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§ Calculator · Estate

Reverse mortgage (CHIP)

What this is

Borrow against your home, pay nothing until you sell or pass

Reverse mortgages (Canada: HomeEquity Bank CHIP, Equitable Bank Reverse Mortgage) let homeowners 55+ borrow against their home equity. No monthly payments. The interest compounds until the home is sold or the last owner passes, then it's paid off from the sale proceeds.

  • ·Eligible: homeowners 55+ with primary residence. Max loan = 40-55% of home value.
  • ·Rates: 7-9% range in 2026 (much higher than a traditional mortgage). Compounds, so $200k can become $400k in ~10 years.
  • ·Remaining equity = home value (appreciated) − loan balance. Often shrinks even if home prices rise.
  • ·Worth it only when no other income sources exist + home is the primary asset + estate to heirs isn't a priority.

Max loan available

$495,000

Debt at horizon

$591,775

Home value at horizon

$1,402,171

Remaining equity

$810,395

Effective annual cost: 13.06% of original loan.

Educational. Not financial advice. Reverse mortgages are expensive, talk to an independent CFP first. Consider downsizing or HELOC alternatives before signing.

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Disclaimer

Educational, not financial advice. Output is generated by an AI assistant using simplified assumptions. Tax rates, contribution limits, and benefit amounts change annually; confirm with a CFP, CPA, or the relevant Canadian regulator (CRA, FSRA, OSC, IIROC) before acting.