A reverse mortgage (or CHIP) may help seniors if they need some help with the bills.
What is it?
It’s a loan for Canadian homeowners aged 55-plus who fully own their home. Spouses or partners must also be 55-plus if they co-own.
What are the advantages?
It allows cash-strapped seniors to stay in their home and maintain ownership. It’s also a tax-free source of income. It won’t affect your Old Age Security or Guaranteed Income Supplement benefits.
What are the risks?
The interest rate on these loans can be quite high. Also consider the application fees, closing fees, legal fees and repayment penalties.