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Do your clients need help meeting their retirement income needs? With inflation taking a bite out of savings, accessing cashflow can be a real challenge. That’s why many Canadians are turning to one of their biggest assets – their homes – to supplement their income in retirement. A home equity line of credit (HELOC) and a reverse mortgage are two of the most popular ways for Canadians to tap into their home equity and boost cashflow.

The benefits of a HELOC

With a HELOC, homeowners can access up to 65% of the value in their homes and are only charged interest on the amounts they draw from their credit line. Unlike a mortgage, there are no scheduled payments on the loan’s principal, and homeowners can pay off their line of credit when it’s convenient for them. However, they must make minimum monthly interest payments on any amounts drawn.

• HELOC rates are usually lower than other lines of credit because the loan is secured by your client’s home 
• Once approved for their HELOC,  clients can access cash as they need it
• When they start to pay down the principal, the amount they can borrow increases to their original credit limit, providing ongoing access to cashflow

The reverse mortgage advantage

The other way for homeowners to access the equity in their homes is through a reverse mortgage. The CHIP Reverse Mortgage by HomeEquity Bank allows Canadian homeowners age 55+ to access up to 55% of their home’s value and turn it into tax-free cash. Your clients can receive the funds from a reverse mortgage as a lump sum or in regular monthly deposits. Clients can use the money for any of their financial needs, including health care costs, debt consolidation or lifestyle expenses.

A big advantage of the CHIP Reverse Mortgage is that monthly mortgage payments are not required – the full amount of the loan only becomes due when clients move or sell their home or through their estate if they pass away. Some of the other benefits of a reverse mortgage include:

• No income requirements. Reverse mortgages are specifically designed for Canadians 55+ who may have difficulties qualifying for a HELOC and other loans. 
• No need to requalify. A regular HELOC from a bank may subject the borrower to credit score checks over time, which can affect their ability to access the line of credit down the road. 

Interest rates converging

Until recently, one of the major advantages of a HELOC compared to a reverse mortgage was its lower interest rate. At the end of last year, the average HELOC rate was about 2% less than the average reverse mortgage rate. But the difference today is slim. In fact, the CHIP Reverse Mortgage 5-year Special Rate was slightly lower than the average HELOC rate in early April 2023.

To learn more about helping your clients tap into their home equity with the CHIP Reverse Mortgage, visit us online or contact a Business Development Manager today.

As inflation reduces the value of savings and financial markets continue to experience volatility, it can be challenging for retired Canadians to access the cashflow they need to live their desired lifestyle. And while the good news is that Canadians are living longer than ever before – those who retire at 65 can expect to live an additional 20 years or longer when you factor in advances in health care – these financial challenges they may face may start to tarnish their golden years.

Traditional sources of retirement income

A combination of registered savings, government, and company pensions are typically relied upon by Canadians for retirement income. If an individual begins collecting government pensions (such as Old Age Security and Canada Pension Plan) at age 65, they may currently receive less than $2,000 per month. Additionally, four in 10 Canadians do not have company pension plans to fall back on, and recent figures show that the average amount saved in registered plans for those aged 55-64 is about $100,000. As a result, some clients approaching or already in retirement may experience an income deficit, particularly with today’s inflation rate of 6%. 

Access home equity with a reverse mortgage

One advantage older Canadians do possess is home ownership, with more than 65% owning their homes. That’s why the CHIP Reverse Mortgage by HomeEquity Bank has become such an essential cashflow option. This unique income alternative allows Canadian homeowners 55+ to access up to 55% of their home’s value and turn it into tax-free cash without moving or selling their home. Plus, there are no monthly mortgage payments while retirees live in their homes; the total amount becomes due only when the house is sold, if they move, or through their estate if they pass away.

With the CHIP Reverse Mortgage, homeowners can choose to receive the funds as a lump sum or in regular monthly deposits. They can use the funds for a range of financial needs, including, but not limited to, health care costs, home renovations, debt consolidation, or lifestyle expenses.

Advantages of tax-free retirement income

Having access to tax-free cashflow provides many financial planning benefits to your clients.

• Because they are unlocking home equity, the funds are not added to their taxable income and do not affect government benefits such as Old Age Security (OAS)
• Your clients won’t need to liquidate their investments, potentially losing out on investment income during a down market
• Tapping into their home equity allows more of your clients’ registered investments to grow tax-free (and helps you maintain hard-won client portfolios)

Help your clients take a holistic look at their retirement income options with the CHIP Reverse Mortgage by HomeEquity Bank. Visit us online or contact a Business Development Manager to learn how to make CHIP part of your financial toolkit.

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Your clients’ financial planning objectives are continually evolving, and those of your clients aged 55 or better are no exception. They are living longer lives in retirement and want to keep their investment portfolios intact for as long as possible. They also want to maintain their desired lifestyles and seek greater cashflow certainty to realize their retirement dreams. Some clients would like to help their children with a down payment on their first home, while others may want to spruce up and renovate their homes so they can age comfortably in place.

Listening carefully to the goals and needs of your clients can help you provide them with the best advice for their situation. However, a challenge faced by many 55+ Canadians is that persistent inflation and high interest rates make it challenging to plan confidently. One financial solution worth considering is the CHIP Reverse Mortgage by HomeEquity Bank.

The CHIP Reverse Mortgage allows Canadians 55+ to access up to 55% of their home’s value in tax-free cash. Your clients maintain ownership of their homes and don’t have to make mortgage payments until they move or sell. Plus, they don’t have to take the full amount of the reverse mortgage they qualify for; they can access funds whenever the need for cash flow arises. These funds can then be used to meet a variety of objectives, including funding retirement lifestyles, home renovations, or debt consolidation.

Is the CHIP Reverse Mortgage a good fit for your clients? While many scenarios warrant a discussion, here are three that could prompt a discussion about the role of this flexible solution in your client’s financial plans. 

1. Your client wants to consolidate their debt.

Skyrocketing inflation has led many older Canadians to use debt, such as credit cards, to cover their expenses. Debt can be stressful at any stage in life, but in a climate of rising interest rates it can be especially challenging for Canadians 55+ who may not have a regular income and find it difficult to keep up with monthly payments. If you have clients in this situation, the CHIP Reverse Mortgage may be worth considering. Clients can access tax-free funds to consolidate their high-interest-rate debt and gain peace of mind.

2. Your client wants to maintain their desired lifestyle in retirement.

If you have clients who have recently retired, the high cost of living may be having an impact on their anticipated lifestyle. They may be experiencing a shortfall in their cash flow but want to avoid tapping into their nest egg at this early retirement stage. For clients in this situation,  the CHIP Reverse Mortgage can provide the cash flow to help them confidently pursue their retirement dreams.

3. Your client is facing unanticipated expenses.

An urgent roofing job on the house, a vehicle needing major repairs, or a large out-of-pocket medical expense can all play havoc with your client’s finances. If your client is facing a financial setback, a reverse mortgage can be used to cover the necessary costs and alleviate their stress. The flexibility of the CHIP Reverse Mortgage means they can access only the funds they need and are not required to make payments until they move or sell their home.

To learn how the CHIP Reverse Mortgage fits into your client’s financial plans, visit us online or contact a Business Development Manager today.

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In an environment of rising inflation and volatile financial markets, your affluent, retired clients are looking for solutions to help with their cash-flow needs. But they also have other priorities, such as keeping their investment portfolios intact, maximizing the value of their estate and minimizing taxes. These goals can sometimes conflict, as some of your clients may be tempted to cash out investments to fund more immediate lifestyle needs. Although understandable, selling investments in a volatile market can lock in losses, reduce the value of your client’s estate and lead to taxable events. 

Reverse mortgages: A holistic wealth planning solution

Your affluent clients will look to you for guidance and advice on how to meet all of their wealth planning goals. The good news is there is a way to get in front of your clients’ needs and retain their assets under management: The CHIP Reverse Mortgage by HomeEquity Bank. With this flexible planning tool, Canadians 55+ can access up to 55% of their home’s value in tax-free cash. Monthly mortgage payments aren’t required until they move or sell, which frees up additional cash. In other words, with a reverse mortgage, the client’s home pays them. Plus, they get to stay in the home and community they love.

Your clients don’t have to take the full amount of the reverse mortgage they qualify for; they can tactically access funds whenever the need for tax-efficient cash flow arises. These funds can be used to meet various needs, including funding retirement lifestyles, building investment portfolios, purchasing a property or helping children with a down payment on their home.

Your clients may already be thinking about the advantages of a reverse mortgage – HomeEquity Bank funded $1 billion in new mortgages in 2021, much of that originating directly from individuals.

Help keep client portfolios intact

Even though home prices have dipped recently, many of your clients have probably benefited from substantial home-price appreciation over the past few decades. But this equity can be difficult to access for those who don’t want to sell their homes. With a CHIP Reverse Mortgage, up to 55% of home equity becomes accessible. Clients maintain full ownership of their home and don’t have to make mortgage payments until they move or sell.

Your clients’ investment portfolios are the other major component of their net worth. However, selling non-registered investments to access funds can trigger taxable events, as can increasing withdrawals from registered plans. Helping your clients meet their cash flow needs with a CHIP Reverse Mortgage means that more of their investments continue growing on a tax-deferred basis. This provides stability for clients who are living longer lives and want to enhance their estate for their heirs.

Delivering flexible solutions that provide your clients with tax-free cash flow also helps to preserve your accounts and assets under management. 

To learn more about how the CHIP Reverse Mortgage fits in your clients’ financial plans, visit us online or contact a Business Development Manager today.

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Many retirees view Old Age Security (OAS) as a financial benefit they are entitled to – especially today as inflation and the cost-of-living soar. However, if some of your clients increased withdrawals from their registered plans this year to help meet cash-flow needs, they might be in for a shock at tax time when their accountant informs them, they will have to repay some of their OAS benefits. Retirees must pay back all or a portion of their OAS if their annual income exceeds $81,761.

Have a plan going forward

Fortunately, there is a way to help your affluent clients plan and avoid having to repay their OAS benefits for the 2023 taxation year. The CHIP Reverse Mortgage by HomeEquity Bank can solve OAS pain points and generate the tax-free cash flow your clients need. With the CHIP Reverse Mortgage, clients 55+ can access up to 55% of their home’s value and turn it into tax-free cash without having to move or sell. Because the money they receive is a loan, it’s not added to their taxable income and does not affect income-tested government benefits like the OAS.

Did you know? Canadians 55+ are Canada’s largest and fastest-growing demographic and have over $1 trillion locked in their home equity.

Inflation taking a toll

Inflation is taking a toll on the financial health of Canadians. Over half say they are having a tough time keeping pace with the rising cost of living. Retired Canadians are feeling the pinch in many ways. Higher prices are happening while volatile markets are contributing to concerns about retirement savings. And rising interest rates are making it more difficult to carry debt. That’s why the CHIP Reverse Mortgage is such an attractive planning solution. It can help your clients maintain or even improve their standard of living – without impacting their government benefits like OAS. With a reverse mortgage, your clients enjoy the convenience of a lump-sum or monthly payout to help with any of their financial needs, including health care costs, home renovations and debt consolidation. Plus, your clients get to stay in the home they love – a goal shared by more than 90% of Canadians.

Did you know? 93%  of Canadians want to stay in their current home throughout their retirement.

Wealth planning benefits

Access to tax-free cash flow provides other planning benefits to you and your clients.

• Tapping into their home equity allows a larger portion of your clients’ registered investments to continue growing on a tax-free basis – potentially providing more assets to leave their heirs.
• Preserving client investment portfolios helps you maintain your assets under management.
• Your clients don’t have to sell investments in a volatile market or borrow funds when interest rates rise.

To learn more about the CHIP Reverse Mortgage by HomeEquity Bank, visit us online or contact a Business Development Manager today.

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The current economic climate is taking a toll on retired Canadians. Rising inflation is making it difficult for those on a fixed income to maintain their standard of living. With increased costs for everything from groceries to electricity bills, three-quarters of Canadians say they are stressed about money and more than 55% say they can’t keep pace with inflation. Those concerns are amplified by the higher costs of aging in place. Although more than 90% of Canadians want to retire in their current homes, they’re facing increasing expenses– including out-of-pocket health care and home retrofitting costs – and rising inflation that is eroding retirement savings making it more difficult to retire in the home they love.

With the annual inflation rate at almost 8% in Canada, interest rates are also trending up.  Rising interest rates are leading many Canadian households to devote a significant share of their income to mortgage payments and home equity lines of credit (HELOC) payments. HELOC payments as a proportion of non-mortgage debt grew from 10.5% in January 2000 to 32% by January 2021, according to Statistics Canada. Homeowners are justifiably worried about preserving the equity in their homes.

At times like these, your clients look to you for advice and guidance on how to navigate the uncertain economic climate and generate the cash flow they need to maintain their standard of living.

CHIP Reverse Mortgage: A solution made for today

The CHIP Reverse Mortgage from HomeEquity Bank is a financial solution that meets the needs of your clients.  The CHIP Reverse Mortgage is a loan secured against the value of a home that lets clients convert up to 55% of their home equity into tax-free cash – without having to move or sell. Clients can enjoy the convenience of regularly scheduled payouts or take a lump sum to help with any of their needs, including health care costs, home renovations, vacation, or debt consolidation. The choice is theirs. The best part is, the CHIP Reverse Mortgage does not require any monthly mortgage payments until your clients decide to move or sell*.

Your clients also get to stay in the home they love while they wait for the housing market to recover. And thanks to our No Negative Equity Guarantee*, they will never owe more than the fair market value of their property when they move or sell. This is a very important safeguard in today’s economic climate. It ensures that if your client’s home depreciates below the mortgage amount owing, HomeEquity Bank will cover the difference. HomeEquity Bank never lends more than 55% of the home’s value for exactly this reason. Over the past 30+ years, 99% of Reverse Mortgage holders have had equity left in their home, and on average, this equity amounts to 60%.

Financial planning benefits of the CHIP Reverse Mortgage  

Having access to tax-free cash flow provides many financial planning benefits to you and your clients.

• Because clients are unlocking home equity, the funds are not added to their taxable income and do not affect income-tested government benefits such as Old Age Security (OAS)
• Tapping into their home equity allows a larger portion of your clients’ registered investments to continue growing on a tax-free basis – providing potentially more assets to leave their heirs
• Preserving client investment portfolios helps you preserve your hard-won client accounts.
• Your clients don’t have to sell investments in a volatile market or borrow funds when interest rates are rising

To learn more about the CHIP Reverse Mortgage , visit us online or contact a Business Development Manager today. 

* As long as you keep your property in good maintenance, pay your property taxes and property insurance and your property is not in default. The guarantee excludes administrative expenses and interest that has accumulated after the due date.