CHIP Home Income Plan (CHIP) has announced additional product enhancements to help those over 60 maintain long-term financial security during their retirement.

For over 20 years, CHIP has been an industry leader in home equity lending to seniors, enabling access of up to 40% of a home’s value in tax-free cash with no income, credit or medical qualifications. CHIP is now providing an even greater range of benefits to homeowners over 60 who want to generate more income, preserve investment assets and enhance their lifestyles.

CHIP is introducing a variable interest rate with no fixed term. The new variable rate will be based on the bank prime interest rate plus 2%. Effective today, the new variable rate is 6%. “This new variable rate will provide clients with flexibility to take advantage of low and declining interest rates,” says Steven Ranson, CEO and president, CHIP.

Complementing its existing 6-month, 1-year and 3-year interest rate terms, CHIP has also added a new 5-year interest rate term for clients who wish to lock in their interest rate for a longer period of time. The longer fixed terms provide clients with more certainty and protection in a rising interest rate environment.

To further help clients, CHIP has also established an interest payment discount of 1% for those who pay their full annual interest. Clients can take advantage of the interest payment discount along with the existing, long-term escalating discount to a maximum reduction of 1.5%. At current rates, the combination of the interest payment discount and the long-term escalating discount would result in a variable interest rate as low as 6.5% — with an option to cease interest payments at any time and maximize their cash flow.

“Although no interest payments are required with the Canadian Home Income Plan, this new discount will allow clients who want to make regular interest payments to lower their borrowing costs, while keeping their long-term cash flow management options completely open,” notes Ranson.