Don’t Let Your HELOC Get You Down! We Have Solutions for Every Situation

We Have a HELOC Solutions for You!

You may have heard that things just got a little more complicated for Canadians with a home equity line of credit (HELOC) seeking a new mortgage. Despite what recent headlines might say, you aren’t stuck between a rock and a hard place if you have a HELOC.

First, let’s take a look a what is changing.

Several of the big banks—including TD, RBC and First National—have applied a stricter approach for mortgage applicants who already have a line of credit backed by their home. The banks are now vetting these borrowers based on their HELOC’s credit limit rather than their outstanding balance.

How exactly will that work?

Previously, if you have an existing HELOC with a $100,000 limit but $0.00 balance, most lenders would simply use $0.00 as your repayment.

But under the new rules, the bank will assume you’ll leverage that HELOC in the future and qualify you based on the limit—even if you haven’t touched a penny of it.

Applicants will also need to pass a “stress test,” similar to the mortgage stress test, to ensure they can repay the debt at a higher interest rate.

But that doesn’t mean you are stuck in your current situation if you have a home equity line.

Don’t get us wrong, HELOC’s are convenient for funding things like home improvements or paying down more expensive consumer debts. But the banks have long been selling this type of loan as a “value add” to homeowners, leading to an average of $65,000 in HELOC debt for Canadians.

With a little Mortgage Savvy, not only will we connect you to lenders who aren’t adopting these stricter policies, we can help you secure a lower rate and reduce or close your line of credit.

We have access to lenders who can help you get rid of your mortgage and HELOC balance in one shot and transfer it to a competitive rate, helping you to pay down your debt and secure your financial future.

Remember, we’re here to help you improve your financial situation with sound feedback and advice. We don’t just work with the big banks, we have access to over 40 lenders who give us the flexibility to craft a solution for your unique situation.

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