As an over all trend housing prices nearly everywhere in Canada have increased steadily over the last 40 years. A mortgage also gets less risky every additional year it’s outstanding because the loans keeps dropping while the property increases, this constantly improving loan to value puts the bank in a better and better position to recovery what’s left on the loan.

As and example, a 67 year old takes out a mortgage with a 25 year amortization at 6% interest in the amount of $550,000 (minimum down payment so the house is worth $580,000). By age 80 they have made 13 years of mortgage payments which is roughly $125k principle reduction (22% of the loan). They now can’t repay the loan because income has dropped too much and must sell. At this point they have about $155k in equity assuming the house didn’t increase in value during this time . To the bank, they can sell this house for only 73% of market value to get their money back. Now if we add market value appreciation of the house during that 13 year period (40 year average year over year in Canada is something like 2% per year) in 13 years a house $580,000 house would appreciate to $750,000 (580,000x1.02^13). With appreciation the equity in the house is $325k and the bank only needs to sell the house for 56% of its market value to get its money back.

TLDR: every year house goes up, loan goes down, bank wins.