Proportion of seniors in reverse mortgage market trending upward

HomEquity Bank’s release of its updated figures pointed at record-breaking performance over the first five months of 2017, mainly powered by the increasing number of seniors taking on reverse mortgages.

The lone provider of the CHIP Reverse Mortgage product saw a new high of $60M in its reverse mortgage originations last month, representing a year-to-date increase of 35 per cent compared with the same period a year ago.

“Canadian seniors are releasing the equity they’ve built in their homes, transforming it from passive to active,” HomEquity Bank president and CEO Steven Ranson said.

“We’ve seen a shift in mindset: there’s a broader understanding that home equity – which is often the largest single asset for Canadians – can be easily unlocked,” Ranson noted, adding that this was a natural consequence of seniors (who are now living longer and more active lives) being able to take advantage of the steady appreciation of Canadian residential real estate.

“Historically, the average age of our clients is 72,” the bank exec explained. “Working together with financial planners and mortgage brokers, we’re finding that people incorporate equity release into their financial outlook at an earlier age.”

More and more Canadians aged over 55 are also contributing to the housing or educational dreams of their children (and even grandchildren) as the “bank of mum and dad,” Ranson added.


Related stories:
Seniors’ housing tenancy rate up in major markets - CMHC
Seniors’ home ownership at risk due to mounting debt - report
 

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COMMENTS

  • by Ronnie Kartman 2017-06-14 9:25:16 AM

    Unfortunately (But fortunately for CHIP), CHIP remains the sole major supplier of this now-important mortgage product in Canada. This limits broker participation. In the U.S. there are multitudes of lenders that have entered into this marketplace, which has created a robust Reverse Mortgage Market, and gives brokers an equal multitude of the choice of Reverse Mortgage Lending alternatives in Canada for the client. Perhaps some of the B lenders and/or the major banks will become more involved in Reverse Mortgages.

  • by Ronnie Kartman 2017-06-14 9:29:08 AM

    Correction:

    I meant to say that the multitude of Reverse Mortgage lending alternatives gives broker and clients more choice within the U.S. It would be advantageous to Canadian Mortgage Brokers and their clients if there were more alternative Reverse Mortgage Lenders in Canada as well.

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