Home equity financing product lets homeowners who want to age in place unlock more liquidity
Equitable Bank is offering Canadian retirees more options to access their home equity through a new reverse mortgage product.
Through Equitable Bank’s Reverse Mortgage Flex, retired Canadians in Alberta, British Columbia, Ontario, and Quebec are able to access up to 55% of their home’s value. The new product, as well as the bank’s original Reverse Mortgage product, are offered as options for elderly homeowners with plans to age in place even as the pandemic continues to weigh on their finances.
“The current environment has made higher density living options, like retirement homes, understandably less appealing,” said Paul von Martels, vice-president of Reverse Mortgage Lending at Equitable Bank. “The typical approach of selling one's home to fund later-in-life needs is becoming an inferior option.”
Referring to a joint report released by the National Institute on Ageing and TELUS Health, von Martels said over 90% of retired Canadians intend to stay in their homes for as long as possible. The same study found 80% of COVID-19 deaths in Canada have happened to older Canadians in long-term care homes like nursing and retirement homes.
In Quebec, which saw more than 4,600 COVID-19 deaths happen in 27% of its nursing and retirement homes, seven tenths (68%) of respondents said their opinion on whether they or an older loved one should live in a long-term care facility has changed because of the pandemic; across the rest of Canada, 55% of respondents said the same thing. All in all, the survey found that almost 100% of Canadians who were 65 years old and above planned to support themselves to live safely and independently in their own home for as long as they can.
“We're seeing first-hand that Canadians want access to more of their home equity to finance their aging in place plans,” von Martels said.
Reverse mortgage products, which have seen increased use in recent years, are widely offered as a way for homeowners to turn part of their home equity into tax-free cash. That solution, for many Canadians, offers a way for Canadians to renew their focus on homeowners’ priorities like paying off debt, covering everyday expenses, home renovations, and supporting family.
“The addition of Reverse Mortgage Flex is a critical part of our decumulation strategy; one aimed at providing more benefits for Canadian seniors,” said Mahima Poddar, SVP and Group Head of Personal Banking at Equitable Bank. “We have built a full-service home equity suite of products with the best rates and features designed to preserve the client's hard-earned equity and ultimately provide greater value to enrich people's lives.”
