Reverse mortgages have been around in Canada since 1986, and they’re a type of home loan that’s becoming very popular. These mortgages are secured by your home equity but unlike other types of mortgages, there are no principal or interest payments for as long as the homeowner lives in the home. But while these loans are becoming more common, there’s still one common misconception about them – and that’s the idea that you can just go out and get one from anybody. In fact, there’s currently only one lender in Canada offering reverse mortgages.
That lender is Horizon Equity, and they offer reverse mortgages through their Canada Home Income Plan (CHIO.) There is an international lender known as Seniors Money that currently offers reverse mortgages in six different countries, but right now Canada is not one of them. They did come into the Canadian mortgage briefly during 2008, when market conditions went in the tank. They sold out to CHIP a little while ago, although there has been some talk that they are going to be reentering Canada and once again offering reverse mortgages.
The idea that only one lender currently offers reverse mortgages isn’t necessarily bad for Canadians, although no one ever really likes the idea of a monopoly. The mortgages that CHIP offers though are very fair, and much easier to obtain than in the United States, although reverse mortgages are much more common for our neighbours down South than they are here. CHIP also clearly outlines on their website when a reverse mortgage makes sense, and when they don’t (such as if you plan on holding the reverse mortgage for a long time.) CHIP also generally offers loans that still allow the homeowner to hold 50% equity in their home, so it’s easy to pay off and so that the homeowner always still holds the majority of their equity.
If you want to tap into your home equity by using a reverse mortgage, speak to a Toronto mortgage broker. As reverse mortgages become more popular, more lenders are likely to start off these types of home loans and a mortgage broker will always know who’s currently offering them, and who isn’t. A Toronto mortgage broker will also be able to tell you if a reverse mortgage is right for you, or if you’d be better off choosing another type of loan. “
