Home Equity Lines-of-Credit
- A Home Equity Line-of-Credit or HELOC is a revolving line of credit. Similar to using a credit card in that it is revolving credit which withdraws funds as cash for purchases. Upon withdrawal of funds, the minimal interest payment required will be calculated on the drawn balance. A HELOC is a secured loan against the equity in your home. The rates are much lower than credit card interest rates.
- In Canada, you can access up to 65% of the value of your home through a home equity line of credit. However, it's also important to remember that your outstanding mortgage loan balance + your HELOC cannot equal more than 80% of the value of your home.
- With a home equity line of credit, the entire credit available is not advanced upfront. Instead, you can use as much or as little of the HELOC as you choose, and you only pay interest on the amount you withdraw. Interest is calculated daily at a variable rate attached to Prime lender rates.
- Our Mortgage Brokers at Prairie West Mortgage Group can help guide you to ensuring the HELOC solution is right for you.