Filings from the Office of the Superintendent of Financial Institutions (OSFI) revealed that reverse mortgage debt generated double-digit gains in July, as reported by Better Dwelling.
Historically, reverse mortgage was seen to have been posting double-digit increases for about 6 years already. Over 2017, though, the gains have been twice its usual number.
The month of July saw a total balance of $2.99 billion in July, higher by $29.74 million from June. Year-over-year, the figure increased significantly by 45.32%. Clearly, the recorded reverse mortgage debt marked a new all-time high.
What's even interesting? The annual growth rate has stayed within a point’s range since November 2017.
Digging deeper, Better Dwelling identified a potential complication moving forward.
"The short-term rates on these are about 6% right now. At that rate, the reverse mortgage debt would double every ~12 years. Rates are also just off of historic lows, meaning the servicing costs are likely to rise in the future," the online portal stated.
For reference, a reverse mortgage is a loan that permits Canadians to get money from their home equity without having to sell one's home.