More Canadian seniors have been tapping into their home equity for cash to fund their retirements over the course of the pandemic, giving an earnings boost to the lenders that offer reverse mortgages and other similar loans.
One of those, Equitable Bank Inc., reported a 262 per cent year-over-year surge in its reverse mortgage product in first-quarter 2022 earnings announced this week. Altogether, Equitable originated $304-million worth of the loans, up 23 per cent over the final quarter of 2021.
Reverse mortgages typically function like home equity lines of credit and allow Canadians to put up the equity in their home in exchange for a lump sum of cash or a consistent flow of payments.
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