Reverse mortgages vs HELOC’s..
How does paying 6.59 per cent interest on a mortgage grab you? If that sounds high, it should, because Canada’s average five-year fixed mortgage is only 3.47 per cent.
Yet thousands of seniors will pay that higher 6.59 per cent in a reverse mortgage, a loan secured against home equity where you make no payments until you move or sell your home.
At those rates, a reverse mortgage doubles in size every 11 years. That’s why anyone who needs this kind of loan should first review the alternatives, particularly a home equity line of credit (HELOC), if they can qualify for one.