Reverse mortgage loans in Canada are up more than 25% year over year, according to Canadian mortgage industry publication Mortgage Broker News.ca.
Citing data from HomeEquity Bank, the sole provider of Canada’s reverse mortgage product, volume is up 26% in 2014 as a competing product with the home equity line of credit.
Canada’s reverse mortgage is offered through its Canadian Home Income Plan (CHIP), first made available in the 1980s, with more interest today versus years past.
“I am seeing a lot more use and interest in reverse mortgages, especially for those who are in difficult situations,” Marc Abramovitz from Northwood Mortgage and founder of ilovemymortgage.ca told MortgageBrokerNews.ca earlier this year. “For example, one my clients had no mortgage on her home, and needed cash to reinvest back in her house. Her only other was to sell the property so a reverse mortgage was the best solution.”
Despite a percentage uptick in reverse mortgages this year, however, Canada’s volume overall is a fraction when compared to volume in the United States. Canada is on pace to close 3,000 reverse mortgages in 2014, according to the report, versus at least that many monthly in the U.S. this year.
Canada’s CHIP product offers borrowers who are 55 and older the ability to borrow up to 50% of their home equity.
Written by Elizabeth Ecker