CMHC reports annual rate of housing starts in June down six per cent from May + MORE Jul 17th

Reverse mortgages were at one time considered the Wild West of financial products, associated with aggressive and even predatory sales tactics targeting seniors in the United States. Fairly or not, that reputation has instilled some wariness in Canada, where regulations have long been more stringent than they were during the industry’s early days south of the border. Nowadays, some experts say they’re an option worth considering for older Canadians who are house rich, cash poor, and well aware of the pros and cons.

“It could be a beneficial tool for certain people, but not for others,” says Barbara Knoblach, an Edmonton-based financial planner at Money Coaches Canada.

How reverse mortgages work

Reverse mortgages are available to Canadian homeowners who are 55 and older. Up to 55% of the equity built up in the home can be unlocked tax-free in a lump sum or incremental payments, usually at interest rates 2% to 3% higher than what a conventional mortgage would carry…

Canada Mortgage and Housing Corp. says the annual pace of housing starts in June fell six per cent compared with May.

Shares of EQB Inc., the parent company of mortgage lender Equitable Bank, surged more than 9% Wednesday after Loblaw disclosed plans that could raise its ownership stake to nearly 25%.

Canada’s four reverse mortgage providers have cut rates within weeks of one another, reflecting lower institutional funding costs and growing competition for an expanding market.