Reverse Mortgages - What are They? CHIPA CHIP Home Income Plan is the simple and sensible way to turn up to 40% of the value that is locked up in
your home into tax-free cash you can use today. You do not have to make any payments – interest or principal –
for as long as you or your spouse live in your home. You maintain ownership and control of your home while
enjoying all the benefits of having converted some of your home’s value into cash. For these reasons and more,
a CHIP Home Income Plan is a sound financial solution for many people.
Fixed and variable interest rate options
Your CHIP Representative can give you the current
rates or you can find them at www.chip.ca
• Fixed interest rates are available for six-month,
one-year, three-year or five-year terms. Your
interest rate will be based on the term you choose.
• Variable rate option has no fixed term.
• If you wish, you may change your interest rate
option. Our variable rate option can be switched
to a fixed interest rate term at any time. If you
have a fixed interest rate term, it can be switched
at the end of your current term to another term
or to the variable rate.
Option Interest Rate
Receiving your money
CHIP helps you meet your cash flow needs with
1. Take all the money you’re eligible to receive as a
single lump sum advance.
2. Take an Initial Advance of some of the money
you’re eligible to receive (minimum $20,000)
and request more later whenever you need it.
These requests are called Subsequent Advances
3. Take the money you’re eligible to receive in
monthly, quarterly, semi-annual or annual advances
over a set period of time. This is called Planned
Advances (minimum $1,000 a month if Initial
Advance is less than $20,000, minimum $500 a
month with Initial Advance of $20,000 or more).
4. Take a combination of Initial, Subsequent and
5. Take all the money you’re eligible to receive as
• No principal or interest payments are required for
as long as you or your spouse live in your home.
The full amount only becomes due when you and
your spouse pass away, when your home is sold, or
if you both move out.
• You can choose to pay all or part of the total
accrued interest without signing up for the interest
payment discount plan. The minimum amount is
the lesser of $1,000 or the total accrued interest
and can be paid in a lump sum annually whenever
• You have the option to repay the principal and
interest in full at any time. When you repay, an
interest rate differential may apply. If you repay
within the first three years, a prepayment
amount will apply. These may be waived or
reduced in the event of death or a move to a
long-term care facility or retirement residence.
Interest Payment Discount
• If you choose to pay your full annual interest,
you will receive a 0.50% discount for the following
year. You can make regular payments or a single
lump sum (lump sum only for Planned Advances).
If you choose to make interest payments, you’ll
preserve more of your home equity and always
have the security of knowing that you can stop
making payments at any time you wish.
Visit www.chip.ca for the most up-to-date information.
• Typically from $175 to $400 as an out-of-pocket cost
• Actual amount varies by province and for urban and
• Request for an independent appraisal is ordered
through CHIP Home Income Plan
Independent legal advice is required
• Typically $300 to $600 as an out-of-pocket cost
• Price range assumes no title issues
• At your request, CHIP can provide a list of legal
advisors in your area
• It is recommended that you discuss fees with the
legal advisor before proceeding
Legal, closing and administrative costs
• Costs are $1,495
• These costs will be deducted from your
CHIP Home Income Plan funds so they are not
an out-of-pocket expense
• Includes title search, title insurance and registration
Source: MyMortgage.ca news letter