“With the current demographic trends and extended life expectancy we project reverse mortgage originations to grow at 25-30 per cent annually over the next few years,” said Steven Ranson, president and CEO of HomEquity
Bank. “Canadians are living longer, have underfunded pensions and insufficient savings. For many, their house plays a big role in a comprehensive retirement plan.”
The increase in consumer direct business as well as continued growth through referral partners including banks and mortgage brokers is producing record results in the industry. Brokers themselves are pointing to increased demand for a product many professionals were slow to refer on.
Bank alone reported a record $41 million in reverse mortgage origination in the month of July, marking another month of record year-over-year growth for the reverse mortgage company.
The reverse mortgage industry is booming in Canada, growing by 21 per cent in July compared to last year.
According to recent numbers from Statistics Canada, the 55-59 age group in the country make up 7.2 per cent of the overall population, with those age 60-64 making up 6.1 per cent.
The numbers that show how the reverse mortgage sector is ready to really take off are the percentage of people in the 55-59 age bracket, which make up 7.8 per cent of the total population – which places HomEquity
Bank in the catbird seat, as is the only national provider of reverse mortgages in Canada available to those aged 55 and older.
The lender originates and administers Canada's largest portfolio of reverse mortgages under the CHIP Reverse Mortgage and Income Advantage brands, and has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.
Industry insiders are attributing strong year-over-year growth in reverse mortgage originations to several factors – the most notable being human longevity.