Home Equity Line of Credit in Canada vs. Reverse Mortgages
In our business, we are constantly approached with questions about how reverse mortgages work and how they compare to Home Equity Lines of Credit (HELOCs). HELOCs are the most closely comparable products in Canada and many believe them to be superior to reverse mortgages. But many Canadians look at only two things and assume HELOCs are better in every situation: (1) lower interest rates; and (2) the flexible access to cash. Most are forgetting some of the other features and benefits that they should compare before deciding. Below is a chart that lets you see the bigger picture between these two rival products.
Generally, whether you choose a HELOC or a reverse mortgage, tapping into your home equity is a big decision that needs to be discussed with your family. However, having the extra money in one’s later years, when health issues and home retrofitting are needed the most, can make a big difference in our clients’ quality of life.
