TORONTO, Nov. 9 /CNW/ - HomEquity Bank (Banque HomEquity), Canada's newest chartered bank, today announced that it is has significantly reduced its variable rate on CHIP Home Income Plans to 3.75%(x), signalling a transformative change in the acceptance of reverse mortgages as a viable tool within the financial solutions landscape. The significantly lower cost of borrowing gives today's cost-conscious seniors more flexibility in how their home equity can be used to enhance their retirement lifestyles.

"Canada's seniors market is the fastest growing segment of the population and we have a proven track record of providing innovative solutions to meet seniors' financial needs," said Greg Bandler, Senior Vice President, HomEquity Bank. "Our dramatically lower rate of 3.75% builds on our commitment of putting stable long-term borrowing within the reach of Canadian seniors."

A reverse mortgage is designed for Canadian homeowners 60+ who wish to tap into the equity built up in their homes. The new 3.75% rate positions CHIP Home Income Plan as an attractive long-term home equity based borrowing solution. Customers will find it less expensive to create additional cash flow to supplement monthly income. Seniors can preserve existing assets by using CHIP funds to avoid RRIF withdrawals above the annual minimum or the sale of non- registered investments. They can also choose a reverse mortgage to discharge existing debts to increase monthly cash flow.

HomEquity Bank also offers a discount program that further reduces the interest rate on a CHIP Home Income Plan to as low as 3.25%(x) to customers who pay their full interest annually.

These significantly lower rates are made possible by HomEquity Bank's debut last month as Canada's newest chartered bank. In becoming a Schedule I Bank, the company has gained immediate access to retail deposits sourced through deposit brokers, both diversifying its sources of funding and lowering the cost of borrowing.

"Becoming a Schedule I Bank has allowed us to lower our rates because we now raise funding the same way that other banks do," explained Mr. Bandler. "We are thrilled to be in the position to offer such a compelling financial solution and look forward to servicing the growing demand in this key market segment. The true beneficiaries are Canadian seniors, who now have a low-cost, stable, long-term borrowing solution giving them peace of mind that their home equity will be there for them whenever they need it."

(x)See Annual Percentage Rate section for further information

Annual Percentage Rate

The interest rates compound semi-annually.