Reverse Mortgages in Canada are experiencing unprecedented growth, as more and more seniors across Canada are embracing the concept of using a reverse mortgage to improve their retirement lifestyle.
Once considered a niche product, reverse mortgages are truly becoming a mainstream solution in Canada. HomEquity Bank, Canada’s only provider of the CHIP reverse mortgage, reported record Q2 growth yesterday. “During the current quarter, origination volume of $59 million exceeded Q2 2009 by 160%, again setting a new all time record. Resulting from the growth in origination’s, the mortgage balance has grown by 14% to $946 million.”
Why the sudden change? Why are Canadians more open to reverse mortgages? It’s simple. CHIP is now provided by HomEquity Bank, a Schedule I Bank that is federally regulated in Canada. Interest Rates are now in line with the other banks making the CHIP reverse mortgage not only more competitive (vs. a regular mortgage), but more attractive considering it’s built in flexibility.
With a line of credit or a traditional mortgage, you have to make monthly payments. With a CHIP reverse mortgage, you can make monthly payments, but if you stop or choose not to, you will never put your home at risk. Considering the average home in Canada appreciates in value by 4 – 5% per year, not having to worry about mortgage payments is a very attractive option for anyone over the age of 60.