Canadian Home Income Plan Alternative - CHIP Alternative
The hook is undeniable "Stay in your home. Remain independent. Maintain your financial freedom. Enjoy your money now, you deserve it!"
The problem with the program is that it lends seniors at above-market lending rates - that interest has to be paid back when the homeowner sells the home. Financial planners have pointed out that interest costs can accumulate rapidly, compounding twice a year, greatly eating into home equity and bloating the loan value
Like other chips, CHIP loans offer some instant gratification - but working off the long term debt from borrowing at high rates with compounded interest could upset otherwise healthy retirement financial plans.