What Is a C.H.I.P. Mortgage? A Simple Guide to Reverse Mortgages in Alberta

For many Alberta homeowners, their house is their largest financial asset—especially in retirement. If you’re 55 or older and looking for a way to access your home equity without selling or downsizing, a C.H.I.P. mortgage, also known as a reverse mortgage, may be an option worth exploring.

Whether you’re considering ways to supplement your retirement income, handle unexpected expenses, or simply improve your quality of life, understanding how a C.H.I.P. mortgage works is an important part of your financial planning journey.

What Is a C.H.I.P. Mortgage?

A C.H.I.P. (Canadian Home Income Plan) mortgage is a type of reverse mortgage that allows homeowners aged 55+ to borrow against the equity in their home—without making monthly mortgage payments. Instead of paying the lender, the lender pays you.

You can receive the funds as a lump sum, monthly payments, or a line of credit, depending on what best suits your needs. The loan, along with accrued interest, is repaid only when the home is sold, you move out, or in the event of your passing.

Who Qualifies for a C.H.I.P. Mortgage in Alberta?

To be eligible for a C.H.I.P. mortgage in Alberta, you must meet the following criteria:

Be 55 years of age or older (only one homeowner needs to meet this requirement)
Own your primary residence in Alberta
Have sufficient equity in your home
Live in the home for the duration of the loan

Typically, homeowners can borrow up to 55% of their home’s appraised value, depending on age, home location, and property type.

How Does a C.H.I.P. Reverse Mortgage Work?

Once approved, you can choose how to receive your funds:

Lump Sum – Access the full amount at once for large expenses or investments.
Monthly Payments – Receive regular, consistent payments to help with monthly living expenses.
Line of Credit – Draw from your available funds only when needed.

Unlike traditional mortgages or home equity loans, there are no monthly payments required. Interest accumulates over time and is added to the loan balance, which is repaid when the home is eventually sold.

Key Benefits of a C.H.I.P. Mortgage

✔ No Monthly Mortgage Payments – Enjoy peace of mind in retirement without the burden of monthly bills.

✔ Stay in Your Home – Continue living in your home while using its equity to support your lifestyle.

✔ Access to Tax-Free Cash – The funds you receive are not considered income and are therefore not taxable.

✔ Flexible Payout Options – Choose the disbursement method that best fits your needs.

Important Considerations

While a reverse mortgage can provide financial flexibility, it’s important to weigh the long-term impact:

Reduced Estate Value – Since the loan is repaid from the sale of the home, your estate’s value may be reduced.
Accruing Interest – The longer the loan remains unpaid, the more interest accumulates.
Ongoing Responsibilities – You must still maintain the property and stay up to date with property taxes and insurance.

Is a C.H.I.P. Mortgage Right for You?

A C.H.I.P. mortgage can be a powerful tool for retirees looking to unlock their home equity without selling. However, it’s not the right fit for everyone. If preserving your estate for inheritance is a priority, or if you may need to move in the near future, you’ll want to explore other financial options.

It’s always a good idea to consult with a trusted mortgage advisor or financial planner to determine whether a reverse mortgage aligns with your long-term goals.

Final Thoughts

In today’s evolving economic climate, financial security during retirement is more important than ever. A C.H.I.P. mortgage can offer financial freedom, peace of mind, and the ability to age in place—all while making the most of your home’s value.

If you’re 55+ and curious about how a reverse mortgage could benefit you or your loved ones, reach out to our team or a certified mortgage specialist. We’re here to help you make informed, empowered decisions about your future.

📩 Need a recommendation for a mortgage expert you can trust? 📩 Contact us today for expert advice!

At the Tara Molina Real Estate Group, we’re here to help you make informed decisions and and to help you protect your investment.

What Is a C.H.I.P. Mortgage