Reverse Mortgage Calculator Canada
Table of Contents
This Reverse Mortgages Calculator Canada is for Canadian residents and properties only. Calculations are based on number of variables such as age, location, and of course value of the property. The CHIP reverse mortgage calculator will give a fairly accurate estimate of how much you would qualify for, however, the actual amount will be based on an appraisal.
Certified Reverse Mortgage Specialist
Toronto GTA (416) 912-6200
Simcoe County (705) 717-5598
York/Durham/Peel (289) 366-8334
Western Ontario (226) 767-8867
Reverse Mortgage Calculator Canada
The Canadian Reverse Mortgage Calculator gives an estimate based on the preliminary information provided. Should you, the homeowner, decide to proceed with a CHIP Reverse Mortgage, an independent appraisal of the home will be required in order to establish a precise evaluation. Any outstanding loans secured by the home must be paid with the HomEquity Bank reverse mortgage proceeds.
Introduction to Reverse Mortgages
One thousand people turn 65 in Canada every day and many of them would benefit from a reverse mortgage to help finance their retirement. A reverse mortgage has several important options and benefits that differ from other financial products. Seniors can use reverse mortgages to supplement their income and help finance the retirement of their dreams.
Home values have increased over the years and make up a significant portion of homeowner’s net worth. With a reverse mortgage from HomEquity Bank, Canadian seniors can get the money they need to finance their retirement and stay in their homes as long as they like.
A reverse mortgage acts as a way for seniors to access the equity in their homes without selling or moving. The loan functions similarly to a traditional home equity loan with one exception; so long as the homeowner lives on the premises, the payments on the principal and the interest are deferred and are settled when the homeowner no longer maintains residency in that home.
The criteria for eligibility includes:
- the age of the homeowners
- the type of property
- the home location, and
- the market value of the home.
A home valuation will be ordered at the time of the loan request to determine the current value and our lending practices ensure that you will never owe more than fair market value of the home.
Payment Options and Benefits of Reverse Mortgages
A variety of flexible payment options are available based on the unique needs and goals of the homeowners. Options include a lump sum payment, future installments, or a combination of both.
The funds acquired from your reverse mortgage can be applied to cover monthly expenses or assist family and loved ones, and enable you to maintain your lifestyle in the home you love.
Most seniors look forward to retirement and being free from the working world and having the spare time to pursue hobbies and other activities you are passionate about. A reverse mortgage can provide the funds that many seniors otherwise would not have access to, allowing them the freedom to engage in post-retirement travel, hobbies and activities.
To find out more about all the ways a reverse mortgage can help you finance your retirement please contact:
Certified Reverse Mortgage Specialist
Mary from Pritchard British Columbia
Major life changes can happen at any time. For Mary, 67, her divorce after 40 years of marriage presented some challenges. A priority for Mary was that her home was comfortable and well-maintained.
Mary used her home equity to finance maintenance and improvements to her home. She accessed about 40% of the equity in her home with a CHIP Reverse Mortgage. Taken as a lump sum, the money financed the construction of a new deck and garage. A hot tub purchase is also planned in the near future.
Mary also used some of the money for cash flow. Her adjustment to her new lifestyle was considerably eased with the knowledge that her future was financially secure.
Patrick and Ann from Calgary Alberta
It mattered a lot to John, the son of Patrick, 83 and Ann, 76, that his parents live comfortably in retirement. With Patrick in a long-term care facility while Ann lived in the family home, the bills started piling up.
With Power-of-Attorney, John recommended the CHIP Reverse Mortgage solution to his parents. With their agreement, he proceeded to secure it.
At the outset, Patrick and Ann accessed about 20% of their home equity to pay off their line or credit and credit card balances. John also arranged an additional $1,000 per month to cover his father’s medical care expenses.
John and his parents couldn’t be happier. He says, “CHIP made a lifestyle difference and opened many doors.”
Ben and Inge from Parry Sound, Ontario
After 15 years of retirement Ben, 74, and Inge, 72, were worried when they realized their lifetime RRSP savings were running low. To maintain their lifestyle with a consistent and dependable cash flow, Ben and Inge considered a range of options.
When Inge saw the CHIP Reverse Mortgage on television, she wanted to learn more.
Inge and Ben were excited about accessing their home equity with no payments until such time that they were ready to sell and move. They accessed over 38% of the equity locked up in their home, investing almost everything in low-risk investments. The income generated by the investments is now supplementing their monthly cash flow.
Inge is thrilled with how things turned out. She says, “I am worry-free for the rest of my life. No more financial worries is the most fantastic feeling a person can have. We wanted to stay in our house because we love it. If it wasn’t for CHIP, I could have never stayed in my house.”
Monique from Saint-Bruno-de-Montarville, Quebec
When Monique, 77 years of age, found herself short of cash, she didn’t feel right asking her children for help. With a strong independent streak, Monique had always relied on herself.
Monique was intrigued when she saw a CHIP Reverse Mortgage commercial on television. She inquired about meeting a CHIP representative. At the outset, Monique was skeptical but was reassured by the clear and transparent process.
After careful consideration and consultation with her son, Monique was confident that the CHIP Reverse Mortgage Plan would meet her needs.
It worked out perfectly for Monique. Through CHIP Reverse Mortgage, she accessed 34% of the equity of her home. By not accessing the full lending limit of her plan, she can access additional capital for future needs.
Monique felt great relief paying off her existing mortgage. As well, money that used to service her debt now supplements her monthly cash flow. Monique is especially proud of living in her home while retaining her financial independence.
Planning for Retirement
Canadians are living longer and facing a greater responsibility today to fund their retirement. Saving and building a retirement nest egg for the future is becoming more important. However, many Canadians are not saving enough to maintain their desired standard of living throughout their retirement.
In retirement, many Canadians have a reduced income since they are no longer working. It is important to think about how much you will need to retire comfortably, whether you will be relying on a reduced income, and whether that will be enough.
Since we are living longer and our life expectancies continue to increase, our retirement savings will be stretched further. To help yourself prepare for a comfortable and sustainable retirement, you will need to plan your retirement carefully, and understand how Canada’s retirement income system works. It is important to consider your options. The earlier you start planning, the more options you will have.
With proper planning, you can save enough for the standard of living or lifestyle you want in retirement. As retirement planning may be a complicated process, you may want to consult a financial professional who specializes in retirement planning.
It is important to research and prepare questions that you want answered before meeting. Write down your financial goals and ask how your financial professional can help you achieve them. To help you choose the right financial professional, see Working with a financial professional.
Keep in mind that while planning for your retirement is a long-term commitment, plans can change. For example, you may wish to retire at an earlier age than you originally planned, or you might have changed jobs and now earn a different income. Review your retirement plan annually and after every significant event in your life to see how well you are doing and consider whether you need to make any changes.
Reverse Mortgage Vs. Home Equity Loan
More and more Canadians are going into their retirement years without a lot of money saved in the bank. It is suggested that in order to live a financially comfortable retirement, couples should have saved 50-60% of their peak pre-retirement income, which equates to roughly $42,000 to $72,000 a year or $275,000 to $1,025,000. Singles should have saved 60-70% of their peak pre-retirement income, roughly $30,000 to $50,000 per year or $350,000 to $850,000. (Assuming mortgage is paid off and children are financially independent. All amounts based on 2014 dollars).
In a 2013 survey of 1,500 Canadians over the age of 50, only 2 out of ten households said they would have more than $250,000 saved for retirement. 50% of the households surveyed felt that they would consume their retirement savings within the first 10 years of retirement.
Because of these financial woes, many Canadian homeowners in their later years have considered taking out a home-equity loan or the option of a reverse mortgage to access the equity in their home.
Like a primary mortgage, a home equity loan lets you convert your home equity into cash. In fact, many refer to a home equity loan as a second mortgage, where you would receive the loan as a single lump-sum payment, and then you would make regular payments to pay off the principal and interest.
Another form of home-equity loan is the home equity line of credit (HELOC). A HELOC gives you the option to borrow up to a pre-approved credit limit, on an as needed basis. Therefore, with a home-equity loan, you would pay interest on the entire loan amount, whereas with a HELOC, you pay interest only on the money you withdraw. Since a HELOC is an adjustable loan, the payment changes as the interest rates fluctuate.
It is important to keep in mind that your home acts as collateral in a home-equity loan. So if you default on the loan, you risk losing your home to foreclosure.
With a reverse mortgage, instead of making payments to a lender, the lender will pay you, based on a percentage of the appraised value of the home, as well as factors such as your age and the age and the condition of the house.
You will continue to hold title to your home, but as soon as you become delinquent on the property taxes and/or insurance, the condition of the home is in disrepair, you move/sell the home or you pass away, the loan is then due for repayment.
Home Equity Loans, HELOCs and Reverse Mortgages are all options, which allow you to convert the home equity into cash, however, they differ in terms of credit, income, repayment, disbursement, age and equity requirements. Before you make any decisions, find out how to tailor your needs and requirements with the best product for your situation.
Yvonne Ziomecki (HomEquity Bank – Senior Vice President, Marketing and Sales) wrote this guest post for Dominion Lending, and it explains the difference between a reverse mortgage and a home equity loan.
Here are some recent press releases and case studies by HomEquity Bank
Reality Gap Threatens The Financial Health Of Canadian Seniors: HomEquity Bank Research
TORONTO, November 24, 2016, – At a time when Canadian seniors are living longer and healthier lives, their financial fitness requires close attention. Recent research sponsored by HomEquity Bank, providers of the CHIP Reverse Mortgage, indicates there is a startling gap between the lifestyle expectations of those Canadians 40+ years and the reality.
The study, which looked at the financial health and viability of Canadian seniors, was national in scope and focused on Canadian residents, 40 years or older who own their homes. The random survey of 1,500 participants was undertaken between October 5 – 14, 2016 with a margin of error of +/- 2.5 percentage points 19 times out of 20.
The research indicates that the majority (82 per cent) attach significant importance to the ability to stay in their homes during their entirety of their retirement years. At the same time, almost half of those who identified themselves as retirees have outstanding debt and 40 per cent report savings of less than $100,000. Furthermore, a quarter of those aged 75+ still have a mortgage.
That contradiction is reinforced by data that shows 69 per cent believe the value of their home equity is important to their retirement plans; 44 per cent describe it as extremely or very important.
Other key findings from the research include:
- 69 per cent expressed confidence that they have sufficient funds to retire;
- 78 per cent have savings and investments;
- 25 per cent include the sale of their home as a factor in retirement income;
- Paying off a mortgage is a surprisingly low priority for the seniors that still have one (25 per cent of those surveyed who are 75 +);
- 43 per cent of retirees have debt with 73 per cent of the debt being less than $50,000; and
- 35% of Canadians 75+ have debt.
“This data shows a deeply troubling gap between perception and reality,” said Yvonne Ziomecki, SVP, Marketing & Sales at HomEquity Bank. “Canadian seniors are among those with record household debt levels and also surprisingly minimal savings. Solutions must be based on a solid understanding of all the options available, including reverse mortgages that allow seniors to unlock the soaring value of their home equity.”
Among those options is a CHIP reverse mortgage, a proven financial product that HomEquity Bank has provided to Canadians aged 55+ for 30 years. A reverse mortgage is a financial tool that allows homeowners to access the value of the equity in their homes, while still owning their homes until they make the decision to sell.
HomEquity Bank, the only provider of reverse mortgages in Canada, is a fully-regulated, Schedule 1 Canadian bank.
Doctors, lawyers and dentists just like everyone else
High income earners such as doctors, lawyers and dentists are often perceived as rich and lucky to experience a comfortable, financially stress-free retirement.
Yet, according to Mac Killoran, Tax Partner, Fruitman Kates LLP Chartered Accountants, this is not always the case. Professionals are just as likely to encounter money troubles late in life and he has seen this with his own clients.
“I see it quite often, where high income earners sell their practice and retire, but still spend money as if they are earning peak salary, which can lead to an erosion of their capital and ultimately financial troubles,” states Mr. Killoran.
In fact, investments often can not provide enough money to allow retired professionals to enjoy the lifestyle to which they are accustomed, notes Mr. Killoran. Then, if they allocate money to helping adult children financially it also deals a blow to finances. That is why some of his clients are left with the sole option of tapping into the equity of their homes to improve finances.
“What some of my clients do not realize is that helping their adult children with a loan from their professional corporation leads to personal tax implications,” he explains. “And so it is another hit. Often, their only recourse is to obtain a reverse mortgage.”
Mr. Killoran has worked with clients who owe from $300,000 to $400,000 in taxes to Canada Revenue Agency due to poor planning and/or handling of finances.
Here, Mr. Killoran provides his top tips on how professionals can avoid debt late in life:
- Have the difficult conversations before retirement on cash needs, budgeting and ensuring that your capital can support your lifestyle.
- Understand the implications of withdrawing capital from a professional corporation prior to doing so by consulting with your accountant and investment advisor.
- Be prepared to say no to your kids or your spouse when it comes to money and spending.
“Older Canadians from all socioeconomic groups experience financial challenges. It is not uncommon for us to work with high net worth individuals, professionals and business owners. Almost all want to remain in their homes and communities as they age. Through a reverse mortgage they can utilize the equity in their homes to fund retirement on their terms and continue to live in a familiar environment – which in most cases is the family home,” states Yvonne Ziomecki, SVP, HomEquity Bank.
HomEquity Bank, the only Canadian bank working exclusively with seniors, helps elderly people remain in their homes through its CHIP Reverse Mortgage and Income Advantage solutions. Seniors can supplement their income via reverse mortgage through monthly or lump sum payments.
HomEquity Bank stats show seniors plan to use home to generate income
Canadian seniors consistently report that they prefer to live at home and age in place. Yet, they also report that financial challenges are the biggest hurdle to doing so.
A recent report from the Federation of Canadian Municipalities (FCM) shows that 93% of seniors live at home and prefer to age in place. And, HomEquity Bank statistics support this, reporting that 60% of retired Canadians describe staying in their home as critical to their quality of life.
However, the FCM report outlines: 700,000 senior-led households face a housing affordability challenge; a combination of modest incomes and high living costs mean that one in four senior-led households are spending more than 30% of their income on shelter; and, seniors who live alone experience poverty at twice the rate of other seniors.
“Every day, our team hears from older Canadians who want to remain in their homes and communities, but find the financial challenges very stressful. We work with seniors to help them explore utilizing the equity in their homes so they can continue to live in a familiar environment – which in most cases is the family home,” states Yvonne Ziomecki, SVP, HomEquity Bank.
One reason finances have been adversely affected, notes the FCM study, is because only one-third of the Canadian workforce is covered by a registered pension plan, down from 37% in 1992.
Also, according to HomEquity Bank stats, 30% of Canadians nearing retirement have $50,000 or less in savings. And, almost 70% of those nearing retirement are still carrying debt. Thirty-five per cent of Canadians nearing retirement plan to use the value of their home to generate retirement income.
“Seniors who are living on modest incomes face challenges to their economic security. HomEquity Bank allows seniors to access their housing assets without impacting CPP or OAS, which can lead to better quality of life in retirement,” adds Ms. Ziomecki.
HomEquity Bank, the only Canadian bank working exclusively with seniors, helps elderly people remain in their homes through its CHIP reverse mortgage solution www.chip.ca. Seniors can supplement their income via reverse mortgage monthly or lump sum payments.
HomEquity Bank teams with Equifax Canada to study Debt in Retirement
Mortgage debt among seniors is increasing right across Canada, and for those aged 70+ it has increased 12% compared to 2013.
That’s according to the results of a Debt in Retirement study conducted by HomEquity Bank and Equifax Canada.
The study was conducted in July, 2015 and focused on Canadians aged 55 and older. It analyzed the main categories of debt including: mortgages, lines of credit, bank loans, car loans, credit cards and retail cards. The study provided a comparison period of 2013 and 2015.
“At HomEquity Bank, we are not surprised to see the results of this study. Every day, we hear from seniors who are struggling with debt. It can be due to inadequate pensions, the high cost of living or costly health care issues, but debt is increasingly a concern for many seniors,’ states Yvonne Ziomecki, SVP, HomEquity Bank.
Here, below, are the key findings of the Debt in Retirement Study:
- Mortgage debt is increasing fastest in the Greater Toronto Area and Quebec and less so in Alberta and British Columbia
- In 2015, 16.5% of people aged 55+ are carrying a mortgage. This is an increase of 10% from 2013
- The average mortgage balance for Canadians aged 55+ grew by 11% from $158,000 in 2013 to $176,000 in 2015
- The average mortgage balance is highest in the 55 to 60 age group, at $189,000, and lowest for the 75+ age group at $134,000
- Seniors aged 71+ with a mortgage have an average balance of $140,000
- Overall debt for those 70+ has increased by 12% between 2013 and 2015 versus only a 4% increase for those under 70.
It is shocking to find Canadians 71+ are still carrying hefty mortgages,’ notes Laurie Campbell, CEO, Credit Canada Debt Solutions. ‘By this age, they are fully retired and there is no opportunity to increase their income.’
In fact, the study is showcasing a more relaxed attitude towards debt, she adds, ‘and this can jeopardize retirement.’
The best case scenario is to ‘have your financial cards in good order in your early 50s and mortgage free by retirement,’ Campbell explains.
HomEquity Bank, the only Canadian bank working exclusively with seniors, helps elderly people remain in their homes through its CHIP reverse mortgage solution. Seniors can supplement their income via reverse mortgage monthly or lump sum payments.
Equifax empowers businesses and consumers with information they can trust www.equifax.ca. A global leader in information solutions, Equifax leverages one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights that enrich both the performance of businesses and the lives of consumers.
SOURCE HomEquity Bank
HomEquity Bank announces partnership with Kurt Browning
June 22, 2016 HomEquity Bank, the only Canadian bank working exclusively with seniors, is proud to announce its new spokesperson is Canadian figure skating icon Kurt Browning.
Kurt Browning is a Canadian figure skater, choreographer and commentator. He is a four-time World Champion and four-time Canadian national champion.
“We’re thrilled to be partnering with Kurt,” said Yvonne Ziomecki, SVP, Marketing & Sales at HomEquity Bank. “It was important to us to work with someone Canadians view as trustworthy and inspirational and Kurt is the perfect fit. Kurt’s vibrant personality and hard work has been an integral part of the Canadian landscape and we are very excited to be working with him.”
“Kurt was very involved throughout the process, driving creative direction for the TV spots that showcase his skating and fun personality and providing expert input,” said Ziomecki. Starting in July, Kurt will appear in TV commercials as well as online ads featuring CHIP Reverse Mortgages. Kurt’s sons, who have skated with their famous father, will also be featured in the ads.
The commercials will also showcase Kurt with Donald Jackson, 76, a retired figure skating legend and an Olympic medalist. In addition to the commercials the duo created a special routine to celebrate their friendship and performed it at recent Stars on Ice shows, delighting Canadian audiences. “I am so humbled to be working with the great Don Jackson, skating with him has been a wonderful experience,” said Browning.
Caring about Canadian seniors comes naturally to Kurt Browning. In fact, on June 8th he helped to make a senior’s dream come true by skating with Moncton native Pat Noddin, 79. Pat, who learned to figure skate at age 58, always dreamed of skating with Kurt Browning. “It was the thrill of a lifetime. To think I got to skate with Kurt Browning, Don Jackson and Brian Orser, it was an incredible moment,” she said.
“I’m very excited to be working with HomEquity Bank. CHIP Reverse Mortgages have helped thousands of retired Canadians live the retirement they’ve always wanted. Their homes have increased in value over the years, but they don’t want to sell the home that means so much to them, with a CHIP Reverse Mortgage, they don’t have to,” explained Kurt.
HomEquity Bank, the only Canadian bank working exclusively with seniors, helps people remain in their homes through its CHIP Reverse Mortgage solution. Seniors can supplement their income via reverse mortgage monthly or lump sum payments.
About HomEquity Bank
HomEquity Bank is a Schedule 1 Canadian Bank offering the CHIP reverse mortgage solution. The company was founded 30 years ago as an annuity based solution addressing the financial needs of Canadians who want to access the equity of their top asset – their home.
HomEquity Bank Continues Steady Growth with Strong Q1 Results
HomEquity Bank, provider of the CHIP Reverse Mortgage, continued its steady performance in Q1 of fiscal 2017. The company posted a 27 per cent year over year increase in mortgage originations.
The strong Q1 results demonstrate ongoing growth in demand for reverse mortgages among Canadian seniors. In 2016, HomEquity posted record growth of 26 per cent.
With strong, steady ownership by Birch Hill Equity Partners, HomEquity Bank has continued to grow its business while working with clients to monetize the value of their most important asset – their home.
HomEquity Bank, regulated by the Office of the Superintendent of Financial Institutions (OSFI), attributes the strong financial results to comprehensive direct-to-consumer sales efforts as well as effective engagement with mortgage brokers through a robust certification process. HomEquity Bank maintains rigorous client intake and approvals requiring each potential client to retain independent legal advice, among other requirements. These prudent measures have contributed to the company’s continued secure and stable growth.
“Both HomEquity Bank and our parent company, Birch Hill Equity Partners, are pleased with our strong Q1 results,” said Steven Ranson, president and CEO of HomEquity Bank. “At a time when the real estate market is top-of-mind for many Canadians, we are pleased that our business has steadily grown while maintaining a strict adherence to underwriting standards. We will continue to serve Canadian seniors by offering regulated mortgage products that allow them to access the equity in their homes and enjoy a fulfilling retirement.”
About HomEquity Bank
HomEquity Bank, a federally-regulated, Schedule 1 Canadian bank, is the only national provider of the CHIP Reverse Mortgage solution. Founded 30 years ago, HomEquity Bank has been helping Canadian homeowners aged 55+ access the value of the equity they have in their homes, maintaining ownership of their home, until they make the decision to sell.
HomEquity Bank has partnered with the Canadian Association of Retired Persons (CARP) Canada’s largest non-profit, non-partisan advocacy association for Canadians As We Age. CARP now recommends HomEquity Bank’s CHIP Reverse Mortgage as a smart and comprehensive solution for Canadians planning for retirement.
HomEquity Bank has ranked on the Canadian Business and PROFIT’s 28th annual PROFIT 500 list, the definitive ranking of Canada’s Fastest-Growing Companies. HomEquity has also been recognized as an Aon Best Employer – Canada 2017.
Thank-you for using HomEquity Bank’s Reverse Mortgage Calculator for Canada.