And yet, there are many misconceptions about this financial product, which allows Canadians to borrow up to 55% of a home’s value, tax-free, on properties worth $250,000 or more.
With home property values soaring and the federal government tightening traditional mortgage qualification rules through a rigorous stress test, more homeowners are looking to reverse mortgages as a way to unlock the value tied up in their properties. Borrowers receive the money tax-free to use as they wish—to supplement their income and increase cash flow; to cover unexpected expenses or home renovations; and to help stay in their current home are just a few examples.
Unlike home equity lines of credit (HELOCs), which require monthly payments, reverse mortgages, such as those offered by Equitable Bank, are ideal for cash-strapped homeowners who want to stay put without increasing their living expenses.
