As economic pressures rise brokers need to know which options make sense for 55+ clients
This article was produced in partnership with HomeEquity Bank
A recent Equifax Canada Market Pulse Quarterly Credit Trends Report found that consumer debt hit new levels amid soaring inflation, reaching $2.3 trillion over the last 12 months with reliance on credit cards rising by 17.5% in the first quarter of 2022. In an effort to control rising prices, the Bank of Canada hiked interest rates by half a percent to 1.5% and economists expect a similar jump next month.
As the cost-of-living continues to rise and Canadians are increasingly turning to debt to cover their expenses, HomeEquity Bank’s CHIP Reverse Mortgage is a timely way to provide relief for clients 55+.
Why suggest debt consolidation?
With increasing economic pressures on Canadians, borrowing money has become a necessary means of keeping up with ongoing expenses whether it’s credit cards to cover monthly bills or a line of credit for a major purchase or unexpected expense. But managing debt from multiple sources with varying interest rates, due dates and payment methods can be stressful. And while debt at any age is a challenge, being plagued by various repayment schedules in one’s retirement years – without a steady income stream – is even more of a concern.
Keeping up can simply become overwhelming, and debt consolidation has become a popular strategy in lessening the demands by rolling multiple high-interest debts into a single sum with lower interest and reduced minimum payments, which makes paying down the debt more efficient and manageable. It’s a great way to help people get out of debt faster while protecting their credit score, but with so many different debt consolidation solutions available it’s difficult to decide on the best option – and that’s where a knowledgeable mortgage broker can make all the difference.
The reverse mortgage advantage
Even before inflation and rising rates, many Canadians were already retiring in debt. This caused people to delay retirement or even “unretire” and head back to work when the situation proved too unmanageable. But the CHIP Reverse Mortgage has proven to be an excellent tool for managing debt for clients who qualify, preserving their homes and the retirement they’ve always dreamed of – and making it well-worth a discussion as to whether it suits your client’s needs.
Homeowners over the age of 55 can access up to 55% of the value of their home in tax-free cash, either as a lump sum or in planned advances, and with interest rates lower than an average credit card, use the funds to consolidate existing debts. The best part? The CHIP Reverse Mortgage does not require your client(s) to make monthly mortgage payments or interest payments. Payment is not required until the homeowners (listed on title) no longer live in their home or they decide to sell their home.
Help clients make the most of retirement
The CHIP Reverse Mortgage helps you help your retired clients 55+ achieve the peace of mind they need to make the most out of their golden years. It minimizes accumulating debt, reduces financial stress and increases disposable income – all without having to make any monthly mortgage payments or sell the home they love.
Show your clients how they can be free to focus on what really matters during their retirement years. Talk to them about using a reverse mortgage as a debt consolidation tool today. Contact a HomeEquity Bank BDM for more information.
HomeEquity Bank has been dedicated to providing Canadian homeowners 55+ with smart and simple solutions for enjoying the retirement they deserve - in the home they love, for over 35 years. It understands helping your clients is your top priority, and HomeEquity Bank is here to help make that happen with a range of products including CHIP Reverse Mortgage, CHIP Max, CHIP Open and Income Advantage.
