Reverse Mortgages Surge in Canada – 35% Increase over 2016

 

HomEquity Bank, the lone Canadian reverse mortgage lender, has logged a record of new reverse mortgages this year and thus validating rumblings about the anticipated surge in home equity loans.

HomEquity Bank is offering reverse mortgages to Canadians age 55 and older. This year HomEquity Bank is reporting a record of $60 million new reverse mortgages by May of 2017 with a strong target to clip the $100 million mark by the end of the year.

“Canadian seniors are releasing the equity they have built in their homes, transforming it from passive to active,” HomEquity president and CEO Steven Ranson stated recently. “We have seen a shift in mindset: There is a broader understanding of home equity loans. Home equity is often the largest single asset for Canadians, and it is easily unlocked with the help of mortgage experts.”

Many others have pointed to the same fact of Canada’s aging population in parallel with exorbitant growth of real-estate values as a potential source for reverse mortgages demand. For the first time in the nation’s history, adults older than 65 outranked children younger than 15 last year, according to the most recent Canadian census. And as in the United States, Canadian homeowners control a significant amount of home equity – but, unlike their American counterparts, they did not see values fall as precipitously during the Great Recession of 2008.

HomEquity Bank’s reverse mortgage offering is an entirely private program, without the backing of the Canadian government. There is also no claw-back by the Canadian government for any proceeds of such a mortgage. Seniors’ pension claims will not change by receiving funds from a reverse mortgage.

HomEquity Bank’s novel marketing angle is positioning Canadians 55 and older as “the bank of Mom and Dad”, thus spending their retirement cash to put their children through school or to buy homes of their own, thus leaving home equity by means of as their single biggest option for retirement.