Reverse Mortgage Current Trends
Reverse Mortgage Current Trends
1. Popularity Continues to Climb
- Reverse mortgages have surpassed $7 billion in total outstanding loans in Canada, with Ontario leading in new originations.
- Homeowners 55+ are tapping into home equity to supplement retirement income, especially due to inflation and cost-of-living pressures.
2. Interest Rates Stabilizing (Slightly)
- Following aggressive Bank of Canada hikes in 2023–2024, rates are holding steady in 2025. This has provided some breathing room for borrowers exploring reverse mortgage products.
- Average reverse mortgage rates remain between 7.1%–7.5%, higher than traditional mortgages but still appealing due to no required monthly payments.
3. Shift in Borrower Profile
- Traditionally used by retirees, more financially active seniors are now using reverse mortgages to:
- Help adult children with down payments.
- Fund travel, healthcare, or home upgrades.
- Pay off high-interest debt instead of drawing from investments.
4. New Products from Private Lenders
- Alongside HomeEquity Bank (CHIP Reverse Mortgage) and Equitable Bank, more credit unions and fintech lenders are exploring tailored reverse mortgage options.
- There is a push toward flexible repayment features and hybrid products that combine lump sum and line-of-credit models.
5. Regulatory Caution
- Financial watchdogs like the Financial Consumer Agency of Canada (FCAC) have reiterated the need for transparency.
- New disclosure requirements are being developed to ensure seniors fully understand fees, compounding interest, and long-term equity loss.
6. Regional Spotlight – Ontario
- Ontario homeowners are seeing the greatest adoption due to high home values in cities like Toronto, Mississauga, and Burlington.
- In more rural areas, lower property appraisals can limit eligibility – pushing lenders to adjust minimum home value thresholds.
7. Consumer Education & Demand
- 2025 has seen a surge in online webinars, financial advisor partnerships, and AI-driven calculators helping homeowners estimate potential equity access.
- There’s a growing call for reverse mortgage literacy in retirement planning.
