The CHIP Reverse Mortgage is a product offered by HomeEquity Bank, a federally regulated Canadian bank. It is the oldest and most widely recognized reverse mortgage product in Canada, having been available since 1986.

CHIP stands for Canadian Home Income Plan — the original name for the product before HomeEquity Bank rebranded it. Today, most Canadians simply call it "the CHIP mortgage," and it has become something of a generic term for reverse mortgages in Canada, the way "Kleenex" became a stand-in for facial tissue.

But CHIP is one product from one lender. Canada now has five reverse mortgage lenders, and the best choice depends on your specific situation.

The CHIP Reverse Mortgage works like any Canadian reverse mortgage:

• You must be 55 or older and own your home as your primary residence
• You can borrow up to 55% of your home's appraised value (the exact amount depends on your age, property, and location)
• No monthly payments are required
• Interest accumulates on the loan balance and is repaid when you sell, move, or your estate is settled
• You retain full ownership of your home
• HomeEquity Bank provides a no-negative-equity guarantee — you will never owe more than your home is worth

Funds can be received as a lump sum, in scheduled advances, or a combination of both.

1. Established track record HomeEquity Bank has been offering reverse mortgages in Canada for nearly 40 years. They have processed hundreds of thousands of applications and have a well-documented process. For some borrowers, that history provides comfort.

2. Available coast to coast CHIP is available in all Canadian provinces, including rural and smaller markets where some newer lenders do not yet operate.

3. Flexible fund disbursement You can receive funds as a lump sum, in regular monthly or quarterly advances, or as a combination — giving you flexibility to match your income needs.

4. No income or credit score requirements Like all Canadian reverse mortgages, CHIP does not require proof of income or a minimum credit score. Approval is based primarily on your age, home value, and location.

5. Federally regulated HomeEquity Bank is a Schedule I Canadian bank, regulated by OSFI. This provides a layer of consumer protection and oversight.

6. No-negative-equity guarantee You and your estate will never owe more than the fair market value of your home at the time of repayment — regardless of how the real estate market performs.

1. Rates are not always the lowest Because CHIP is the dominant brand, they do not always need to offer the most competitive rate. Equitable Bank, Bloom Finance, and other lenders have entered the market with competitive pricing. An independent broker comparison often reveals meaningful rate differences.

2. Prepayment penalties can be significant If you repay your CHIP mortgage early — because you sell, move, or simply want to pay it off — you may face a prepayment penalty. The penalty structure varies by term and how early you repay. This is not unique to CHIP, but it is worth understanding before you sign.

3. Interest compounds over time This is a feature of all reverse mortgages, not just CHIP — but it bears repeating. Because you are not making payments, interest compounds monthly. Over 10–15 years, the loan balance can grow substantially. This is the primary trade-off for the no-payment structure.

4. Setup costs Like all reverse mortgages, CHIP involves upfront costs: appraisal, legal fees, independent legal advice, and lender administration fees. These typically total $1,500–$3,000 and are usually deducted from the loan proceeds.

5. Not always the best fit for condos or rural properties HomeEquity Bank has specific property requirements. Some condo buildings and rural properties may not qualify, or may qualify for a lower loan-to-value ratio. Other lenders may be more flexible in certain markets.

• You live in a smaller market or rural area where other lenders are not available
• You value the established track record and brand recognition
• You want a straightforward lump sum or scheduled advance structure
• You have compared rates and CHIP is competitive for your situation

• You live in a major urban centre where all five lenders are active
• Rate is a primary concern — even a 0.5% difference compounds significantly over 10+ years
• You have a condo or non-standard property type
• You want to explore newer products like Fraction's shared appreciation model

Here is the honest truth: most Canadians who call HomeEquity Bank directly never know what Equitable Bank or Bloom Finance would have offered them.

An independent reverse mortgage broker compares all five lenders simultaneously and recommends the best fit for your specific situation — not the product that pays the highest commission or the one with the biggest advertising budget.

The CHIP Reverse Mortgage is a solid product with a long track record. It may well be the right choice for you. But you should only choose it after comparing it against the alternatives — not because it is the only name you have heard.

The CHIP Reverse Mortgage is Canada's most established reverse mortgage product, with genuine strengths: coast-to-coast availability, flexible disbursement, and a federally regulated lender. Its main drawbacks are that it is not always the most competitively priced option, and prepayment penalties can be meaningful.

The right approach is to treat CHIP as one option among five — and let an independent broker help you compare them all.

Want a side-by-side comparison for your situation? Request a free conversation and we will pull current rates from all five Canadian lenders and walk you through the differences.