What Is a HELOC?
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured against your home's equity. You can borrow up to 65% of your home's appraised value (less any outstanding mortgage balance), at interest rates typically much lower than personal loans or credit cards.
How It Works
Unlike a mortgage where you receive a lump sum and make fixed payments, a HELOC gives you a credit limit you can draw from and repay repeatedly. You only pay interest on what you've drawn. During the draw period, you can borrow, repay, and borrow again as your needs change.
Common Uses
- Home Renovations: Kitchen, bathroom, basement finishing โ improvements that add value
- Debt Consolidation: Pay off high-interest credit card debt at a fraction of the interest rate
- Investment Property Down Payment: Use equity in your home to purchase a rental property
- Education: Fund post-secondary education for yourself or your children
- Emergency Fund: A HELOC as a safety net โ access funds only if needed
- Business Investment: Capital for your business
HELOC vs. Refinancing
A HELOC and a refinance are both ways to access home equity, but they work differently. A refinance replaces your entire mortgage with a new one (at a new rate and term). A HELOC sits alongside your existing mortgage as a separate credit facility. I'll help you determine which approach best fits your situation and goals.
Qualifying for a HELOC
To qualify, you generally need at least 20% equity in your home, good credit, and income to support the payments. I'll assess your situation and find the HELOC product with the best rate and terms from my lender network.