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Reverse Mortgages

Author: 
Toronto Condo News
Publication date:
September 24, 2021
Article Summary: 

A growing number of retirees in Canada are turning to reverse mortgages to fund their retirement as they struggle to afford living expenses with their retirement income. Reverse mortgages allow borrowers to borrow up to 55% of the equity in their homes without income stipulations, and no payments are required until the borrower sells or passes on. However, the interest on the debt is high, and the principal amount owed increases each month along with interest owed. After about five years, the amount owed can increase by more than 30%, and the debt never disappears. The growing value of the debt makes it unlikely seniors will be able to pay it off, and after they pass on, the estate must repay the debt, which may leave nothing for their children.

Keywords: 

Reverse mortgages, retirement, Canada, home ownership, equity, borrowing, interest, debt, estate, HELOC, retirement income, living expenses.



Source Citation: 
Toronto Condo News
Reverse Mortgages
September 24, 2021
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