HELOCs, reverse mortgages reach new record highs in June

by Ephraim Vecina13 Sep 2019

Canadian HELOC and reverse mortgage balances have reached unprecedented highs in June, according to latest figures from the Office of the Superintendent of Financial Institutions.

The balance of HELOC debt nationwide was at a record $302.23 billion in June, having grown by 5.37% year-over-year. In recent months, the loan type has been seeing renewed acceleration in growth.

“The 12-month increase is almost twice the pace of growth seen during the same month last year… [although] the growth rate is still below the peak seen in 2017,” Better Dwelling explained in its analysis of the data.

A vast majority of loans secured by real estate was for personal purposes, OSFI records indicated. This segment accounted for $269.06 billion of the June volume, 0.19% higher month-over-month and 3.90% larger annually.

“Growth here is higher than usual, but is the lowest seen since March 2017, before the surge of growth.”

Business loans secured by residential real estate had a proportionally much larger 19.12% annual increase, reaching $33.17 billion in June. This was also 1.66% higher than the month before.

Meanwhile, Canada’s reverse mortgage debt reached a historic peak of $3.74 billion in June.

“This represents an increase of 26.3% compared to the same month last year. That works out to over $778.9 billion in reverse mortgage debt added over the past year,” Better Dwelling stated.

And even though growth in this product type has been slowing down, borrowing among Canadian seniors “is still one of the fastest growing segments of debt.”

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