29 March 2019

Although interest rates are slightly higher for this product, reverse mortgages are becoming more and more popular. The recent report by Better Dwelling says the annual pace of reverse mortgage credit growth is ten times higher than of a conventional mortgage debt.

Better Dwelling points to OSFI’s results, showing the outstanding balance of reverse mortgage debt reached $3.51 billion in January. While it’s 0.82% lower than in December, it’s still 30.44% higher than a year earlier. The number almost tripled during the previous five years.

“The balance of reverse mortgage debt remains relatively small but its growth pace is significant,” – noted Better Dwelling. “Even at the lower annual pace of growth, seniors will increase it by one more billion by the next year. However, with the overall debt amount in Canada, it’s a drop in the ocean.

This unique product is available for any homeowner over 55-60 years old who has paid off property or relatively small (compared to the value) mortgage left. Major feature of this product is the lack of regular mortgage payments, when homeowner can continue to live and his house without making any mortgage payments. Interest will accumulate until property is sold.