Canadian 55+ Facing a Double Edged Sword

Canadian 55+ Facing a Double Edged Sword

Canadian 55+ have been hit with a double-edged sword – rising interest rates combined with soaring prices of groceries and energy, has eroded purchasing power as pensions grossly lag inflation. Stats Canada reported a slight drop on inflation in September to 6.9% from 7.0% in August, which has paved the way for another interest rate hike.

Key stats:

  • Groceries are up 11.4% year-over-year, the fastest increase since 1981
  • Recent weakening of the Canadian dollar could continue to drive up grocery prices
  • Expected increases in energy costs due to the Russian invasion of Ukraine
  • Since March, the Bank of Canada has raised rates from 0.25% to 3.75%
  • Economists are also predicting another rate increase of 0.50% in December

How this affects Canadian homeowners 55+:

When world events happen at a rapid pace, seemingly all at once (war, price increases, rate increase), Canadians 55+ tend to “freeze-up and do nothing”. Psychologists have identified “Certainty” as one of the “Six Human Needs”. When life becomes uncertain, older homeowners live in fear, and their brain adapts by numbing it in one of two ways:

  1. Settling – These homeowners will tighten their belts and settle for a retirement that’s less than they deserve. Going without eating properly, not travelling, not getting out because it’s too expensive for gas.
  2. Procrastinating – Putting off decisions until “tomorrow”, or “when I have more time” is a classic delay tactic of a homeowner 55+ living in fear. Instead of addressing high interest credit card debt, they’ll wait until collection notices start piling up.

How you can help:

Being a financial expert gives you the privilege of being able to truly make a difference in the lives of your 55+ clients. They’re not going to come into your office and outright tell you they’re struggling financially; most are far too proud to do this. But you can watch for subtle clues, small talk such as “gas prices are going up again on Friday”, or “got another property tax bill to pay this month”, or “boy those credit card companies really stick it to you” are all tiny red flags where you can have a broader conversation about their current financial situation.

Bottom line:

The Ryerson Institute for Aging did a study and found that 93% of Canadians 55+ don’t want to sell their homes, preferring to age in place. House prices have increased by an average of 5.6% per year since 1982, creating many “house-rich” yet “cash-poor” 55+ homeowners. We have options to help these clients.

  • Roland Mackintosh


According to Statistics Canada more Canadians are heading into retirement carrying debt

Did you know that more and more Canadians are heading into retirement carrying debt?

According to Statistics Canada, 42% of households headed by someone 65+ are in this position, with 13.9% paying off a mortgage and 37.4% carrying consumer debt.

This can put retired Canadians in a particularly difficult situation. According to the 2017 Canadian Income Survey, the average retirement income for an individual is just $27,500 and $61,200 for a couple, which can make it hard to pay off debt on top of daily living expenses.

This was the position that one of our clients, Mrs. Jane Smith, found herself in.

The Situation:

Mrs. Smith receives just under $20,000 per year through her OAS and CPP. She also works part-time at a local café where she earns $15 an hour, taking home about $240 per week.

Despite this, she was struggling to make ends meet each month and had gotten into the habit of putting one-off expenses, such as appliance repairs and vacations, on her credit card, which carried an interest rate of 19.99%.

Hoping to maximize her finances, Mrs. Smith came to Arrowsmith Mortgage Corp. and met with mortgage agent, Jody Henry, to discuss her options. Jody reviewed her situation in its entirety and recommended Mrs. Smith take the Income Advantage as a way of increasing her cash flow.

The Solution:

Income Advantage is a reverse mortgage that allows Canadians aged 55+ to access up to 55% of their home’s value in tax-free cash.

A quick calculation by Jody showed Mrs. Smith was eligible for $127,000. She accessed an initial lump sum of $20,000, which she used to pay off her credit card debt and opted to receive the remaining money as monthly deposits of $1,500. This allowed her to increase her monthly cash flow, so she was able to easily cover her monthly expenses and even enjoy the occasional treat without having to resort to credit cards. What’s more, since funds received through Income Advantage are 100% tax-free, they didn’t negatively impact her income by triggering additional taxes or OAS/CPP claw-back.

Income Advantage has a lower interest rate than credit cards (between around 4 and 6%) and requires no monthly repayments.  This frees up even more of Mrs. Smith’s income. She will only have to pay back what she owes when she moves out of her home or passes away and will also maintain full title ownership.

Income Advantage has allowed Mrs. Smith to take advantage of the money in her home while she continues living in it. She is able to enjoy many more years in the home she loves, and if she decides to sell, the remaining equity will be worth more than if she had decided to downsize today.


Please reach out to Jody Henry, Reverse Mortgage Specialist, 250.951.6218, or visit our website for more information.

Aging at Home - Happy Canadian couple 55+ celebrating life with a reverse mortgage

Aging at Home

How a Reverse Mortgage Can Help Canadians with Aging at Home

As we age most of us hope to move through the winter of our lives with grace, integrity and on our own terms. We want retirement to be our way! Reverse mortgages can help make this happen.

A reverse mortgage allows you to stay in the home and retire your way.

Studies have shown that aging at home improves quality of life. Which improves physical health. Aging at home insulates the elderly from bacterial and viral risks found in senior living facilities. A senior’s choice to stay in their home allows them to retire their way on their terms. Aging at home encourages independence and self-care which promotes longevity. This is a safe and healthy option for retirement your way. How do seniors get the financial security needed to retire comfortably at home ~ with a reverse mortgage.

If you are 55+, own your own home and reside in your home you could qualify for a reverse mortgage.

The money received from your reverse mortgage can be used to repay debts, help with regular bills, cover healthcare expenses, use for home repairs or improvements, etc… Your reverse mortgage funds can be taken as a one-time lump sum or take some of the money upfront and take the rest over time. Your reverse mortgage money is tax-free dollars. A reverse mortgage is your opportunity to retire your way!

For more information Contact Jody Henry, Reverse Mortgage Specialist


Aging at Home - Happy Canadian couple 55+ celebrating life with a reverse mortgage

Reverse Mortgage Should I Create a Revenue Rental Suite

Should You Renovate and Create a Revenue Rental Suite?

Home prices and rentals in Canada are increasing at insane rates. Revenue-producing suites are fast becoming a major asset for retiring or retired homeowners for additional revenue streams.

Imagine Being a Renter in Today’s Markets?

Canadian Reverse Mortgage

Canadian Reverse Mortgage

We cannot help but feel empathy for those that are renting homes or suites. Where we live on Vancouver Island rental rates are going through the roof.

Basement suites with two bedrooms are on average $ 1,500.00 a month, a 600 Sq. foot townhouse or apartment around $1,100.00. If you want a full house, you will be looking at a minimum of $2,000.00 and that will not get you an executive, not even close.

Please note these rental rates are based on a small city, not large cities like Vancouver or Toronto.

Revenue Rental Suites

Rental suites are certainly an idea if you would like to create additional income from your home. But what if you do not have enough money, to create a Legal Suite that can cost $20,000.00 to $40,000.00?

Think carefully as to your age and how much equity you have. Let us say your home is paid for and is valued at around $650,000.00.

Taking out a Reverse Mortgage for $40,000.00 (or more if you like) based on a two-room, one bath suite can, in turn, produce $18,000.00 a year. Imagine in only two years you have already almost made your money back. Let us say you continue for another ten years, now you can add another $180,00.00 to your income!

You have not needed to use any high interest borrowed money; you do not have to pay back the $40,000.00 (banks collects from your estate when you pass to the clouds) and you have increased the value of your home a minimum of 40K, and betting that in only a few years it will increase even more.


Rental suites may not be for everyone, however what a great way to help with your retirement income and you still have 100’s of thousands available from your home equity!

There are so many ways a Reverse Mortgage can help us in our retirement years the list is literally endless.

Need help with obtaining your own Reverse Mortgage? Click here for a Free No-Obligation Consultation or Apply Online Now.

Top Five Reasons – How Reverse Mortgage Funds Are Used

Reverse Mortgages in Canada are on the rise as aging baby boomers start to retire. Covid-19 helped accelerate some seniors to get reverse mortgages sooner, however, this trend has been growing Canadian Reverse Mortgagefor years. Going forward the next ten years will bring substantial growth as it increases in popularity.

Not sure what a Reverse Mortgage is? Click on this link to learn more or download our FREE PDF Guide.

While you can use your Reverse Mortgage funds any way you want, here are the most common five reasons.

Reverse Mortgage Reason One – Debt

Growing older, we think carefully about the type of lifestyles we want to live as we head into our senior years. Most want no debt and, in many cases, high-interest-rate loans like credit cards and similar have built up and people want them paid off.

Using a Reverse Mortgage to pay off high-interest loans and consolidating debt is an excellent way to use a Reverse Mortgage.

In many cases, once the high-interest debt is paid out, there are no more monthly payments! That is the beauty of a Reverse Mortgage.

Home Equity Bank states 59% of their Reverse Mortgage customers use it to reduce or remove debt.

Reverse Mortgage Reason Two – Health Care Related

As most Canadians know, although our health care system is one of the highest-rated in the world, there are still many expenses not covered. That could be expensive electric walk-out chairs, wheelchairs, wheelchair ramps, vehicles, personal support workers, and much more.

Home Equity Bank states 40% of their Reverse Mortgage customers use it for health care expenses.

Reverse Mortgage Reason Three – Home Renovations

Millions of Canadians have lived in their homes for many years, seen their children grow up and leave for college or getting married and having children themselves. Or in many cases aging parents need more support from family, leading to the need for a living suite.

As those life events evolve us, our homes need to evolve too. That could mean renovations in the yard, where there is less grass to cut and less yard maintenance.

Some renovate to create a legal suite to rent out for extra monthly revenue.

How about a new garage? Perhaps Dad or Mom is really into motorcycles or cars and wants to tinker in their retirement in the newly renovated garage.

How about a brand-new deck? Relaxing in your own backyard can be a wonderful way to enjoy retirement.

Your home may simply be aging and needs a new roof, painting, new gutters, and more. Canadians do not want to compromise their lifestyle in their own households.

Home Equity Bank states 27% of their Reverse Mortgage customers use it for renovations.

Reverse Mortgage Reason Four – Income Supplement

You can choose to have installments of your Reverse Mortgage funds versus one large payment. In these cases, it is based on people that want to supplement their incomes. Whether there is not enough in retirement savings, CPP or pension, reasons vary.

Lifestyle is a common reason for income supplement, especially after retirement.

Home Equity Bank states 25% of their Reverse Mortgage customers use it to supplement their income.

Reverse Mortgage Reason Five – Living Expenses

It seems every time you go to the grocery store, food prices are up. You go get gas and depending on where you live in Canada your gouged based on the day’s trading value. A new car? Increasing by 10K a year it seems, and the maintenance costs are not going down anytime soon.

These types of living expense increases cause huge amounts of stress on our seniors that deserve to live out their remaining years in dignity.

Further to the use of funds, Home Equity Bank also conducted a study with Deloitte about Senior Canadians in debt in May 2014. The study revealed that within the senior demographic (Canadians 55+), 21% (1.4 million seniors) had a financial need and within this group, 13% (845,000) were actively considering options such as reverse mortgages in Canada. There are 4 main categories of seniors who have this financial need.

Those who:

  • Need to alleviate the stress of debt.”

These customers are very aware of their debt situation and are stressed over the burden of their finances.

  • Need to pay for an unplanned expense.”

These customers had a sudden emergency such as health or house related (leaky roof, flood, etc.) and did not set aside extra money for “just in case”.

  • Want to improve my lifestyle.”

These customers want to incorporate travel, dining out, or even entertainment to improve their lifestyle.

  • Need to maintain my standard of living.”

These customers may have been middle to high-income earners before retirement and are having difficulty sustaining their lifestyle post-retirement.

Although the above 4 categories include the majority of Canadian seniors interested in a reverse mortgage, there are seniors who take out a reverse mortgage for other (less frequent) reasons such as helping family members with an early inheritance, using it as a purchase mortgage, and for investment purposes.

Home Equity Bank states 18% of their Reverse Mortgage customers use it for living expenses.

Take the Next Step – Apply for a Reverse Mortgage Now

Got a question? Just ask. Whatever your reason, it does not matter, Arrowsmith Mortgage is here to help you through every step so you in turn can enjoy the lifestyle you earned!

Apply here.


Pros and Cons of a Reverse Mortgage

Pros and Cons of a Reverse Mortgage

Many homeowners are unaware of what a reverse mortgage is and often assume it may be detrimental to its real purpose, helping seniors enjoy their retirement! This false sense of negativity is often based on how reverse mortgage loans differ in Canada versus the United States from decades past.

Many assume the Bank buys your house, gives you a lump sum payment, and now your homeless! This is not factual in any way in Canada.

This attitude is changing rapidly for seniors as many have challenges in retirement with limited financial resources, yet their home is paid for or has substantial equity.

Reverse Mortgage Pros

  • You do not have to make any regular loan payments.
  • You may turn some of the value of your home into cash, without having to sell it.
  • You do not pay tax on the money you borrow.
  • This money does not affect the Old-Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may be receiving.
  • You still own your home.
  • You may have options as to when and how you receive the money
  • You can pay off debts and/or consolidate debt.
  • You can renovate or repair your home increasing value.
  • You have emergency money for unexpected expenses like medical or emergencies.
  • You can improve or maintain your standard of living.
  • You can pay for a vacation or a special purchase.
  • Financially aid your children/grandchildren.
  • No Health Record Checks Required.
  • You Will Never Owe More Than the Value of Your Home.
  • Reverse mortgages are designed to help Canadians, like you, stay in their home for life.
  • 93% of Canadians want to age at home.
  • Enjoy Retirement!

Reverse Mortgage Cons

  • Interest rates are higher than most other types of mortgages.
  • The equity you hold in your home may go down as you accumulate interest on your loan.
  • Your estate must repay the loan and interest within a set period of time when you die.
  • The time needed to settle an estate may be longer than the time allowed to repay a reverse mortgage.
  • There may be less money in your estate to leave to your children or other beneficiaries.
  • Costs associated with a reverse mortgage may be higher than a regular mortgage or other credit products.

One Choice – Canada’s Only Bank for Reverse Mortgages

Beginning in 1986 the Canadian Home Income Plan (CHIP) began offering reverse mortgages. You can get a reverse mortgage directly through reverse mortgage brokers at the same rates as direct. This approach keeps local brokers with local cash local as it should be!

Click here for a free Reverse Mortgage Consultation, there is no obligation. We can help any homeowners in all of British Columbia!

Reverse Mortgage References








How Do Reverse Mortgage Interest Rates Differ From Standard Mortgages?

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!

What are the Pros & Cons of a Reverse Mortgage?

Reverse mortgages continue to grow in popularity each year because of the unique solution they provide to homeowners 55+ who wish to stay in their homes and access some of their home equity to improve their quality of life.

After all, Canadians are living longer than ever before, so they require more money to support themselves throughout their retirement years.

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.

Following are some pros and cons that are helpful in determining if a reverse mortgage will meet your needs.

Reverse Mortgage Pros:

• Regular payments are not required (although, you can make payments if you wish)
• Income and credit are rarely a factor in qualification
• Funds are tax-free, so current pension or other income is not impacted (including Old Age Security and Guaranteed Income Supplement)
• Money can be used however you want
• Decide how funds are received (lump sum, regular payments or a combination)
• Retain control of your home
• Funds don’t have to be paid back until you sell or leave your home
• No prepayment penalties apply if you pass away and are reduced by 50% if you must sell to move into a retirement facility

Reverse Mortgage Cons:

• Interest rates are higher than typical mortgage rates (sitting around 5-6% in recent years for fixed rates)
• Mortgage setup costs (home appraisal fee, application fee, closing costs, etc.) are deducted from your funds
• May be subject to a penalty if you sell the home within three years of taking out the reverse mortgage
• The amount you borrowed plus interest must be repaid within a limited time frame if you pass away
• Money is repaid to your reverse mortgage lender first, leaving your children or other heirs with less money when you pass away.

Have questions? I can help you decide if a reverse mortgage is the right solution for you or your loved ones.

Helping Provide Seniors with More Mortgage Options!

I’ve been a mortgage broker for the past 25+ years (with an office in Qualicum Beach since 2001), helping clients from all stages of life – from first-time homebuyers to seniors – secure the very best mortgage product and rate catered to their unique needs.

I became a Certified Reverse Mortgage Specialist to better understand and support the growing needs of senior residents since Qualicum Beach has the most seniors over 65 – more than 50% of our population – than anywhere in the country!

Canadians are living longer today than ever before, which means they need more money to support their retirement lifestyle than at any other point in time. Many people want to remain in their family home, but it’s often difficult to afford a comfortable lifestyle when a lot of your money is tied up in your home, not to mention if you lose a spouse.

The CHIP reverse mortgage from HomeEquity Bank offers those who are at least 55 years old and wish to remain in your home a unique option specifically designed to serve your needs.

What makes this solution different from other financing options is that you can access home equity without having to make regular payments. All other lending products that assist homeowners in taking advantage of their home’s equity require regular payments. As well, borrowers must also qualify based on their income and credit score.

But, with a reverse mortgage, you can access up to 55% of the value of your home and your credit is rarely a factor. The reverse mortgage funds are also tax-free, which means your current pension or other income will not be impacted.

5 most popular uses for reverse mortgage funds:

  1. Supplementing retirement income and savings
  2. Paying off debt
  3. Updating or renovating your home to make it more accessible
  4. Taking a dream vacation
  5. Helping children or grandchildren


Have questions? I can help you decide if a reverse mortgage is the right solution for you or your loved ones.