home in Canada and are 60 or older, three options are commonly used: HELOC, refinancing the existing mortgage, or a reverse mortgage. HELOC works like a line of credit where you borrow against the equity and only pay interest on the amount used. The home is not sold and you can pay the balance at any time, but if you cannot make the payments, the home is at risk of foreclosure. Refinancing replaces your current mortgage with a new one at a higher amount and you receive the difference in cash, though the new mortgage may carry a higher rate and a longer term. A reverse mortgage is repaid when the home is sold, but the total cost is significantly higher than a traditional mortgage and the equity remaining for heirs is reduced.
Path 2: Debt relief without new loans. If you have unsecured debt and cannot pay it within 24 months, a debt settlement program is a well-established option in 2026. A licensed credit counselor negotiates with creditors and consolidates the debt into a single payment plan, usually with a reduced total amount. Settlement negotiates a reduced payoff, typically 30 to 50 percent less than the original balance. The trade-off is that the program takes 24 to 48 months and there is a temporary impact on the credit score. The key benefit is that the monthly program payment is usually lower than the combined minimum payments on the original debts.
How to choose and what to avoid
The choice depends on which problem you are trying to solve. If you have cash but the debt is unmanageable, debt settlement is the right path. If you have debt but your home has significant equity, home equity release is the right path. If both apply, most advisors recommend addressing the debt first (because high-interest debt compounds faster than home equity appreciates), then using the freed-up cash flow to plan the equity release carefully. The two free eligibility checks at the top of this page can help you identify which path applies. Each takes about 60 seconds and provides a no-commitment assessment. The most common error in 2026 is taking the first offer without comparison; both home equity and debt relief are competitive markets, so get at least two quotes and confirm the impact on OAS or GIS before signing.
Frequently asked questions
Is the equity option safe for seniors over 70?
Is debt relief a real option for seniors on a fixed income?
Will I lose my OAS or GIS if I take equity or debt relief?
How do I know which option is right for me?
Independent guide. Not affiliated with Service Canada, the Government of Canada, or any home equity or debt relief provider. All figures are estimates for 2026 and may change quarterly. The home equity and debt relief options are offered by private companies; confirm details on the official program websites before acting on any information here.
