Senior’s Money International goes to Canada

Posted by charles dennis

August 30, 2007

The growing demographic category of elderly homeowners has drawn a New Zealand-based reverse mortgage company to Canada to compete with Canadian Home Income Plan, which has a monopoly in the market.

Canadian Home Income Plan is a subsidiary of publicly traded Home Equity Income Trust, which also operates CHIP Mortgage Trust.

Privately held Senior’s Money International operated in Australia, New Zealand, Ireland, Spain, Headquartered in Mississauga, Seniors Money Canada will initially offer its reverse mortgage product in Southwestern Ontario, with lower interest rates than its rival.

It plans to expand nationally next year, to tap into Canada’s burgeoning population of seniors.

According to a 2006 Statistics Canada report, there are 4.3 million people aged 65 and over in Canada, an increase of more than 446,700 or 11.5 from 2001. This is nearly four times as many seniors as in 1956, and many are homeowners.

With a reverse mortgage, the homeowner uses the equity in a property as collateral for a loan. Unlike normal mortgages, however, the property owner doesn’t make payments on the mortgage until they or their estate sells the house.

Reverse mortgages advocates suggest they are a way for older homeowners to tap the market value of their property without moving. Critics argue they can be an expensive form of debt.

Gary Krikler, the chief financial officer for Home Equity Income Trust said the launch of Senior’s Money International has been expected for quite some time.