Home Equity Line of Credit in Vancouver

HELOC Explained

A home equity line of credit (HELOC) is secured revolving credit line. When we say it's "secured," it means that your home serves as collateral for the loan, so if you fail to make payments, the lender has the right to take possession of your home. The term "revolving" means that you have access to a set credit limit but are not required to use it all at once. For example, you could borrow a portion of your limit for renovations and then borrow more in the future towards your child’s education. Think of a HELOC as a credit card with more favourable terms.

Payments for a HELOC are interest-only for the amount you use. You don’t pay for funds you don’t utilize. For example, if you have a $100,000 HELOC limit and decide to withdraw $20,000 for renovations, you’re only required to make interest-only payments on the $20,000. Like a credit card, you can pay off your HELOC balance at anytime with no restrictions.

You can combine a HELOC with your mortgage or you can get a stand alone HELOC. Choosing a mortgage + HELOC component is the most popular choice. You’ll be making regular principal + interest payments on your mortgage. As you pay down the principal balance of your mortgage, you’ll begin having access to a home equity line of credit. Your HELOC limit will increase after each regular mortgage payment, capped at 65% of your home appraised value.