Canada’s Reverse Mortgage Leader Develops More Emotional Pitch to Seniors

As the U.S. reverse mortgage market struggles to adapt to lower principal limits, demand north of the border is surging — and Canada’s top reverse mortgage lender has embarked on a new marketing push to expand even further.

The new TV spots from HomeEquity Bank emphasize homeowners’ desire to stay put even as they age. In one commercial, a young couple with a baby stroller envies a home owned by an older woman named Doris, predicting that she’ll want to downsize any day now — only for Doris herself to appear behind them and insist she’s not going anywhere.

In another, a couple jokingly threatens to move into their daughter and son-in-law’s condo after they suggest it could be time for them to downsize.

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“Retire in the home you love with a CHIP Reverse Mortgage from HomeEquity Bank,” an announcer concludes as the older couple laughs off the possibility of ever leaving their home.

The new strategy, which also includes cheeky “Closed House” and “Sold on Staying Put” lawn signs that mimic traditional for-sale markers, represents a pivot away from the more informational spots that have dominated the industry and HomeEquity’s previous ad lineup, according to head of marketing Vivianne Gauci.

“We needed a bit of a change from a sort of rational, product-focused message to something that was more emotional,” Gauci told RMD. “And that drove our evolution to the next step: to be more mainstream.”

Part of the inspiration came from a survey that the Toronto-based lender conducted with market research firm IPSOS, which found that 93% of Canadians aged 65 and older felt it was “important” to stay at home for the duration of their retirement years.

“They want to retire in the home that they love, but the other thing is that they felt retaining their home was important for them in maintaining their sense of independence,” Gauci said. “And for them, retaining a sense of freedom while having control in retirement is very important.”

These are boom times for home equity conversion products in Canada, with Gauci reporting a 40% year-over-year increase in originations for HomeEquity’s flagship CHIP product. Long the only option in the game, the CHIP gained a competitor in January with Equitable Bank’s PATH Home Plan, and overall reverse mortgage debt has ballooned nearly 25% between 2017 and 2018.

Unlike in the United States, the Canadian reverse mortgage industry is entirely private, with both the CHIP and the PATH available to homeowners aged 55 and older. HomeEquity’s product allows homeowners to access up to 55% of their home’s value.

Informational to fun

The informational pitch has long been a staple of reverse mortgage advertising on both sides of the border, with American TV viewers now intimately familiar with celebrity spokesmen offering to send seniors packets of documents and DVDs explaining how the program works. HomeEquity, meanwhile, counted figure skaters Kurt Browning and Donald Jackson among their pitchmen.

That appeal to clear information won’t go away entirely, Gauci insisted, but the IPSOS polling was enough to convince the company that it was time to move in a more visceral direction.

“Product-focused marketing is always going to have its place. You’re always going to have to educate people on what the product is and what it does,” she said. “But we felt the need to supplement that with something that built more of an emotional connection.”

Eagle-eyed readers may have also noticed another subtle change: HomeEquity added an “E” to its name, ditching the previous “HomEquity” formatting it had used. That was another deliberate choice to streamline the company’s message to consumers and eliminate any potential confusion when reaching out to seniors.

“We know that clarity is important, and so we had gotten feedback over the years saying: But why only one E?” Gauci said. “So we decided to go with two E’s to help make sure that our message wasn’t being sidelined by spelling.”

Written by Alex Spanko