Who Is HomeEquity Bank?
HomeEquity Bank is a Schedule I Canadian chartered bank headquartered in Toronto. It has been offering reverse mortgages under the CHIP brand (Canadian Home Income Plan) since the mid-1980s, making it the longest-standing reverse mortgage provider in the country. HomeEquity Bank is federally regulated by OSFI (the Office of the Superintendent of Financial Institutions), which provides an additional layer of oversight and consumer protection that non-bank lenders cannot offer.
CHIP dominates the Canadian reverse mortgage market. Its national footprint — all 10 provinces including rural and remote areas — means it is the default option for borrowers outside the four urban-heavy provinces served by Equitable Bank and the three provinces served by Bloom Finance. For borrowers in Manitoba, Saskatchewan, Nova Scotia, New Brunswick, Prince Edward Island, or Newfoundland & Labrador, CHIP is the only reverse mortgage lender available.
The 4 CHIP Products
HomeEquity Bank offers four distinct reverse mortgage products, each designed for a different borrower need. Understanding the differences is critical to choosing the right one.
1. CHIP Reverse Mortgage (Flagship)
The standard CHIP product is the most flexible option. It allows lump-sum advances, scheduled advances, or a combination of both. The 5-year fixed rate is approximately 7.24%, and borrowers can access up to 55% of their home value (up to 59% through certain broker relationships). Minimum home value is $200,000.
This is the product most Canadians think of when they hear "reverse mortgage." It works well for borrowers who need a significant amount of equity now but may also want the option to draw additional funds in the future through scheduled advances.
2. CHIP Max
CHIP Max is designed for borrowers who need to access a larger portion of their equity. It offers a higher loan-to-value ratio — up to 59% standard, and up to 65% through preferred broker channels. The minimum home value is higher at $300,000, reflecting the larger loan amounts.
CHIP Max is the right choice when borrowers need to pay off an existing mortgage, consolidate significant debt, or fund a major renovation. The higher LTV makes it possible to access more equity than the standard product, but rates may be slightly higher to reflect the increased risk to the lender.
3. CHIP Open
CHIP Open is a 6-month bridge product with no prepayment penalty. This makes it unique among Canadian reverse mortgages — every other product from every lender carries some form of prepayment penalty within the term.
CHIP Open is ideal for homeowners who are:
- Selling their home and need bridge financing while waiting for the sale to close
- Waiting for an inheritance, insurance payout, or other financial event
- Downsizing and need equity from their current home before purchasing a new one
- Testing whether a reverse mortgage is right for them without committing to a 5-year term
The minimum home value is $300,000, and the advance is lump-sum only (no scheduled advances). Because it is a short-term product, the rate may be higher than the standard 5-year fixed — but the absence of prepayment penalties offsets this for borrowers who plan to repay quickly.
4. Income Advantage
Income Advantage converts home equity into a tax-free income stream through scheduled monthly or quarterly advances. The minimum advance is $1,000 per month or $3,000 per quarter. The 5-year fixed rate is approximately 7.29%.
This product is designed for retirees who need to supplement their monthly income — whether to cover living expenses, healthcare costs, or simply maintain their lifestyle. Because funds are drawn over time rather than all at once, borrowers accrue less interest in the early years compared to taking a single lump sum.
Important: Reverse mortgage income does not count as taxable income and does not affect Old Age Security (OAS), Guaranteed Income Supplement (GIS), or Canada Pension Plan (CPP) benefits. This makes Income Advantage one of the most tax-efficient ways for Canadian seniors to supplement retirement income.
CHIP Rates and Fees
CHIP's rates are competitive but generally not the lowest in the market — Equitable Bank's Flex products consistently undercut CHIP on rate. However, CHIP's broader geographic coverage and more flexible product lineup make it the right choice for many borrowers despite the rate premium.
| Product | 5-Year Fixed | Min Home Value | Max LTV |
|---|---|---|---|
| CHIP Reverse Mortgage | ~7.24% | $200,000 | 55% (up to 59% with certain broker relationships) |
| CHIP Max | Contact for rate | $300,000 | Up to 59% standard; up to 65% through preferred brokers |
| CHIP Open | Contact for rate | $300,000 | Portion of equity |
| Income Advantage | 7.29% | $200,000 | 55% |
Setup fees range from $1,795 to $2,995 depending on the product and loan amount. These fees cover the appraisal, legal review, and administration costs. In addition, borrowers must obtain independent legal advice (ILA) — a legal requirement for all Canadian reverse mortgages — which typically costs $300–$700 depending on the province.
Provincial Availability
CHIP is the only reverse mortgage lender available in all 10 Canadian provinces:
- Full competition (3 lenders): Ontario, British Columbia, Alberta
- Two lenders: Quebec (CHIP + Equitable Bank)
- CHIP only: Manitoba, Saskatchewan, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland & Labrador
If you live in one of the six CHIP-only provinces, HomeEquity Bank is your sole reverse mortgage option. This does not mean you should skip the comparison process — a mortgage broker can still negotiate on your behalf and ensure you receive the best possible terms within CHIP's product lineup.
Rural and Remote Properties
One of CHIP's strongest advantages is its willingness to lend on rural and remote properties. Equitable Bank restricts lending to urban areas only, and Bloom Finance focuses on Ontario, BC, and Alberta without specifically targeting rural markets. CHIP has no such restriction.
If your property is on a large acreage, in a small town, or in a remote community, CHIP is likely your only reverse mortgage option. HomeEquity Bank has decades of experience appraising and lending on non-urban properties across Canada, which gives them a depth of underwriting knowledge that newer entrants lack.
Prepayment and Penalties
Prepayment penalties apply to the standard CHIP, CHIP Max, and Income Advantage products within the 5-year term. The exact penalty depends on the remaining term and current rates — similar in structure to a conventional mortgage prepayment penalty.
The exception is CHIP Open, which carries no prepayment penalty at all. If you expect to repay the loan within 6 months — for example, because you are selling your home — CHIP Open is the only penalty-free reverse mortgage product in Canada.
No-Negative-Equity Guarantee
CHIP, like all Canadian reverse mortgage lenders, offers a no-negative-equity guarantee. This means you (or your estate) will never owe more than the fair market value of your home at the time of sale, provided you have met all loan obligations (maintaining the property, paying property taxes, keeping insurance current).
This guarantee protects borrowers and their families from the scenario where accumulated interest causes the loan balance to exceed the home's value — a fear that prevents many Canadians from considering a reverse mortgage. In practice, Canadian home values have historically appreciated at a rate that exceeds reverse mortgage interest, making negative equity extremely rare.
Who Is CHIP Best For?
CHIP is the right choice for borrowers who:
- Live in a rural or remote area — CHIP is the only lender that serves these properties
- Live outside ON, BC, AB, or QC — CHIP is the only lender in 6 provinces
- Need income replacement — Income Advantage provides a tax-free monthly or quarterly income stream
- Need short-term bridge financing — CHIP Open's 6-month term with no prepayment penalty is unique in Canada
- Want the security of a federally regulated bank — HomeEquity Bank is a Schedule I bank regulated by OSFI
- Need maximum flexibility — CHIP's product lineup is the broadest in the market
How CHIP Compares
CHIP's rates are typically higher than Equitable Bank's and Bloom Finance's. If you live in an urban area in Ontario, BC, Alberta, or Quebec and your primary goal is the lowest rate, Equitable Bank's Flex Lite (starting at 6.44%) or Bloom's Lifetime Fixed-Rate (6.69% locked for life) may be better options. See our side-by-side comparison for full details.
However, CHIP's combination of national coverage, rural property acceptance, four distinct product types, and Schedule I bank backing makes it the most versatile reverse mortgage lender in Canada. For many borrowers — especially those outside major urban centres — CHIP is the clear and often the only choice.