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CHIP Reverse Mortgage at a glance

HomeEquity Bank, the company behind CHIP Reverse Mortgages, is one of only two financial institutions in Canada that offer reverse mortgages.

CHIP Reverse Mortgage key features

CHIP Reverse Mortgage types

A reverse mortgage is a loan that allows homeowners over age 55 to access equity in their home tax-free without selling the home.
HomeEquity Bank is one of two banks in Canada that offer reverse mortgages, and the CHIP Reverse Mortgage is its most popular option.
HomeEquity Bank began offering reverse mortgages in 1986 under its previous name, CHIP (which stands for Canadian Home Income Plan).
The bank managed more than $6 billion worth of reverse mortgages as of January 2023.

The CHIP Reverse Mortgage is just one of the reverse mortgage products offered by HomeEquity Bank. Others include:

CHIP Max.
CHIP Open.
Income Advantage.

CHIP Reverse Mortgage review

Originally called the Canadian Home Income Plan, this loan was rebranded as the CHIP Reverse Mortgage as HomeEquity Bank added more reverse mortgage products. Although HomeEquity Bank is a Schedule 1 Canadian Bank, it’s one of only two banks in the country that offer reverse mortgages.

Reverse mortgages aren’t like traditional mortgages, in which you borrow money to help you purchase a home. To get a reverse mortgage, you must already own a home.

A reverse mortgage allows you to borrow money from the equity you’ve built up over the years you’ve owned your home. You can access up to 55% of your home equity as either a lump sum or an initial advance with additional payments spread out over time.

As a direct lender, HomeEquity Bank offers a variety of reverse mortgage products, but the CHIP Reverse Mortgage is easily the most popular option. Interested prospective borrowers can apply online or call HomeEquity Bank to get an estimate based on the value of their home.

Any funds borrowed through a reverse mortgage are tax-free, so it’s a potential way for older Canadians to use their home equity to pay off debt, cover medical expenses, pay for renovations and more. However, it’s important to consider the pros and cons of reverse mortgages before signing up so you understand whether this type of loan is the best fit for your needs.

Who is a CHIP Reverse Mortgage best for?

A CHIP Reverse Mortgage may be a good choice for homeowners over the age of 55 with good credit who would like to turn their home equity into cash without selling or refinancing.

If you meet eligibility requirements, are physically able to maintain and repair the home, and you have the financial ability to pay your property taxes and home insurance premiums, a reverse mortgage may be a worthy alternative to a second mortgage. As with all mortgage application processes, HomeEquity bank will check your credit, and your score will influence the decision to approve you or not.

CHIP Reverse Mortgage feature overview

Variety of mortgages

HomeEquity Bank, the company behind CHIP Reverse Mortgages, is one of only two financial institutions in Canada that offer reverse mortgages.

In addition to the CHIP Reverse Mortgage, HomeEquity Bank offers a few additional products, such as the IncomeAdvantage, CHIP Max and CHIP Open. These loans or reverse mortgages are designed to help homeowners aged 55+ get tax-free cash from the equity in their homes without having to sell.

Ease of application

HomeEquity Bank offers estimates for a CHIP Reverse Mortgage both online and by phone. The online process will ask for your home value and address, along with your name and phone number. It will provide an estimated potential reverse mortgage amount, and a representative from HomeEquity Bank will contact you with a more detailed quote. If you’d like to apply, they will help you complete the application process.

If you prefer, you can call 1-866-758-2447 to speak to a reverse mortgage specialist for more information.

Loan amounts & terms

Reverse mortgages allow homeowners to access up to 55% of the current value of their home without selling it. The amount you borrow is tax-free and does not affect your Old-Age Security or Guaranteed Income Supplement benefits. You’ll pay back the money when you eventually move out of your home or sell it. If you die while still living in your home, your estate will pay back the reverse mortgage.

CHIP Reverse Mortgages are available on fixed or variable terms of six months to five years. The variable rate is determined by the HomeEquity Bank prime rate, which fluctuates with the Bank of Canada benchmark rate.

Reverse mortgage rate transparency

CHIP Reverse Mortgage rates are displayed clearly on the company’s website, chip.ca. The rates page shows the current fixed and variable rates, as well as the annual percentage rate (APR) and closing and administrative costs. However, the rates you’re offered will vary based on your age, home value and location.

HomeEquity Bank makes an effort to be transparent about how reverse mortgages work. The company makes it clear that the interest rates offered on a CHIP Reverse Mortgage are higher than traditional mortgage rates. They also state that the balance of the loan and the amount of interest incurred will increase over time.

Reverse mortgage rate types

HomeEquity Bank offers both fixed- and variable-rate reverse mortgages. The variable rate shown on the website is 2.7% plus the HomeEquity Bank prime rate, though the rate you’re offered may vary based on your age, home value and location. Fixed rates vary based on these factors and the term you choose.

Reverse mortgage fees

Before you’re approved for a CHIP Reverse Mortgage, you’ll need to pay for a home appraisal and for independent legal advice. HomeEquity Bank requires an appraisal to confirm your home’s current value, and requires all reverse mortgage applicants to speak with a lawyer about whether a reverse mortgage is a good option for their needs. Appraisal and legal fees vary based on your location and provider.

Once your application is approved, your CHIP Reverse Mortgage comes with a closing and administrative fee of $1,795, though the website notes that the fee may vary based on your application details. This amount is taken from the funds provided as part of the reverse mortgage.

A prepayment charge may apply if you pay back your reverse mortgage before you move, sell your home or die. However, you may be allowed to make a prepayment of 10% of your outstanding principal and interest without being charged. Prepayment fees may also be reduced if you move to a long-term care facility..

Before you commit to a reverse mortgage, ask the specialist to explain how prepayment fees work for your agreement. If you’ve already taken out a reverse mortgage and are interested in prepayment, contact HomeEquity Bank to ask about potential charges and ways to minimize or avoid them.

Security & safety

When collecting your information, HomeEquity Bank adheres to the Personal Information Protection and Electronic Documents Act (PIPEDA), which is Canada’s federal privacy legislation.

In addition, as a financial institution, HomeEquity Bank must adhere to the Bank Act. Under this legislation, HomeEquity Bank cannot take advantage of people, use pressure tactics or provide false or misleading information.

» MORE: Read our comprehensive guide to reverse mortgages

Customer satisfaction ratings

Based on NerdWallet analysis of satisfaction scores on several customer review websites, it’s likely that most customers are satisfied with their experience of getting and having a CHIP Reverse Mortgage from HomeEquity Bank. Keep in mind that the reviews aren’t verified and may not accurately reflect the average opinion of CHIP customers; for example, happy or unhappy customers may be overrepresented in these reviews. Nevertheless, these sites are one way to learn about possible downsides to consider.

CHIP Reverse Mortgage had a Trustpilot rating of 4.8 out of 5 possible stars based on more than 1,200 customer reviews, as of this writing.
CHIP Reverse Mortgage had 3.91 out of a possible 5 stars on the Better Business Bureau website, as of this writing. However, this rating was based on only 11 reviews. CHIP Reverse Mortgage is not accredited by the BBB itself.

CHIP Reverse Mortgage eligibility requirements

To qualify for a CHIP Reverse Mortgage, you’ll need to meet the following requirements:

You must be a Canadian homeowner.
The home must be your primary residence.
All homeowners on the title must be at least 55 years old.
The value of your home must be at least $250,000.

In addition, HomeEquity Bank will also consider the following criteria before approving your application:

Type of home (detached house, condo, etc).
Location.
The amount of equity you have.
The condition of your home.

HomeEquity Bank offers a reverse mortgage calculator on its website that allows you to quickly see how much a reverse mortgage could allow you to borrow based on your age, postal code, city, home type and estimated value. However, the actual amount offered to you will vary based on the details of your application.

A CHIP Reverse Mortgage is not available to homes in the Northwest Territories, the Yukon and Nunavut.

How to apply for a CHIP Reverse Mortgage

You can’t apply for a reverse mortgage with HomeEquity Bank online. To do that, you’ll have to call the bank (1-866-758-2447) to speak with a mortgage specialist. You can, however, get a free estimate of how large a reverse mortgage you might qualify for.

Where to find the application

Get started

Complete your application

When you reach the HomeEquity Bank website, hover over the “Products” tab and click “Our Products.”

On the following page, click either “Reverse Mortgage” or “CHIP Reverse Mortgage.”

At the top of the next page, click “Get My Estimate”.

Enter a few details about your home (address, estimated value) and yourself (age, contact information) and you’re all done.

CHIP stands for “Canadian Home Income Plan,” which was the original name of the popular reverse mortgage product offered by HomeEquity Bank.

One of the primary drawbacks of all reverse mortgages is that they come with relatively high interest rates that will be in effect for as long as a loan is active.

Selecting the right reverse mortgage provider is a big decision — even with a limited number of options. You’ll need to do some research, make a list of what’s important to you, and spend some comparing the following:

Rates: Will you choose a fixed interest rate or variable? And how competitive are the rates offered by the reverse mortgage provider you’re considering? With only two major players in Canada’s reverse mortgage industry, it may make sense to get quote from both.
Fees: Both of Canada’s largest reverse mortgage providers charge set-up fees and prepayment penalties. You’ll want to know how these fees work and how much you’ll be paying in both instances.
How much you can borrow: Both of Canada’s major reverse mortgage providers follow general guidelines about how much of your home equity you can access.
How you’ll receive your reverse mortgage funds: Will it be as a single lump sum or as a combination of an initial advance and smaller payments spread out over time? There are pros and cons to both; be sure the lender you choose can explain them to you clearly.

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