Tapping into Canada’s Fastest Growing Segment:Exploring New Market Opportunities

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CHIP was established in 1985

2009- Canada’s Leading National Reverse Mortgage Provider becomes a Schedule 1 Chartered Bank

Only Canadian National provider of CHIP Home Income Plan

2014 projection: To fund 334,000,000

CHIP and HomEquity Bank….who are we?

Where does HomEquity Bank receive their CHIP clients?

Consumer Call Center

Banks & Credit Unions

Mortgage Brokers

Financial Planners

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Canada’s Fastest Growing Market Segmentand OpportunitySeniors are the fastest growing segment of Canada’s population

There are 6.8 million seniors (60+)1

19% growth in the next 6 years1

Approximately 1,000 people turn 60 every day2

With a growth rate of 29%, Canadians between the ages of 60 and 64 are the fastest growing group3

50% chance of living to 92

51% carrying debt into retirement

61% want to stay in their homes

50% believe they will run out money within 10 years

1 HRSDC calculations based on Statistics Canada, 2011

2 Statistics Canada. Table 051-0001 - Estimates of population, by age group and sex for July 1, 2010

3 Highlights of "Canada’s aging Boomers place new strain on pensions, health care: Census" Released by Postmedia News May 29th, 2012

Brokers Fastest Growing Opportunity

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Investment Assets (Reg/non-Reg) 23%

Home Equity 77%

77% of a senior’s net worth is home equity7

1.4 million seniors own their own home and are mortgage free8

84% of seniors don’t want to move9

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What do These Clients Look Like

Opportunity for Mortgage Brokers!

No Opportunity to pay for Life Events- medical care, home repairs

Retired with debt and looking for payment options

Have not saved enough to maintain lifestyle for the next 30 years

Portfolio has not performed as well as planned

Considering downsizing/right sizing

Want to travel

Want to buy a second home- Snow birds

Help children or grandchilden purchase a home

What information is needed to Qualify for a Reverse Mortgage?

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1. Client(s) Birthdates

2. Property address including postal code

3. Property type

4. Property Value

No income…….No Credit

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CHIP Home Income Plan Solution- Major Features

Eligibility

Value

Flexibility and Choice

Ownership and Estate Protection

Homeowners age 55 and older No income qualification No credit requirements

Qualify for up to 50% of the home’s value Money can be received as a lump sum or over time or combination Tailor to suite your needs

No payments required until the house is sold or both owners move out Clients have the option to repay the principal and interest in full at any

time Clients also have option to pay interest monthly

Owner maintains title They can move or sell any time Amount to be repaid is guaranteed not to exceed the fair market value

of the home at the time it is sold

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CHIP Home Income Plan Solution Costs

Appraisal cost: $235 - $400

Independent legal advice:

$300 - $600

Set up Fees $595 to $1995

Interest rates prime +1 ¼ to 5.49%

Greater VancouverAverage Annual Home Value Increase rates

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1980 81 82 83 84 85 86 87 88 89

1990 91 92 93 94 95 96 97 98 99

2000 1 2 3 4 5 6 7 8 9 10 11 12

2013

Historical data provided by: Real estate Board of Greater Vancouver Jan 2014

13 years 2000 - 2013 + 12. 8 % average Annual Increase 23 Years 1990 - 2013 + 10. 4 % 33 Years 1980 - 2013 + 20. 2 %

Common MisconceptionNo equity

How does a Canadian Home Income Plan

Reverse Mortgage work?Page 11