Mortgages · Lender review
HomeEquity Bank (CHIP) mortgage review
The category incumbent by four decades: the only Schedule 1 bank dedicated to reverse mortgages, owned by Ontario Teachers’ since 2022, with the widest product menu — and a prepayment schedule that effectively locks the standard CHIP for five years unless you die, move to care, or pay dearly.
Best for: 55+ homeowners certain they’re staying put — with the product choice matched to their exit odds
Pros
- Roughly 40 years in reverse mortgages (since 1986) — the deepest specialist pedigree in Canada
- Schedule 1 bank, OSFI-regulated, owned by Ontario Teachers’ Pension Plan
- Four-product menu: standard CHIP, higher-LTV Max, no-penalty Open, and monthly-income Advantage
- Prepayment charges waived entirely on death and halved on a move to long-term care
- Optional interest payments can freeze the compounding; estate gets 180 days to settle
Cons
- Standard CHIP: full-payout-only in the first 5 years, at up to 11 months’ interest — a genuine lock-in
- Highest standard 5-yr rate of the three reverse-mortgage lenders we track (6.64% vs 6.44%)
- CHIP Open’s exit freedom costs 8.95% variable plus the greater of $2,995 or 1.25% in closing costs
- The no-negative-equity guarantee is conditional on taxes, insurance and upkeep — and excludes post-due-date interest
Who HomeEquity Bank is
CHIP — originally the Canadian Home Income Plan, founded 1986 — is the Canadian reverse-mortgage market: a Schedule 1 bank since 2009, acquired by the Ontario Teachers’ Pension Plan in 2022, CDIC member on its deposit side, OSFI-regulated throughout. Institutional solidity matters more here than in regular lending, because the no-negative-equity promise is only as good as the institution standing behind it for decades.
The menu has four doors: the standard CHIP (up to 55% of home value, $250k minimum home value), CHIP Max (higher percentage of equity, in select locations, at exactly +1.00% over CHIP’s posted rates), CHIP Open (repay any time, no penalty — priced for it), and Income Advantage (planned monthly advances from $1,000, the closest thing to a self-made pension).
The prepayment schedule nobody reads
This is the review’s most important paragraph. On the standard CHIP, partial prepayment isn’t allowed in the first five years — only full payout, and the charge for it runs 11 months’ interest in year one, 8 in year two, 4 in year three, then the greater of three months’ interest or an IRD through year ten. The humane exceptions are real and published: waived entirely on death, halved on a move to long-term care, waived within 30 days of an interest-reset date, and gone after year ten.
If there’s meaningful odds you’d sell or refinance within a few years, that’s what CHIP Open exists for: no prepayment penalties ever, at a variable 8.95% (prime + 4.5%) and closing costs of the greater of $2,995 or 1.25% of the loan — expensive insurance, honestly priced. Income Advantage carries its own gentler privilege: a 10% annual lump-sum allowance.
Costs, compounding and the guarantee
Current special pricing (their rate sheet, stamped October 30, 2025): 5-year fixed 6.64% (APR 7.06%), 3-year 6.94%, 1-year 6.99%, variable at prime + 2.66%, with a $1,795 closing and administration fee ($2,495 on Income Advantage). That’s the highest standard rate of the three reverse lenders we track — Equitable’s Flex Lite and Home Trust’s EquityAccess both sit at 6.44% — the comparison lives in our reverse-mortgage guide.
Interest compounds semi-annually with no payments required — our reverse-mortgage calculator draws exactly what that does to equity year by year — and optional interest payments are allowed if you want to freeze the snowball. The no-negative-equity guarantee covers any shortfall at sale “as long as you have met your obligations” — property taxes, insurance, basic upkeep — and excludes administrative costs and interest accrued after the due date. The estate gets 180 days after the last borrower’s death to repay; HEB’s own figure is that 99% of clients have equity left at repayment.
Frequently asked questions
How does HomeEquity Bank (CHIP) calculate mortgage penalties?
Reverse-mortgage schedule: in the first 5 years the standard CHIP can only be repaid IN FULL — at 11 months’ interest (yr 1), 8 (yr 2), 4 (yr 3), then greater-of three months’ interest or IRD to year 10; none after 10. Waived on death, halved on a move to long-term care, waived within 30 days of a reset date. For a closed fixed mortgage the charge is the greater of three months' interest or the IRD; variables are typically three months' interest. Run your numbers in our penalty calculator, and remember only the lender's own payout statement is binding.
How much can I prepay at HomeEquity Bank (CHIP) without a penalty?
Lump sums up to None on standard CHIP in the first 5 years; Income Advantage allows 10%/yr of the original principal per year, plus a payment increase of up to No payments required — optional interest payments allowed. Privileges reset annually and generally don't carry forward — and using them just before breaking a mortgage shrinks the balance the penalty is computed on.
Does HomeEquity Bank (CHIP) offer a HELOC or readvanceable mortgage?
None — reverse mortgages only: CHIP, CHIP Max (+1.00%), CHIP Open (no-penalty, 8.95%), Income Advantage. HELOCs at federally regulated lenders are stress-tested like mortgages and capped at 65% of home value within an 80% total — the mechanics (and the retiree angle) are in our HELOC guide.
Is a mortgage from HomeEquity Bank (CHIP) safe?
Borrowing carries no deposit-style risk — if a lender fails, your mortgage continues on its terms with a new owner; you never owe it back early. What matters is the contract: penalty method, prepayment room, and portability. That's exactly what this review scores.
The bottom line
If a reverse mortgage is the right tool at all — price a HELOC first if you can still qualify — HomeEquity Bank is the institutional default, with the product menu to match your exit odds: standard CHIP if you’re staying, Open if you might not, Income Advantage if it’s a pension substitute. Just choose with the prepayment schedule in front of you, not the brochure.
See how HomeEquity Bank (CHIP) prices today
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Educational review, not financial advice or a mortgage offer. Product facts verified at HomeEquity Bank (CHIP)'s own pages and disclosures on June 12, 2026; rates shown come from our daily pipeline (scraped or hand-verified at the lender, stamped per row) and change without notice. Penalty wording summarizes the lender's published method — the payout statement is the only binding figure.