Toronto’s Bloom Finance has officially launched its home equity release platform for 55+ homeowners across Ontario.
Bloom looks to simplify the process of accessing home equity through a reverse mortgage, enhancing Canadians’ financial flexibility in retirement.
Following a limited rollout in select markets through the summer, the Bloom Reverse Mortgage is now available in all Ontario markets, and will soon be available in other provinces in Canada.
A reverse mortgage is a unique financial product available to 55+ homeowners, enabling them to access up to 55% of their home value in tax-free funds. Reverse mortgages require no regular principal or interest payments, instead accruing interest over time, with the balance only payable when a borrower moves out, sells the home, or passes away.
Founded in 2019, Bloom is the first fintech entrant to the Canadian reverse mortgage market, with the product historically offered by a small number of specialty banks.
“Canadians over 55 have more than $1 trillion of wealth built up in their homes, but many are retiring without enough savings to maintain their standard of living throughout their full retirement”, said Ben McCabe, founder of Bloom. “Canadians need a simple, comfortable way to access home equity as part of their overall retirement strategy.”
Reverse mortgages have historically been a niche product in Canada, despite their broad acceptance as a mainstream retirement planning tool in other markets like the UK. Rates on reverse mortgages have declined meaningfully in recent years, and in today’s rising home price environment, concerns around equity degradation have dissipated.
“Attitudes are shifting around home equity release solutions, and people are rethinking the idea that a responsible retirement plan means ignoring a fully equitized home. With the rise in home prices in recent years, more and more 55+ Canadians are beginning to realize just how wealthy they are, when they consider their full financial picture.”
Bloom’s inaugural product, the Bloom Reverse Mortgage, simplifies and digitalizes the historically paper- heavy and burdensome process of unlocking equity in the home. The company plans to release a series of product innovations in the coming months to further streamline home equity access.
“Our vision is to make home equity seamlessly accessible as a tool to support retirement”, said McCabe, previously COO of Canadian fintech Thinking Capital. “We believe Canadians have a right to a standard of living in retirement that is aligned with their true wealth, which by definition includes the wealth they’ve built in their homes.”
Photo by Tom Rumble on Unsplash
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