Reverse Mortgages are becoming a popular way for Canadians 55 and over to access the equity in their home. And its no wonder – they allow you the financial freedom of seeing consistent loan amounts, without ever having to pay back the principal or interest until you either move or sell the home.
Backed by a federally regulated bank – HomEquity Bank – this means that rates are at historical lows at present.
For the latest rates and how they work, check out our article on reverse mortgage rates.
Yes, the rate for this product is higher than a standard mortgage or Home Equity Line Of Credit product. However, it is considerably lower than other options out there – such as a car loan, credit card or other financial options.
And all of these other options require you to make monthly payments as well.
The following table illustrates where reverse mortgage rates sit compared to other products:
Reverse mortgage rates are not the only mortgage product that is benefiting from record low historical rates. All across Canada, all mortgage products are currently at low levels.
In fact, you only have to look back 15-20 years or so and you’d be lucky if you were able to get the current rates available on a reverse mortgage on any kind of mortgage product! That’s how low the market is just now.
This is the interesting question about everything – whether you should jump in now while the rates are low and the only way is really up.
Susan Hunter is one of the many Canadians who have already taken advantage of these low rates. “We wanted to pay off our debts, but we didn’t want to sell our home to do it. A Reverse Mortgage was a good solution for us. The rates are great and, by making modest interest payments, we are able to get the CHIP Reverse Mortgage at an even lower rate than we had hoped,” says Hunter. “The timing couldn’t be better.”
If you are replacing credit card or other debt then you could actually save hundreds of dollars of month in interest – while cutting your monthly payments to zero. That’s pretty cool – there are almost no products out there where you’re able to do this!
Yes, all these other options are also available at lower rates. So you should consider these when deciding what your options and alternatives are.
Of course, these come with their own issues and problems.
If you’re looking for extra money to pay off debts, provide a steady income during retirement, make home improvements, or more – the CHIP Reverse Mortgage is a great solution for you. Get up to 55% of the value of your home and never have to worry about making payments during the lifetime of the loan.
As we have talked about previously, for retirees, a reverse mortgage is a fantastic option.
You can use the amount for whatever you want and it is also worth noting that there are absolutely no tax consequences whatsoever – the money is completely, 100% tax free.
Original Article: https://www.reversemortgagepros.ca/low-rates/