It’s no secret that interest rates on reverse mortgages are higher than what you can expect to pay on conventional mortgages – and there’s valid reasoning behind this reality.
The most significant cause for higher interest rates is that the loan requires no monthly mortgage payments, not even interest payments. This can definitely be a worthwhile trade-off to make in order to secure a mortgage that requires zero payments, as no other home loan offers this kind of flexibility.
In recent years, fixed reverse mortgage interest rates have continued to fall within the 5-6% range, which definitely makes for an affordable choice. And much like a traditional mortgage, variable-rate options are also available. Click here for a helpful reverse mortgage calculator to see how much money you may be eligible to receive.
Keep in mind that you can also choose to make payments on your loan – even interest-only payments – at any time.
Never owe more than your home is worth
As an added safeguard to a Home Equity Bank reverse mortgage, unlike most traditional mortgages in Canada, this product comes equipped with a negative equity guarantee. This means that if the loan amount due is more than the sale amount of the property, Home Equity Bank will cover the difference between the sale price and the loan amount (provided the homeowner has paid their home insurance, property tax and maintained the property in good condition). If these conditions are met, then the homeowners or their beneficiaries will never owe more than the fair market value of the home at the time it’s sold.
As a Certified Reverse Mortgage Specialist, it’s my job to understand and support the growing needs of seniors to determine if a reverse mortgage is right for you or your loved ones. Click here to access our convenient online application. Have questions? Answers are just a call or email away!