About CHIP Reverse Mortgages

A CHIP Reverse Mortgage is also known as the Canadian Home Income Plan and is a Canadian mortgage product. It is quite different than the American CHIP mortgage. The biggest difference is that you cannot ever owe more than what your home is worth. The only CHIP Reverse Mortgage lender in Canada is HomeEquity Bank. They are a Canadian bank and have been lending to Canadian Seniors for over 25 years. Their product has helped many Canadians over 55 who want to make use of the equity that they have built up in their homes and do not want to sell or move. If you want to access some the cash tied up in your home, this may be a product for you.

Let’s discuss what a Reverse Mortgage is.

1. You do not need to qualify with income. As long as you can afford food and living expense, you will get a Reverse Mortgage. This is different than a typical mortgage where you need to show income in order to get a mortgage.
2. You do not make any mortgage payments. Yes that is correct. NO mortgage payments. The payments are added to your principal, but at no time are you asked to make any payments.
3. You can borrow up to 55% of the value of your home. We will provide you a quick no charge estimate as to how much you actually can get. The final amount is based on the market value established by an appraisal, location of your property and you and you and your partner’s age.
4. You can take a lump sum out, or monthly payments with a lump sum or just monthly payments. We will discuss your options with you and you can decide what is best for you.
5. The only obligation you have, is to owner occupy your home as your primary residence, keep your home in good condition, keep up the property taxes, or defer them, and keep your home insurance up to date.
6. You do not ever have to reapply for the mortgage. Simply choose whatever term you prefer on renewal.
7. If you sell your home you will be required to pay the mortgage out.
8. If you own your home with your partner, and one person dies, they will NOT be required to sell as long as they live in the home.
9. You can use the money for whatever you like such as costs to cover you for in home health care, disability or life events, renovations, investments, property purchase, help the children with education, gift to children, help a family member, business start up or whatever you choose.
10. You will always own your home and the bank does not own it. Title is always in your name.
11. There is a cost to set this mortgage up. Depending on the term you choose, in BC set up fees and legal range from $995 to $1,495. You will have an appraisal cost, which may run around $400. Plus you will require ILA, which is Independent Legal Advice. This can be approximately $200 to $400. Total cost to set this mortgage up can be around $2,300 to $2,500, which may be included in the mortgage amount, so you do not have to pay them out of pocket.
12. You can repay the mortgage at any time. If you pay your mortgage out in full within the first 10 years there is a penalty. After 10 years there is no penalty.
13. Income from a Reverse Mortgage is tax-free and will not impact your CPP, OAS or Supplementary Income.
14. Because you stay in your home, you will benefit from any future increases in your home's value, which may offset some or all of your borrowing costs. 

Contact us for more information about how we can help you get the money to enjoy your retirement years on your terms.

Contact us today to find out if the CHIP Reverse Mortgage is right for you.

Susan Zanders

Certified CHIP Reverse Mortgage Specialist for BC