Get to know our enhanced reverse mortgage—the new Reverse Mortgage Flex

Paul von Martels. November 10, 2020

At Equitable, we try hard to keep our product offering simple to understand, but as we introduce more options, questions are bound to arise.

Recently, we added some enhancements to our original reverse mortgage by announcing the Reverse Mortgage Flex.

Let’s begin with why—why did we make changes to our reverse mortgage in the first place? The answer was clear: Canadians needed access to larger loan amounts than we were able to provide.

The Reverse Mortgage Flex allows borrowers aged 55+ to access 15-55% of their home equity. Under this new product, borrowers can now access up to 19% more than they were able to under our original product.

That’s not all. Borrowers can take all the funds up front (Lump-Sum), keep some for a later date, set up scheduled advances, or create some combination of the three. This offers a lot of flexibility to build a solution that fits Canadians’ broad and unique needs.

Product summary

Reverse Mortgage Reverse Mortgage Flex
Loan to home value 15-40% 15-55%
Drawdown options

 

  • Lump-Sum
  • Lump-Sum
  • Ad-hoc draws
  • Scheduled draws
5-Year Fixed Rates1Origination / APR 3.79% / 3.91% 4.39% / 4.50%
Lending areas Urban centres in ON, AB, BC, & QC
Available through
Prepayment charge 5/4/3 months’ interest (Years 1/2/3)

You can explore our rates in more detail here.

We didn’t make this decision lightly. As a publicly traded (TSX: EQB) and federally regulated Canadian bank, just like the one you see on your neighborhood street corner, we needed to be sure that increasing loan amounts wouldn’t put Equitable Bank and its clients at risk.

So we went to our (home) offices, crunched the numbers, and did the research. We spoke to international experts, and used specialized data to project home price growth and forecast lifespans. At the end of the day, the data told us this was the right decision for all of our stakeholders.

But why are Reverse Mortgage Flex rates higher than the original reverse mortgage? In the world of lending, higher loan-to-value ratios (the total loan size as a % of your home value) mean higher risk. Higher risk means higher costs, and therefore, higher rates. It’s a relationship that plays out in many aspects of our lives, not just financial services.

What’s important to note is that Equitable Bank is 100% committed to offering its clients the best value on the market. We’re a challenger bank, and offering smart products at fair prices is an important part of that. We encourage you to compare us to other options, and not just take our word for it.

Want to learn more? That’s what we’re here for—contact us directly or speak to a mortgage broker. Should things progress to an application, great! Applying for a reverse mortgage with Equitable Bank is simple and straightforward, and doesn’t cost a thing. We can’t wait to chat about it.