Would you prefer to age in place?
Would you prefer to age in place?
During COVID, many retirement homes were strongly impacted by the virus; confinement, no visitors, and in some cases, death. This situation spurred on the desire for many seniors to stay in their own homes.
Does this explain why reserve mortgages are significantly gaining in popularity?
Short answer, yes!
Seniors are choosing to age in place as demonstrated by Equitable Bank’s reported 262% year-over-year surge in its reverse mortgage product in the first quarter of 2022, and according to the Financial Post, the stigma in Canada for this type of product is fading fast, and we are only now starting to catch-up to other countries where reverse mortgages are very well established… the UK and Australia for example.
If you are like me, and watch the CBC’s Heather Hiscox in the morning, without fail the CHIP reserve mortgage ad will undoubtedly appear… you know one, with Kurt Browning doing a flip in his ice skates.
So what is a reverse mortgage?
A reverse mortgage permits homeowners 55+, to tap into the equity in their homes. They typically function like home equity lines of credit allowing individuals to put up the equity in their home in exchange for tax-free cash. The amount is based on age, and the appraised value of the home. There are no monthly mortgage payments but homeowners remain responsible for paying the property taxes, insurance, and maintenance. The repayment of the loan is deferred until the homeowner passes away, sells or moves out of the home.
What are the pros & cons of a reverse mortgage?
Pros:
Cons:
As the population continues to age in Canada, so will the attractiveness of reverse mortgages. Is this the right product for you?
If you would like to learn more about reverse mortgages, contact Nord East Mortgages, and one of our brokers will happily take the time to explain what options are available to you.
Martin Spalding
Mortgage Broker
(514) 206-0488