With the age of the Canadian population and the demand for retirement income solutions, reverse mortgages are becoming an increasingly attractive option for homeowners who build important home equity.
These numbers clearly depict this ever-changing landscape. More than 40% of Canadian homeowners are over 55 years old and are expected to retire within the next decade.
Chance
For mortgage brokers who want to develop a reverse mortgage business, a strategic partnership with real estate brokers brings many benefits. Real estate agents are usually the first professionals to consult when considering sales, layoffs, or obtaining net worth of their home.
By working together, mortgage brokers can leverage a stable pipeline of qualified prospects, while real estate brokers can increase their value by providing clients with a wider range of flexible financing options and ultimately increasing their business opportunities.
However, some real estate agents may not fully understand the value and modern use of reverse mortgages, or they may still have an outdated misunderstanding of the product. A savvy broker who positions yourself as a knowledgeable and reliable partner can bridge this gap and form a mutually beneficial relationship.
Strategic uses of chips
Chips reverse mortgage loans from Home Equity Bank allow Canadian homeowners over 55 to convert some of their home equity into tax-free cash without selling the home or paying a mortgage monthly. While often used to consolidate debt or supplement retirement income, CHIP reverse mortgages are increasingly used for more strategic financial planning goals.
Purchase a second property. Clients can use funds obtained from CHIP reverse mortgages to purchase vacation homes or rental units for investment purposes without immersing in registered savings or portfolios. This means no capital gains to be reported, no taxable withdrawals, and no disruption to its long-term investment strategy. Clients do not need a proof of income to implement this strategy, making it easier for retirees to obtain. In some cases, a blanket mortgage covering primary residence and new properties can be explored as a financing strategy for those seeking greater leverage and flexibility.
- Major business opportunities. The real estate agent closed the buyer when purchasing a vacation property or renting a property.
- Secondary business opportunities. Provide a solution to funding to purchase a second property – use a CHIP reverse mortgage on the primary residence to obtain the necessary funds.
Give a down payment on the house. First-time home buyers are increasingly relying on their families to get financial support. The average gift for first-time homebuyers has risen to $115,000, a 73% increase from 2019 levels. This makes it difficult for families with financial stretching to provide support. CHIP reverse mortgages can be used to provide a survival estate for children or grandchildren to purchase their first home. By using chips, parents can maintain their investment and retirement plans intact without facing the impact of monthly mortgages or their own cash flow.
- Major business opportunities. The real estate agent closes the buyer when purchasing a home for family members (the purchaser requires a traditional mortgage).
- Secondary business opportunities. A solution for a genius down payment in a new home – parents or grandparents use chip reverse mortgages to access funds for down payments.
Short-term bridge financing. Clients who find the next dream home may need extra time before selling their existing homes – maybe renovating and attracting higher prices, or just to better manage the move and relieve stress. CHIP, opened by Home Equity Bank, is a reverse collateral solution designed for short-term financing. It allows customers to enter the interests in the home and convert it into tax-free cash without monthly payments. After the home is sold, customers can repay the full amount in the chip opening – without suffering a fine of advance payment.
- Major business opportunities. Buy a new home before selling an existing home.
- Secondary business opportunities. Provides short-term bridge financing solutions to get the tax-free funds needed to pay down payments on new homes with Chip Open. After an existing home is sold, the loan can be paid off without an advance penalty.
These are just a few ways you can help real estate agents improve their value and complete more transactions by providing clients with flexible financing options.
3 easy steps you can take today
- Organize real estate broker information meetings. Work with one of our Business Development Managers (BDMS) to conduct information meetings with local real estate agents. Your BDM will help you connect with the right real estate agent and prepare your presentation, focusing on the use of CHIP reverse mortgages and their strategic plans.
- Co-host an open day with real estate agents. Work with real estate agents to co-host open days and share chip marketing materials. LaunchPad, a partner at HomeEquity Bank, gives you access to a suite of professionally designed, customizable and ready-made materials including newsletters, emails and social posts. These events are also a great opportunity to resolve the myths and misunderstandings of reverse mortgages.
- View your existing customer list. With the support of your HomeEquity Bank BDM or BDA, take a closer look at your database and they can help find opportunities that are overlooked. A broker aiming to expand his reverse mortgage business has found many potential partnerships in her backyard. Her BDM advises her to have a deep connection with her husband, an experienced real estate agent. BDM then delivered targeted speeches to him and his colleagues, opening the door to referral opportunities that have been touched.
Long-term benefits
Building a partnership with a real estate agent can take some time and effort, but the long-term rewards can be huge. These relationships can generate a warm range of prospects, increase your visibility, and position you as a trusted expert in the reverse collateral space. Plus, you will help Canadians make smarter financial decisions about their homes.
Work with Home Equity Bank
For 37 years, Home Equity Bank has been providing reverse mortgage solutions for Canadians over 55 years, such as CHIP RERVERSERTAGE. As the only bank in Canada specializing in this population, we provide unparalleled expertise and trust.
To learn more about CHIP, please contact your Home Equity Bank BDM or BDA or visit Chipadvisor.ca. You can also visit webinars on developing your reverse mortgage business through real estate broker partnerships by visiting chipadvisor.ca/webinars/.
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Last modified: June 5, 2025
