Reverse mortgage is best catered to house rich, cash poor seniors who need to live with some comfort for the rest of their lives.

The process of a reverse mortgage sees borrowers apply for loans against the equity of their home to acquire either one lump sum loan or regular installment payments. In a way, they are much like home equity lines of credit (HELOC). However, reverse mortgages are only for people over 65 and the borrowing rates tend to be far greater than a HELOC. Reverse mortgage also don’t require payments.

Since seniors aren’t going to garner much new income, they aren’t going to be paying off the loan promptly, or even at all. Although payments aren’t required, whatever wealth you have will evaporate given the higher rates.

Canadian Reverse Mortgage Debt Tops $3.42 Billion

The Canadian outstanding reverse mortgage debt in October was up a startling 11.57% compared to September, at $3.425 billion.

This year has seen a massively increased pace of growth at 57.46%, which is actually a new national record.

Canadian Reverse Mortgage Debt

Other kinds of credit have slowed while reverse mortgage debt has gone through the roof, meaning reverse mortgages are set to rise in price upon renewal, chewing away equity even faster than before.