The Canadian Homeowners’ Problem: Should I take a Reverse Mortgage?
Faculty Member's Name: Chris Robinson
Faculty Member's Email Address: crobinso@yorku.ca
Department/School: School of Administrative Studies
Project Title: The Canadian Homeowners’ Problem: Should I take a Reverse Mortgage?
Description of Research Project
About 2/3 of Canadian families own their own home and the percentage is higher in families headed by a person age 54 and up. Average house prices in cities like Toronto and Vancouver are over $1 million. But fewer than 40% of Canadians have an employer pension and many homeowners are relying on their home equity for retirement income and perhaps helping their children and grandchildren struggling to pay rent.
One method of using that home equity for living costs is a reverse mortgage. The lender provides a percentage of the home value in return for a mortgage that requires no payments but become due when the home is sold. The other methods of unlocking the equity in the home are a home equity line of credit (HELOC) and selling the home to move into a cheaper home or a rental home.
The research will investigate the homeowner’s choice between these options with a focus on the reverse mortgage. Under what family financial conditions is the reverse mortgage the best choice? How should a reverse mortgage feature in advance planning for retirement, starting earlier in the life cycle?
Reverse mortgages have not proven as popular as might be expected, given the rapid increase in house values in most Canadian regions and cities combined with the swelling ranks of retired and soon-to-be retired Canadian families. The research will discuss behavioural reasons for this low demand for reverse mortgages even when they seem on purely quantitative factors to be desirable solutions.
Undergraduate Student Responsibilities
1. The student will determine the companies that offer reverse mortgages in Canada and how they operate. That includes learning and explaining all aspects of how the mortgages operate from both the lender point of view and the borrower point of view.
2. The student will find the statistics on number and value of reverse mortgages issued annually.
3. The student will find data on the transaction costs of valuing the house, setting up the loan contract and the expected cost of the eventual sale of the house.
4. The student will find data sources for the history of house prices. It may prove that this should be limited to one or two of the largest cities.
5. The student will find data sources for average rental costs for three bedroom apartments. It may prove that this should be limited to one or two of the largest cities.
6. The student will find data sources for movement of conventional and reverse mortgage interest rates in Canada during the last 10 years.
7. The student will create case studies/scenarios that represent reasonable situations in which a reverse mortgage would be one of the possible instruments used in pre-retirement and post-retirement planning. The student will use the data collected to plan possible outcomes in retirement of the use of reverse mortgages and the other options to determine when a reverse mortgage would be best choice. The supervising professor will assist this part of the work using his extensive expertise in personal financial planning.
8. The student will write a paper about the findings of the research and prepare a poster summarising the findings for a public event in the fall.
Professor Emeritus of Finance and Senior Scholar Chris Robinson PhD CFPretiredTM CPA,CA has 50 years of education, research, teaching and professional experience in personal financial planning. He has won many awards for his personal finance research. The sixth edition of his textbook came out in 2022. This project will be valuable on the resume of any student who seeks employment in the financial services sector.
Qualifications Required
- Completion of ADMS 3541 with at least 7.0 GPA
- Ideal, but not required: Completion of ADMS 4505 with at least 7.0 GPA
- Basic understanding of mortgage products, interest rates, and financial risk. Familiarity with retirement financial planning, or option-like contracts is recommended.
- Ability to find and analyse Canadian housing price data, interest rate data, and residential rental cost data, and interpret long-term trends.
- Basic ability to prepare Excel spreadsheets.
Interested in this project posting?
Submit your resumé and unique cover letter for this projects to the faculty supervisor. Deadline: February 6, 2026 by 4 p.m.