{"id":806401,"date":"2026-07-16T20:48:10","date_gmt":"2026-07-16T20:48:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/806401\/"},"modified":"2026-07-16T20:48:10","modified_gmt":"2026-07-16T20:48:10","slug":"why-canadas-reverse-mortgage-rates-are-falling","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/806401\/","title":{"rendered":"Why Canada\u2019s reverse mortgage rates are falling"},"content":{"rendered":"

Reverse mortgage rates have fallen across Canada, but the latest cuts were not triggered by the Bank of Canada and were less directly tied to bond-market movements than conventional mortgage rates.<\/p>\n

In late June, Equitable Bank<\/a> lowered the 5-year fixed rate on its Flex Lite reverse mortgage from 6.44% to 6.23%. Days later, Bloom Financial<\/a> cut the rate on its equivalent product from 6.59% to 6.33%. HomeEquity Bank<\/a> followed, lowering its 5-year fixed reverse mortgage rate from 6.64% to 6.39%, while Home Trust<\/a> lowered the 5-year fixed rate on its EquityAccess reverse mortgage to 6.23%.<\/p>\n

The reductions were also reflected across shorter fixed terms and adjustable-rate products.<\/p>\n

\u201cWhat we are seeing across the Canadian landscape right now is a market shift brought about by a combination of changing market conditions and improved institutional funding costs,\u201d Yvonne Ziomecki-Fisher, chief customer, brand and advice officer at HomeEquity Bank, said in a statement provided to Canadian Mortgage Trends.<\/p>\n

\u201cIt\u2019s created a unique window, and we are moving fast to pass those savings directly to homeowners.\u201d<\/p>\n

Ziomecki-Fisher said HomeEquity aims to help Canadians aged 55 and older remain in their homes as they age. \u201cBy moving quickly to adjust our rates downward, we are ensuring that unlocking home equity isn\u2019t just a secure option, but an attractive, modern and highly accessible wealth-management solution for older Canadians looking to secure their financial independence.\u201d<\/p>\n

Canadian Mortgage Trends also contacted Equitable Bank, Home Trust and Bloom Financial, each of which declined to comment.<\/p>\n

How reverse mortgage rates are set<\/p>\n

Reverse mortgage rates do not necessarily track Government of Canada bond yields or Bank of Canada decisions as closely\u2014or as quickly\u2014as conventional mortgage rates.<\/p>\n

Pricing also reflects each lender\u2019s funding structure, hedging costs, capital requirements, expected loan duration and competitive strategy. Because borrowers generally do not make regular principal or interest payments, reverse mortgages also carry different duration and repayment risks than conventional mortgages. Those factors can make pricing changes less frequent and less uniform.<\/p>\n

\"TracyTracy Valko<\/p>\n

A stable interest-rate environment and lower market funding costs can still make it cheaper for lenders to finance their portfolios. However, brokers who spoke with CMT said competitive positioning appears to play an unusually large role in determining when reverse mortgage providers reprice.<\/p>\n

\u201cThey\u2019re not going to be so quick to make changes on their rates, because they don\u2019t have to be,\u201d said Tracy Valko of Valko Financial. \u201cThere are only four lenders and there isn\u2019t huge competition, so if they\u2019re all not moving their rate, then none of them has to.\u201d<\/p>\n

Before the latest round of reductions, none of Canada\u2019s four reverse mortgage lenders had adjusted its rates since the fall, when each cut rates by similar amounts within a relatively short period.<\/p>\n

A similar pattern occurred in March 2025, when the three reverse mortgage providers operating at the time lowered their rates to nearly identical levels within days of one another.<\/p>\n

\"RonRon Butler<\/p>\n

Ron Butler of Butler Mortgages said the small number of providers means a meaningful rate reduction by one lender can quickly force competitors to respond.<\/p>\n

\u201cIf one decides, \u2018I think I\u2019m going to use a rate reduction as my edge and be a quarter of a percentage point lower than everybody else,\u2019 the other players in the marketplace must match or exceed it,\u201d he said.<\/p>\n

Barring an economic shock that materially changes lenders\u2019 funding costs, Butler expects reverse mortgage rates to decline gradually, with reductions largely driven by providers seeking a pricing advantage.<\/p>\n

As awareness and use of reverse mortgages increase, he expects lenders to engage in a \u201cslow crawl to the bottom at a very leisurely pace,\u201d driven by periodic bouts of price competition.<\/p>\n

Not your parents\u2019 reverse mortgage market<\/p>\n

The competition now putting occasional downward pressure on reverse mortgage rates is relatively new, reflecting growth in both demand and the number of providers.<\/p>\n

The Canadian Home Income Plan introduced the country\u2019s first reverse mortgage in 1986 and is now offered exclusively through HomeEquity Bank. It remained Canada\u2019s sole reverse mortgage provider until Equitable Bank entered the market in 2018. Bloom Financial followed in 2021<\/a>, while Home Trust launched<\/a> its EquityAccess reverse mortgage in October 2025.<\/p>\n

\u201cWhen I first got into the business 31 years ago, everybody said, \u2018This is going to be a real growth product,\u2019 and then nothing happened,\u201d Butler said. \u201cIt took the boomers getting older for it to go from a very niche, tiny product to the $11 billion in outstanding balances we have today.\u201d<\/p>\n

Demand has grown alongside greater awareness of the product and the aging of Canada\u2019s population. According to Statistics Canada<\/a>, 19.5% of the population was aged 65 or older as of July 1, 2025.<\/p>\n

\u201cNow that we\u2019ve got four lenders, there\u2019s going to be more competition,\u201d Valko said. \u201cThe reverse mortgage lenders are now calling us with rate specials, and we never had that before.\u201d<\/p>\n

Visited 1 times, 1 visit(s) today<\/p>\n

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