Researchers analyzed data from 1998 to 2016 regarding wealth and income; housing tenure; health status; and detailed socio-demographic characteristics. The study followed respondents from before the onset of one of four costly diseases (diabetes, heart disease, lung disease or cancer) through 2016 or when they exited the sample.

The study found that older adults struggle to control disease following a health shock. Twenty-seven percent of adults aged 65 and older at the time of diagnosis have biomarkers that indicate that the disease is not adequately controlled in subsequent periods. For these individuals, out-of-pocket annual health expenditures increase by more than $2,126 per year. This increase in health expenditures is not offset by an increase in earnings, because earnings remain flat post diagnosis.

Mortgage borrowing reduces the probability of a disease being uncontrolled. An additional $10,000 in new mortgage borrowing is estimated to reduce the likelihood of the disease being uncontrolled by 9.3 percentage points — a 33 percent decrease in the base rate of not controlling a disease.

"It is not the stock of home equity but the extraction of home equity, particularly through borrowing, which is associated with the ability to manage a disease," the report concluded. "This finding has important implications for public policy and the role of home equity as a resource to enable economic security and well-being in older age.

"Borrowing through a new mortgage is not accessible to all older adults. Some homeowners are constrained by their existing levels of mortgage debt and lack of liquidity for monthly payments. Future policy and market innovations could consider pathways to increase access safely and effectively to home equity for older homeowners.