Home Equity Line of Credit (HELOC)
A home equity line of credit, or HELOC, is a credit facility secured on your property and acts as a revolving line of credit offered at much lower interest costs than an unsecured line of credit. In Canada, currently you cannot exceed 65% of the property’s value under the HELOC.
By tapping into the equity you have built in your home, you may already have the financial resources needed to pursue such personal goals as:
- Renovating or remodeling your home
- Consolidating high-interest debt, and lower monthly payments
- Making a down payment on the purchase of a second home or a vacation property
- Paying for children’s post-secondary education, and/or wedding(s)
- Taking a well-deserved vacation
- Investments – interest paid can be written off
he interest rate under the HELOC varies with the bank’s prime lending rate. Currently, the HELOC is offered at Prime + 0.50%. The minimum payment required monthly is interest-only. Since the HELOC is fully OPEN, you can prepay some or all of the balance you owe at any time without penalty. And, whenever you want to access your approved credit, you simply write a cheque, or you can use a client card.
The flexibility of use, and cost of interest make the HELOC a very popular product. However, a word of caution: just like any credit, if one is not cautious or good at handling credit, they could spend their hard earned equity.
For further details, please contact one of our mortgage professionals at Homefund, or complete the application (either online or the printed version) for an assessment.
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