Reverse mortgages have been gaining popularity in the U.S. However, Canada's largest reverse mortgage lender HomeEquity Bank, has see its business grow approximately 540%, according to Reverse Mortgage Daily.
"HomeEquity Bank reports originating a record $820 million Canadian Dollars (CAD, approximately $627,956,000 USD) in reverse mortgages in 2019, up from $767 million in 2018 and $309 million five years prior," according to RMD.
"Much of the continued success being enjoyed by the bank is due to more Canadians realizing that there are financial gaps in the context of modern retirement."
Steve Ranson, CEO of HomeEquity Bank, attributed the boost in reverse mortgage activity to the fact that seniors are taking a larger sum of debt into retirement. With a fixed income simply not serving as enough to cover that debt, reverse mortgages are looking like a much better option.
"While the earliest age of eligibility for a reverse mortgage in Canada is 55 compared with 62 in the United States, Ranson says that the average age of a HomeEquity reverse mortgage customer is in their early 70s," according to the report.
"Between 30-40% of HomeEquity’s business comes from customers paying off debt which can include a traditional, forward mortgage, but the loan proceeds are continually being applied to other sources of financial stress, as well."
To learn more about why reverse mortgages are gaining popularity in Canada, click here.