Muara Teweh!

“The Trust is strongly focused on growing its business by providing a relevant and important financial solution to an expanding segment of the Canadian population. Recent independent studies indicate that there is a marked increase in the number of senior homeowners who view that their homes are significant assets that will play a key role in their retirement financial
planning. Experience is showing that Canadian homeowners are realizing the unique benefits of a CHIP Home Income Plan,” said CEO, Steven Ranson.
“Over the years, our brand recognition and brand equity has gained traction in the Canadian market, and seniors are turning to our product in greater and greater numbers. Our strategy in this regard is straight-forward;we continue to expand our reach while enhancing the product to meet the specific needs and requirements of a broadening customer base.”
Adding to its existing list of partners, the Trust has recently signed origination referral agreements with Dundee Wealth Management and CIBC. Prospective customers throughout the country are able to access a CHIP Home Income Plan through a widening range of high profile banks, trust companies and financial planners, all of whom are able to independently advise their
clients of the benefits of the product.

Net income increased by 47% to $7.3 million mainly driven by the growth in the mortgage portfolio, consistent interest spreads, a continued focus on operational efficiency, and by capitalizing on existing infrastructure. Mortgage origination cost on a trailing four-quarter basis is within the stated target of 10% of originations, and mortgage servicing and administration expense is within the stated target of 0.8% of total mortgages. On a per-unit basis, net income per unit increased by 36% to $0.538. Distributable cash per unit was $1.19, an increase of 7% over 2005. The trailing four-quarter payout ratio has dropped consistently, and is 89.8% at
the end of 2006.

Mr. Ranson continued, “During the year the Trust again demonstrated that it is in a unique position to capitalize on its growth in market awareness, and on the increasing recognition of its solution as a valuable tool in retirement planning. With the Trust’s position as the leading provider in the reverse mortgage market, and positive momentum in business performance, we
expect to continue to benefit from the demographic trend of a rising population of seniors and their desire to remain in their homes for as long as possible.”

Annual Financial Statements

The 2006 annual financial statements are available on the Trust’s website at www.homeq.ca and www.sedar.com.

HOMEQ will hold a conference call to discuss these financial results today, February 26, 2007 at 10.00 am (Eastern).

Available on the call to answer questions will be Steven Ranson, President and Chief Executive Officer, and Gary Krikler, Senior Vice President and Chief Financial Officer.
To participate in the conference call, please dial 416-640-3406 or
1-866-322-8032.

A live audio webcast (listen-only mode) of the conference call will be available at www.vcall.com and will be subsequently posted at www.homeq.ca. An archived recording of the call will be available at 1-866-244-4494 (conference ID 299527) from two hours after the completion of the call until midnight February 28, 2007.

Non-GAAP Measures

The Trust uses a number of financial measures to assess its performance. Some measures are calculated in accordance with GAAP, such as operating margin and net income. Other measures such as distributable cash and net spread are non-GAAP measures. These measures do not have standardized meanings under GAAP and may not be comparable to similar measures used by other trusts and companies.

Forward Looking Statements

Home Equity Income Trust (”HOMEQ” or the “Trust”) from time to time makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including, in particular, the forecast of cash distributions and the likelihood of HOMEQ’s success in developing and expanding its business. These may be included in the Annual
Reports, regulatory filings, reports to unitholders, press releases, Trust presentations and other communications. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of HOMEQ. Actual results may differ materially from those expressed or implied by such forward-looking statements. HOMEQ does not undertake to update
any forward-looking statement, whether written or verbal, that may be made from time to time.

About Home Equity Income Trust

Home Equity Income Trust provides unitholders with stable monthly cash distributions from a portfolio of reverse mortgages originated by its wholly owned subsidiary Canadian Home Income Plan Corporation. The Trust’s units are rated SR-2 by Standard and Poor’s, which assigns this rating to funds that have “a very high level of cash distribution stability relative to other rated
Canadian income funds.” As of December 31, 2006, the portfolio generating cash returns to the Trust comprised approximately 6,450 reverse mortgages with an accrued value of $611.9 million, secured by residential properties across Canada worth approximately $1.7 billion. CHIP (www.chip.ca), has been the main underwriter of reverse mortgages in Canada since pioneering the concept in 1986.
The Trust’s units trade on the Toronto Stock Exchange under the symbol HEQ.UN. Additional information on HOMEQ, including annual and quarterly reports and the Trust’s distribution reinvestment plan, can be viewed at www.homeq.ca.

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