Here is the link to HomeEquity Bank’s rates for a CHIP Reverse Mortgage https://homeequitybank.ca/chiprates
You may say, “Wow, those are much higher rates than what I see advertised on TV!”
Please remember that a Reverse Mortgage is a unique product that requires none of the following:
- Income qualification
- Stellar credit history
Now you may say, “How can they do this for such reasonable rates?”
There are many levels of financing with associated interest rates available to home owners. In order of cost of funds (annual interest rates) they are:
- Credit Cards 00 – 22.00%
- Unsecured Bank Loan 00 – 10.00%
- Private Mortgage 00 – 12.00%
- Unsecured Line of Credit 00 – 10.00%
- Reverse Mortgage 50 – 6.00%
- Secured Line of Credit 50 – 6.00%
- Best Rate Mortgage for a Refinance 80%
All of the above require monthly payments with the exception of a Reverse Mortgage.
Today’s ‘best rate’ mortgage requires qualification at income levels that are subject to ‘stress testing’ according to the new government requirements. What may have been an easy approval five years ago may no longer qualify in today’s new mortgage world.
If you are currently enjoying a ‘best rate’ mortgage and are happy with the payments please know that a file review could be initiated for many reasons by your financial institution and you may no longer ‘qualify’ based on today’s criteria.
TIP Do not give your financial institution any reason to look more closely at your file ie miss or be late with a payment on any of the credit instruments you have with them (mortgage, line of credit, loan, credit card).