Canadian seniors are slowing down on the equity binge, but they’re still tapping quite a bit. Office of the Superintendent of Financial Institutions (OSFI) filings show reverse mortgage debt reached a new high in June. Canadian reverse mortgage debt is decelerating in growth, but is still one of the fastest growing segments of debt.
A reverse mortgage is an increasingly popular way for seniors to tap their home equity. Lenders will give you a lump sum or regular payments, secured by the equity in your home. They’re similar to a home equity line of credit (HELOC), but no regular payments are not required. Instead, the balance is only generally due in the event of death, sale, or default.
For this privilege, they generally charge a higher fee than a HELOC. Combining no payments and a higher interest rate is a great way to see your home equity vaporize. So it’s always best to thoroughly think a move like this through. Got it? On to the data….CLICK for complete article