Definition
CHIP (Canadian Home Income Plan) is HomEquity Bank's reverse mortgage product, the leading lender in this segment in Canada. Equitable Bank also offers a similar product (Reverse Mortgage Plus).
How CHIP works: - Available to homeowners aged 55+ - Maximum amount: 55% of the property's appraised value - No monthly payments required — interest accumulates and adds to the balance - The loan is repaid upon property sale, relocation, or death - HomEquity Bank guarantees the balance will never exceed property value (negative equity protection)
CHIP rates: typically 1.5-3% higher than a regular mortgage, compensating for the absence of payments and longevity risk.
Tax impact: CHIP funds are not considered taxable income.