Home equity Line of Credit

A home equity line of credit (also called a HELOC or Creditline Mortgage) is a line of credit secured by your home. It lets you borrow against your home’s equity at a lower interest rate than other personal loans. Equity is the market value of your home after deducting any amounts owed, like your mortgage.

If you have a lot of equity but not so much liquid cash, a HELOC can let you use your assets more flexibly. Homeowners often use home equity to finance home improvements that may raise property value or keep it on standby as part of their emergency expense plan. But unlike a term mortgage, there are no restrictions on how you can use a HELOC. It’s your equity to use your way.

How does a home equity line of credit work?

A HELOC gives you access to your equity any time you need it, but you only pay interest on the money you use. If you open a HELOC, you won’t pay anything until you withdraw money from it.

For example, if you take out a $25,000 HELOC but only withdraw $5,000, you only pay interest on that $5,000. But the rest of the funds will still be there whenever you need them. HELOCs offer a revolving line of credit with variable interest rates. That means you can borrow as much or as little of your HELOC whenever you want, but your monthly payments could change month-to-month depending on the current rate and how much you’ve borrowed so far. They also offer more flexible payment options. You can choose to just pay the interest or pay the full outstanding balance right away. Or you can convert all or part of a HELOC into a fixed-term mortgage at any time to take advantage of fixed monthly payments.

HELOCs are convenient and easy to use since you can access your funds at any time and there are no restrictions on how to use them.

How much can I borrow on a home equity line of credit?

Your HELOC’s credit limit depends on how much equity you have, but it can be up to 65% of your home’s current market value.

Benefits of a home equity line of credit with Vancity

With a Vancity HELOC you can enjoy:

• Access to your home equity whenever you need it
• No set-up fees or principal repayment penalties
• Revolving credit line with competitive, variable interest rates
• Only pay interest on the money you withdraw
• Convert to a fixed-term mortgage at any time
• Access your funds through cheques, ATMs, online, or telephone banking

Tap into your home’s value

If you want convenient, flexible access to your home equity for renovations, education costs, or just for a rainy day, a HELOC could be for you. You can find out more or apply for a HELOC by speaking to one of our mortgage specialists.