One lender, explained plainly
CHIP Reverse Mortgage: what it is, what it costs, and when another lender fits better
Published By Ramin Hallaji, mortgage broker
Checked against HomeEquity Bank's own pages on October 16, 2026.
The CHIP Reverse Mortgage is HomeEquity Bank's reverse mortgage for Canadian homeowners 55 and over. You can borrow up to 55% of your home's value, tax-free, with no payments until you sell, move out or pass away. HomeEquity Bank guarantees you will never owe more than the home's fair market value, as long as the property taxes, insurance and upkeep are kept up. Its closing fee is $1,795 for most clients, taken from the money you receive. Ramin places CHIP alongside Equitable Bank, Bloom Finance, Home Trust and Fraction, so this page also tells you when one of those fits better.
Who qualifies
In HomeEquity Bank's own terms:
- You own a home in Canada, and you and your spouse are both 55 or over (so is anyone else on title).
- It is your primary residence: you live in it at least six months of the year.
- It is appraised at $250,000 or more ($300,000 for CHIP Max and CHIP Open, and CHIP Max is offered only in select locations).
- Most homes qualify: detached, semi-detached, townhouses and condos. Second homes and rentals do not.
- Your income and credit score are "not key qualifying factors", in the bank's words.
- CHIP is available in every province, in cities and rural areas, though a rural home may qualify for slightly less. It is not available in the territories.
Ramin arranges CHIP in British Columbia and Alberta. Ontario files are placed through DLC AIMI Collective Mortgage Group (FSRA #13717), which is licensed in Ontario, by our in-house underwriter, who holds an Ontario licence. Ramin structures the deal and runs it from start to finish.
How much you can get
Up to 55% of the home's value. Where you land depends on your age (older usually qualifies for more), the home's appraised value, its type and condition, and where it is. For a couple, CHIP works from the younger spouse's age. The typical range for each age band is in the table on our calculators page, and the calculator shows the balance year by year.
The four CHIP products
CHIP
A tax-free lump sum, with the option of further advances later.
Income Advantage
A lump sum plus monthly or quarterly tax-free advances, for topping up retirement income.
CHIP Max
A larger first lump sum than CHIP, which HomeEquity Bank positions as an alternative to a second mortgage.
CHIP Open
Short-term, with no penalty for repaying the whole loan at any time, and it can be converted to a regular CHIP later (HomeEquity Bank charges $500 plus any applicable taxes for the conversion; from then on CHIP's terms apply, and prepayment charges may too).
What it costs
- Interest: fixed for six months, 1, 3 or 5 years, or variable, which moves with the prime rate. HomeEquity Bank itself says its rates are "approximately 2% higher" than a traditional mortgage or line of credit. We do not print a rate here because rates change; Ramin quotes yours in writing.
- Closing fee: $1,795 for most clients (the bank's range is $1,795 to $1,995), taken from the proceeds. It covers the legal and administrative costs, discharging any existing mortgage (taking it off the title) and registering the CHIP. The old mortgage balance itself is paid from the money you receive.
- Appraisal: about $300–600, paid to the appraiser.
- Independent legal advice: about $300–700, paid to your own lawyer. HomeEquity Bank requires it for every homeowner.
HomeEquity Bank's own estimate of the total to set it up is $2,495 to $3,095 (its closing-cost page puts the appraisal at about $300–400 and the legal advice at $400–700 in that total).
After closing, its published fee schedule (effective April 1, 2024) includes $50 for each extra advance, $150 for a payout statement, and a discharge fee when the loan is repaid: $75 in BC, none in Alberta, $399 in Ontario. Each is plus any applicable taxes, and unpaid fees are added to the balance and charged interest. Every lender's costs, item by item, are on What it costs.
The downsides, plainly
- The balance grows. With no payments, interest is added to the loan and compounds, so the amount owed rises every year. The catch, year by year →
- The rate is higher than a regular mortgage, about 2% by HomeEquity Bank's own description.
- Less is left for your estate. HomeEquity Bank says its clients, on average, still have over 50% of the home's value left when the loan is repaid.
- Repaying early can cost you. Repaying a CHIP early can carry a prepayment charge, depending on your contract and how long you have had it; HomeEquity Bank publishes calculators for it. There is no charge if the last surviving borrower dies, the charge is halved if the last surviving borrower moves into a nursing home, and CHIP Open has no penalty for repaying in full.
- You keep obligations. Property taxes, insurance and upkeep stay yours. Miss them and fees apply on top of any other default charges: $125 a month while a default is reviewed, and $80 a month while the insurance is lapsed, each plus any applicable taxes.
How you pay it back
You make no payments until you sell, move out or pass away. The loan is then repaid from the sale of the home, and everything left belongs to you or your estate. If one of a couple moves out, for example into care, the other can keep living there. If the sale does not cover the balance, HomeEquity Bank covers the difference, as long as the property taxes, insurance and upkeep were kept up (its guarantee excludes administrative expenses and interest that builds up after the loan falls due).
CHIP or another lender?
- CHIP (HomeEquity Bank)
- Most you can borrow
- Up to 55% of the home's value
- A couple's age
- The younger spouse's age
- Where it lends
- Every province, cities and rural areas
- Lender's set-up fee
- $1,795 closing fee for most clients (up to $1,995)
- Equitable Bank
- Most you can borrow
- Up to 59% (Flex Plus, 70 and over)
- A couple's age
- The lower of the average age and the younger spouse's age plus 10
- Where it lends
- Eligible cities and towns in ON, QC, BC and AB
- Lender's set-up fee
- $995 set-up fee
- Bloom Finance
- Most you can borrow
- Up to 55%
- A couple's age
- The average age
- Where it lends
- BC, Alberta and Ontario (lending area restrictions apply)
- Lender's set-up fee
- $1,650 processing fee
- Home Trust
- Most you can borrow
- Up to 60% of equity
- A couple's age
- The youngest homeowner's age, in its online calculator
- Where it lends
- Through brokers across Canada, checked by postal code
- Lender's set-up fee
- $995 set-up fee
| Lender | Most you can borrow | A couple's age | Where it lends | Lender's set-up fee |
|---|---|---|---|---|
| CHIP (HomeEquity Bank) | Up to 55% of the home's value | The younger spouse's age | Every province, cities and rural areas | $1,795 closing fee for most clients (up to $1,995) |
| Equitable Bank | Up to 59% (Flex Plus, 70 and over) | The lower of the average age and the younger spouse's age plus 10 | Eligible cities and towns in ON, QC, BC and AB | $995 set-up fee |
| Bloom Finance | Up to 55% | The average age | BC, Alberta and Ontario (lending area restrictions apply) | $1,650 processing fee |
| Home Trust | Up to 60% of equity | The youngest homeowner's age, in its online calculator | Through brokers across Canada, checked by postal code | $995 set-up fee |
Where CHIP tends to fit best: a smaller town or rural home, and anywhere the other lenders do not reach. Where another lender often advances more: a couple with a large age gap (Bloom and Equitable), and homeowners 70 and over (Equitable's Flex Plus, Home Trust). Under 55, Fraction's no-payment mortgage is the route instead in BC, Alberta and Ontario, and it is also how a home that is partly a shop or office is considered, case by case. Ramin puts the lenders that fit your file side by side, in writing, before you choose.
Asked about CHIP
What is the CHIP Reverse Mortgage?
HomeEquity Bank's reverse mortgage for homeowners 55 and over: up to 55% of the home's value, tax-free, with no payments until you sell, move out or pass away.
What is the downside of a CHIP Reverse Mortgage?
The balance grows because interest compounds, the rate is about 2% above a regular mortgage by HomeEquity Bank's own description, it costs $2,495 to $3,095 to set up by the bank's own estimate, and repaying early can carry a prepayment charge.
How do you pay back a CHIP Reverse Mortgage?
You do not, while you live there. It is repaid from the sale when you sell, move out or pass away, and you never owe more than the home's fair market value as long as the property taxes, insurance and upkeep are kept up.
Can I get CHIP if I still have a mortgage?
Yes, as long as the CHIP pays the existing mortgage off. HomeEquity Bank requires it, and the payoff comes out of the money you receive.
Can I lose my home if I live longer than expected?
No. In HomeEquity Bank's words, you remain the owner and the bank never takes ownership of your home, provided you meet your obligations: property taxes, insurance and upkeep.
Is Reverse Financing part of HomeEquity Bank?
No. Reverse Financing is the reverse mortgage desk of Mortgage Guru Financial, an independent brokerage. Ramin places CHIP and four other lenders' products and recommends whichever fits your file.
Sources, read October 16, 2026: HomeEquity Bank: CHIP Reverse Mortgage · HomeEquity Bank: The CHIP Program · HomeEquity Bank: Frequently Asked Questions · HomeEquity Bank: Reverse mortgage eligibility · HomeEquity Bank: Cost of a reverse mortgage · HomeEquity Bank: Closing costs · HomeEquity Bank: Fee schedule (effective April 1, 2024) · HomeEquity Bank: Prepayment charges. The Equitable Bank, Bloom Finance and Home Trust rows repeat the lender pages cited on What it costs, except the couple's-age rules for Equitable Bank and Bloom Finance, which come from their September 2026 notices to brokers and are noted on our calculators page. CHIP, CHIP Open, CHIP Max and Income Advantage are products and trademarks of HomeEquity Bank. Reverse Financing is the reverse mortgage desk of Mortgage Guru Financial, an independent brokerage, and is not HomeEquity Bank.
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