Home Equity
Line of Credit (HELOC)
A home equity line of credit gives you access to the equity in your home at your own discretion. You are responsible for interest only payments each month on the outstanding balance that you use.
​
In many cases, Helocs are used for investments purposes but a Heloc can also be used for consolidating debt, renovating a home or for access to large amounts of pre-approved emergency funds. Actually, you can do whatever you want with a Heloc – it’s one large revolving line of credit…
​
One word of caution: it’s very easy to over borrow using your Heloc. Sound investment and borrowing decisions should be made prior to taking money out of your Heloc with planned repayment being a top priorities.
​
-
Not every lender has a HELOC product available
-
Interest is variable and tied to the bank’s prime interest rate
-
Since 2012, a Heloc’s maximum value cannot exceed 65% of the value of your home.
-
Helocs are registered on a home as a collateral mortgage (explained in the Readvanceable Mortgage section)
-
Can be included with a Readvanceable Mortgage
Re-advanceable Mortgages
​
A readvanceable mortgage lets you reborrow the principal amount paid off each month to a maximum of 80% of the value of your home.
​
The readvanceable mortgage is a combination of one or more mortgages (segments) and home equity lines of credit (HELOC).
Mortgage segments within a readvanceable mortgage are treated as a standalone mortgage, each can have different terms, amortizations and rates. Readvanceable mortgages always have at least one HELOC segment.