Stay in home – A solution for seniors with money woes

“We’ve lived in this house for over 35 years. We just couldn’t face the thought of leaving.”

Canadians spend years building equity in their homes and property planning to relax and enjoy them after retirement. But once retired, many are finding that their reduced income makes it impossible to live as they always dreamed.

Take Ed, 68, and Elaine, 65, who were facing a financial challenge. They were house rich, having paid off their mortgage years ago, but cash poor, due to limited retirement income. In addition, the cost of independent living was higher than they had expected. Ed was taking expensive in-home physiotherapy treatments regularly, and the house needed new safety and security features to help the couple cope with the increased challenges of day-to-day living.

“We love our home. This is where we raised our children and it’s full of memories. We would really miss our neighbours and the tight-knit community. We wanted to stay in our home, but it didn’t seem possible without more money coming in.”

This is a common challenge. The average Canadian senior has 80% of their assets tied up in their home, and lives on limited or fixed income. If this is your situation, you may find it increasingly difficult to pay property taxes and utility and house maintenance bills, not to mention ordinary living expenses. Borrowing money against your home’s value is a problem if you don’t have enough income for the monthly repayments.

“It just didn’t seem right to us, after raising our family and spending decades paying down a mortgage, that now we couldn’t afford to live in our own home.”

The solution for many is the CHIP Home Income Plan.

For Ed and Elaine, the solution came on a suggestion from their son; he suggested they look into the CHIP Home Income Plan for the cash to cover renovations and increased their cash flow.

How does it work?
Simply put, the CHIP Home Income Plan is a reverse mortgage: a loan secured by the equity in your home. Unlike a traditional mortgage where you make regular payments to someone else, a CHIP Home Income Plan pays you.

You can receive up to 50% of the value of your home in tax-free cash, with no repayments required until you move or sell the home. And you can use the money for any purpose you wish – from financing home improvements, to supplementing retirement income or covering healthcare expenses.

With CHIP, you can choose how you want to receive your money. Two of the most popular choices are taking the money as one lump sum payment or taking it in regular monthly payments. In Ed and Elaine’s case, they arranged to immediately receive a lump sum payment of $26,000 to cover the cost of home renovations and then regular monthly payments of $550 over a 15-year period for a total sum of $125,000. Then, they were able to relax and enjoy life in the home and the neighbourhood they loved with their burdensome financial worries behind them.

Will there be taxes to pay?
No. There are no taxes to pay on the money received from a reverse mortgage. Funds from a CHIP Home Income Plan are not added to your taxable income so it doesn’t affect any government benefits that you may receive.

With a CHIP Home Income Plan, there are no payments to make as long as you or your spouse live in your home. The principle and interest only become due when your home is either sold or you move out. Plus, you keep all the additional equity that accumulates in your home from the time you take out the CHIP Home Income Plan to the time you sell or move out.

CHIP could be the answer for you!
For more than 20 years, the CHIP Home Income Plan has been helping Canadians turn the equity they have built up in their homes into tax-fee cash. If you’re 55 and over and want to find out if a CHIP Home Income Plan is right for you, talk to a CHIP representative today and get the information you need to make an educated decision. Call 1-866-518-2447 or visit

CHIP Home Income Plan is provided by HomEquity Bank, a Schedule I Canadian Bank. HomEquity Bank is a subsidiary of HOMEQ Corporation, a TSX-listed company.