Reverse Mortgages in Canada: What’s the story

Bill Fraser • October 8, 2018

In an effort to draw awareness to the growing need for reverse mortgages in Canada, HomEquity Bank is releasing a series of articles about reverse mortgages in Canada to elaborate on how the product can benefit Canadian Seniors and clear up some common misconceptions. Here, to kick off this series of articles is our feature article on what is a CHIP Reverse Mortgage and what are the benefits?

Unlike our American neighbours, when Canadians explore the option of a reverse mortgage, there is only one provider, HomEquity Bank. In America, there are many companies who offer a reverse mortgage and as a consumer, on top of familiarizing yourself with the concept, you also have to research the best interest rates, read the fine print and compare them to a reverse mortgage provider that best caters to your situation.

In Canada, it is much easier since, HomEquity Bank, is the only provider of Reverse Mortgages. However, Canadians are encouraged to familiarize themselves with the concept of a reverse mortgage and understand how the product works in order to determine if it is the best option for their financial situation. One way to do this is to get a free estimate of how much money you can get with a CHIP Reverse Mortgage. This estimate is based on your profile and home condition. You can also find out some of the frequently asked questions about reverse mortgages in Canada.

To get you started in your understanding of a Reverse Mortgage in Canada, below is some basic information about the CHIP Reverse Mortgage.

What is CHIP?

CHIP is the name of HomEquity Banks’ reverse mortgage product. It is a loan secured against the value of your home. It allows you to unlock up to 55% of the value of your home without having to sell or move. The money you receive is tax-free and you can use it towards any of your personal needs such as:

  • Pay off debts/Consolidate debt
  • Home renovations and repairs
  • Unexpected expenses (medical, emergency)
  • Financially aid your children/grandchildren
  • Improve or maintain your standard of living
  • Pay for a vacation or a special purchase

Who is eligible for CHIP in Canada?

  • Canadian Homeowner (own your home)
  • Your home is your primary residence
  • Age 55 or older

Why CHIP (benefits)?

  • No Health Checks

There are loans that require a health check to ensure that the recipient(s) (of the loan) are in good health to pay off the loan. With a reverse mortgage, since there are no regular monthly payments required until the homeowner(s) move, sell or pass away, health checks are not a requirement.

  • Keep Your Home And Maintain Ownership Of Your Property

Many people often ask whether the property title of the home gets transferred to the bank once the reverse mortgage is approved. The bank simply loans you a percentage of the value of your home in tax-free cash, but the title and ownership of the property remains yours. However, this means you must continue to pay your property taxes and maintain your home so that it remains in good condition.

  • No Regular Monthly Payments Required

The biggest advantage and feature of a reverse mortgage in Canada, is that you don’t have to make any regular monthly payments until you move, sell your home or pass away. Unlike a regular mortgage, where you have to maintain your monthly payments, a reverse mortgage lets you use the money as you please and gives you freedom from payments for as long as you live in the home. Once the homeowners move, sell the home or pass away however, the reverse mortgage including interest and principal is paid off from the home’s sale proceeds.

  • The Money Borrowed Is Tax-Free And Does Not Affect Your OAS Or GIS

Since the income you receive from a reverse mortgage is tax-free, it does not have any impact on your Old-Age Security (OAS), Guaranteed Income Supplement (GIS) or income from your Registered Retirement Savings Plan (RRSP) that you may be receiving.

  • Choose How You Plan To Spend The Money

One of the greatest benefits of a reverse mortgage is that you are in complete control of the loan and you are free to spend it on whatever needs you require it for.

  • You Will Never Owe More Than The Value Of Your Home

With a reverse mortgage you will be guaranteed that when you or your estate has to repay the loan, it will never exceed the fair market value of your home at the time it is sold. But keep in mind that your property must be kept in good maintenance and your property taxes and insurance have to be up to date and not in default.

  • Relieve Financial Stress

A reverse mortgage loan can help you consolidate your debt and clear your monthly payments so that you can live the rest of your life financially stress free!

  • Enjoy Retirement

A reverse mortgage loan will help you clear your financial burdens and allow you to enjoy your retirement. You worked hard your entire life, now is the time to enjoy the fruits of your labour.

  • Take Control

A reverse mortgage loan is essentially the money from your home equity. So take control of what you own and make it work toward your needs now!

Reverse mortgages are definitely not for everyone, but they are a great option for many Canadian seniors who are looking for that extra financial security.

To find out more about a CHIP reverse mortgage in Canada, Contact HomEquity Bank at 1-866-522-2447 or talk to your financial advisor to see if a Canadian reverse mortgage is a good option for your financial needs.


This article is the property of HomEquity Bank and has been published with permission.

BILL FRASER
OWNER / MORTGAGE EXPERT

BOOK AN APPOINTMENT CONTACT ME
RECENT POSTS

Everything You Need to Know About Mortgage Financing in Canada

By Bill Fraser • August 4, 2026
For most Canadians, buying a home isn’t possible without a mortgage. And while getting a mortgage may seem straightforward—borrow money, buy a home, pay it back—it’s the details that make the difference. Understanding how mortgages work (and what to watch out for) is key to keeping your borrowing costs as low as possible. The Basics: How a Mortgage Works A mortgage is a loan secured against your property. You agree to pay it back over an amortization period (often 25 years), divided into shorter terms (ranging from 6 months to 10 years). Each term comes with its own interest rate and rules. While the interest rate is important, it’s not the only thing that determines the true cost of your mortgage. Features, penalties, and flexibility all play a role—and sometimes a slightly higher rate can save you thousands in the long run. Key Questions to Ask Before Choosing a Mortgage How long will you stay in the property? Your timeframe helps determine the right term length and product. Do you need flexibility to move? If a work transfer or lifestyle change is possible, portability may be important. What are the penalties for breaking the mortgage early? This is one of the biggest factors in the real cost of borrowing. A low rate won’t save you if breaking costs you tens of thousands. How are penalties calculated? Some lenders use more borrower-friendly formulas than others. It’s not easy to calculate yourself—get professional help. Can you make extra payments? Prepayment privileges allow you to pay off your mortgage faster, potentially saving years of interest. How is the mortgage registered on title? Some registrations (like collateral charges) can limit your ability to switch lenders at renewal without extra costs. Which type of mortgage fits best? Fixed, variable, HELOCs, or even reverse mortgages each have their place depending on your financial and life situation. What’s your down payment? A larger down payment could reduce or eliminate mortgage insurance premiums, saving thousands upfront. Why the Lowest Rate Isn’t Always the Best Choice It’s tempting to chase the lowest rate, but mortgages with rock-bottom pricing often come with restrictive terms. For example, saving 0.10% on your rate may put a few extra dollars in your pocket each month, but if the mortgage has harsh penalties, you could end up paying thousands more if you break it early. The goal isn’t just the lowest rate—it’s the lowest overall cost of borrowing . That’s why it’s so important to look beyond the headline number and consider the whole picture. The Bottom Line Mortgage financing in Canada is about more than rate shopping. It’s about aligning your mortgage with your financial goals, lifestyle, and future plans. The best way to do that is to work with an independent mortgage professional who can walk you through the fine print and help you secure the product that truly keeps your costs low. If you’d like to explore your options—or review your current mortgage to see if it’s really working in your favour—let’s connect. I’d be happy to help.

Co-Signing a Mortgage in Canada: Pros, Cons & What to Expect

By Bill Fraser • July 21, 2026
Co-Signing a Mortgage in Canada: Pros, Cons & What to Expect Thinking about co-signing a mortgage? On the surface, it might seem like a simple way to help someone you care about achieve homeownership. But before you sign on the dotted line, it’s important to understand exactly what co-signing means—for them and for you. You’re Fully Responsible When you co-sign, your name is on the mortgage—and that makes you just as responsible as the primary borrower. If payments are missed, the lender won’t only go after them; they’ll come after you too. Missed payments or default can damage your credit score and put your financial health at risk. That’s why trust is key. If you’re going to co-sign, make sure you have a clear picture of the borrower’s ability to manage payments—and consider monitoring the account to protect yourself. You’re Committed Until They Can Stand Alone Co-signing isn’t temporary by default. Even once the initial mortgage term ends, you won’t automatically be removed. The borrower has to re-qualify on their own, and only then can your name be taken off. If they don’t qualify, you stay on the mortgage for another term. Before agreeing, talk openly about expectations: How long might you be on the mortgage? What’s the plan for eventually removing you? Having these conversations upfront prevents surprises later. It Affects Your Own Borrowing Power When lenders calculate your debt service ratios, the co-signed mortgage counts as your debt—even if you never make a payment on it. This could reduce how much you’re able to borrow in the future, whether it’s for your own home, an investment property, or even refinancing. If you see another mortgage in your future, you’ll want to consider how co-signing could limit your options. The Upside: Helping Someone Get Ahead On the positive side, co-signing can be life-changing for the borrower. You could be helping a family member or friend buy their first home, start building equity, or take an important step forward financially. If handled with clear expectations and trust, it can be a meaningful way to support someone you care about. The Bottom Line Co-signing a mortgage comes with both risks and rewards. It’s not a decision to take lightly, but with careful planning, transparency, and professional advice, it can be done responsibly. If you’re considering co-signing—or want to explore safer alternatives—let’s connect. I’d be happy to walk you through what to expect and help you decide if it’s the right move for you.