HomEquity Bank Income Advantage

Exclusively for Canadian Homeowners 55+.

HomEquity Bank Income Advantage is a loan secured by the equity in your client’s home.  It’s a tax efficient way to diversify your clients’ holdings across asset classes by unlocking their home equity during retirement.

As Canadians are living longer and are more active in retirement, the strategy of using real estate as an integral part of your clients’ retirement planning is a sound solution that can help them achieve their financial goals.

With HomEquity Bank Income Advantage, you can help your clients aged 55 and older access some of the equity in their home as monthly cash flow and as a series of lump sums.  And there are no payments required until they choose to move or sell.

How HomEquity Bank Income Advantage benefits your clients

  • Create more tax efficient retirement cash flow
  • Cover expenses of life events
  • Ensure their estate is protected

How HomEquity Bank Income Advantage benefits you

  • Build your book and generate revenue by putting your clients’ home equity to work
  • Preserve existing assets under administration by alleviating the need to sell investments more quickly
  • Retain your clients and consolidate their assets
  • Expand your client base in a growing market segment

Product Features

Eligibility

  • Available to homeowners aged 55 and older
  • No income or credit qualifications
  • Location and type of home must qualify

Amount

  • Homeowners can access up to 50% of the home’s current appraised value based on homeowner’s age and that of their spouse, and on the location and type of home
  • Funds can be received as monthly cash flow and as a series of lump sums
  • Any outstanding loans secured by the home must be paid off with HomEquity Bank Income Advantage funds

Repayment

  • No regular payments are required
  • The full amount only becomes due when the home is sold or if both homeowners move out
  • Clients have the option to repay the principal and interest in full at any time
  • An early payment charge may apply depending when the repayment is made. The charge may be waived or reduced in the event of death or a move to a long-term care facility or retirement residence

Ownership protection

  • Title remains in the clients’ name and they will never be asked to move or sell to repay their HomEquity Bank Income Advantage
  • Clients are responsible for up-to-date payment of property taxes, fire insurance and condo maintenance fees, as well as the maintenance of the property

Interest rates and set-up costs

  • Monthly cash flow funds are accessed at a Variable Rate of Prime1 + 1.25%. Spread over Prime is protected for a 5 year period.
  • Lump sum funds are accessed at HomEquity Bank’s 5 Year rate
  • Set-up costs include a home appraisal and independent legal advice

1. Prime refers to the most current weekly HomEquity Bank Prime Rate as posted on www.chip.ca/rates.