What is a CHIP Reverse Mortgage?
A CHIP Reverse Mortgage is a Canadian financial solution that benefits Canadian homeowners. The CHIP Home Income Plan, now called a CHIP Reverse Mortgage, has been available to Canadian homeowners since 1986 and is provided by HomEquity Bank, a Schedule 1 Canadian Bank.
It’s a financial solution designed for senior Canadian homeowners. Features include:
- You can access up to 55% of the value of your home
- You always maintain ownership of your home and never have to move or sell
- The full amount only becomes due when you & your spouse pass away, when your home is sold, or if you decide to move
- You can receive your tax-free cash over time or one lump sum
Does not affect your CPP, OAS, RRIF, or other benefits!
- There are no payments required
- If at any time you would like to repay the principal and interest in full or switch to paying interest on an annual or monthly basis, you can do that too (pre-payment charges may apply)
With close to 30 years of offering reverse mortgages, 99% of clients have equity remaining in the home when the loan is repaid. Below is an example illustrating the preservation of equity over a 15-year period.
This chart is an illustration for a client who owns a $300,000 home and took a lump sum of $100,000 with their CHIP Reverse Mortgage. The chart shows how the client maintains a large portion of equity in the home.
This is due to HomEquity Bank’s conservative lending practices combined with typical home appreciation, as well as a low interest rate environment.
Contact Mark Brennan, Certified Reverse Mortgage Specialist for Reverse Mortgages to find out more!
The Financial Consumer Agency of Canada (FCAC) also published a tip sheet article on their website with some good points to review, titled Understanding Reverse Mortgages.