HomeEquity Bank reverse mortgage originations swelled nearly three-fold within five years
![Leading reverse mortgage lender saw record-high deals last year](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://cdn-res.keymedia.com/cms/images/ca/046/0321_637146891192649223.jpg)
HomeEquity Bank posted record reverse mortgage originations last year, a trend fuelled by vanishing workplace pensions along with much tighter stress tests.
Over 2019, the lender originated $820 million in reverse mortgages, much higher than the $767 million in 2019 and $309 million five years ago.
“Seniors now are taking more debt into retirement and debt is pretty hard to manage on a fixed income,” HomeEquity Bank president and CEO Steven Ranson told the Financial Post.
The bank has made significant strides on its road to establishing itself as the Canadian leader in reverse mortgages, with approximately $4 billion in mortgage outstanding.
This marked the first-ever sale of reverse mortgages by HomeEquity Bank, as well as the first deal of its kind involving reverse mortgages in Canada.
“The thing we liked about it was that it was a third source of funding for us. Being a bank, we have access to the GIC market, we have a small, wholesale-oriented funding program where we sell debt to various institutions, and we just felt . . . that this would be an interesting opportunity for us to reduce the risk for our business,” Ranson said at the time.
“Also, there might potentially be a customer benefit: If we could fund loans on a capital-efficient basis, we’re looking at whether there’s an impact on customers because, possibly, we could lower rates.”