If you're considering a reverse mortgage in Canada, you'll quickly run into two names: the CHIP Reverse Mortgage from HomeEquity Bank, and Equitable Bank's reverse mortgage. There's also a newer player, Bloom. So which is best? The honest answer is that it depends on your home, your age, how you want your money — and, crucially, how you plan to manage the interest. Here's a clear 2026 comparison.
The two main players (and a third)
Canada's reverse mortgage market is small and well-regulated. For years, HomeEquity Bank's CHIP product was effectively the only option. Equitable Bank entered more recently and competes hard on rate, and Bloom has added a third choice. More competition — together with Bank of Canada rate cuts since 2024 — has brought reverse mortgage costs down and widened who can qualify.
CHIP Reverse Mortgage (HomeEquity Bank)
CHIP is the most established reverse mortgage in Canada and has the broadest product line-up: the standard CHIP Reverse Mortgage, CHIP Max (more funds for those who want them), CHIP Open (maximum flexibility to repay, at a higher cost), and Income Advantage (designed for regular income-style advances). HomeEquity Bank's long track record, wide property-type acceptance, and product range are its main strengths. Standard CHIP closing fees are around $1,795 for most clients, with CHIP Open higher (about $2,995 or 1.25% of the loan, whichever is greater).
Equitable Bank Reverse Mortgage
Equitable Bank's reverse mortgage (including its Flex and Flex Lite products) is often the rate leader, particularly for borrowers taking a lump sum. As a 2026 guide, Equitable's Flex Lite has advertised five-year fixed rates starting around 6.44% for lump-sum borrowers, with a maximum loan-to-value around 40% on that product, and a setup fee near $995. Equitable can be very attractive if you want a one-time lump sum and your home is in a major market it serves; availability can be more selective by location and property type than CHIP.
Side-by-side (2026 guide)
| Factor | CHIP (HomeEquity Bank) | Equitable Bank |
|---|---|---|
| Minimum age | 55 | 55 |
| Max access | Up to ~55% of value | Up to ~55% (lower LTV on some lite products) |
| Rate positioning | Competitive; broad eligibility | Often lowest, esp. lump sum |
| Product range | Widest (CHIP, Max, Open, Income Advantage) | Flex / Flex Lite |
| Setup/closing fee | ~$1,795 standard (Open higher) | ~$995 setup |
| Payout options | Lump sum, advances, combination | Lump sum strength; some flexibility |
| Property/area acceptance | Broadest | More selective by location/type |
| Best when | You want flexibility or broader eligibility | You want a lump sum at the lowest rate |
Prepayment flexibility: how to lower your interest
This is where many buyers don't look closely enough — and it can matter more than a small rate difference. Because a reverse mortgage compounds when you make no payments, the ability to pay interest and prepay principal is your main tool for protecting equity. The good news: both lenders are fairly generous, with some differences in how penalties work.
| Prepayment feature | CHIP (HomeEquity Bank) | Equitable Bank |
|---|---|---|
| Pay accrued interest | Yes — monthly or annually, no penalty | Yes — monthly or annually, no penalty |
| Annual principal prepayment | Up to 10% once/year, within 30 days of anniversary | Up to 10% once/year, within 30 days of anniversary |
| Full payoff penalty, yrs 1–3 | 5% / 4% / 3% of the loan amount | 5 / 4 / 3 months' interest |
| Full payoff penalty, yrs 4–10 | ~3 months' interest (often waivable with 3 mo. notice) | ~3 months' interest (often waivable with 3 mo. notice) |
| Full payoff penalty, yr 11+ | None | None |
The practical takeaway on penalties
If you intend to pay the interest each year and chip away with the 10% privilege, both lenders support that well. The difference shows up mainly if you expect to repay the whole loan early — CHIP's early penalty is a percentage of the loan, while Equitable's is months' interest, and which is cheaper depends on your balance and rate. Figures are a 2026 guide and can change — always confirm current terms.
Where CHIP usually wins
- You want scheduled income-style advances rather than one lump sum.
- Your property type or location is less mainstream and you want the broadest acceptance.
- You value the longest track record and the widest range of products to fine-tune.
Where Equitable usually wins
- You want a single lump sum and the lowest available rate matters most.
- Your home is in a major market the bank actively serves.
- A lower setup fee is a priority.
What about Bloom?
Bloom is a newer reverse mortgage lender that has added welcome competition. It's worth including in a full comparison, especially as its products and rates evolve. The broader point stands: with three providers now competing, shopping all of them can make a real difference to your rate and terms.
Want a side-by-side quote from all three lenders?
We compare CHIP, Equitable, and Bloom for free — and model what interest payments would save you.
See Reverse Mortgage Options →How to choose (without overthinking it)
Start with how you want the money — lump sum or ongoing advances — because that often points to a lender on its own. Then compare the all-in cost (rate plus fees) for your specific age and home value, not just the headline rate. Factor in prepayment flexibility if you plan to pay interest or exit early. The lowest rate isn't always the lowest total cost once these are considered.
Why use a broker instead of going direct
If you call one bank, you get one bank's answer. An independent broker compares CHIP, Equitable, and Bloom side by side, negotiates on your behalf, models the long-term cost, and sets up an interest-payment plan so you can see the real difference in dollars — not marketing. There's typically no cost to you, because the lender pays the broker. At Newcastle Financial, we'll lay out all the options honestly and tell you if a reverse mortgage isn't your best move at all.
FAQ
Is CHIP or Equitable Bank safer?
Both are federally regulated Canadian banks and both offer a no-negative-equity guarantee. Safety isn't the deciding factor — cost, payout style, and prepayment terms are.
Can I pay down either one to reduce interest?
Yes. Both let you pay the accrued interest (monthly or annually) and prepay up to 10% of the balance per year without penalty. Doing so is the most effective way to stop the balance from compounding.
Does comparing lenders hurt my credit?
No. Reverse mortgage qualification isn't credit-score driven, and a broker compares options without multiple hard hits.
Amit Mistry is the Principal Broker at Newcastle Financial Corporation (FSRA Licence #13522), serving homeowners across Toronto, Mississauga, and all of Ontario. Have a question about reverse mortgages or your options? Call (647) 646-6523 or book a free consultation.
This article is for general information only and is not financial or legal advice. Lender names, products, rates, fees, prepayment privileges, and penalties referenced are 2026 estimates from public sources and change frequently; confirm current details directly. Newcastle Financial Corporation is a licensed mortgage brokerage (FSRA #13522).