The Writing’s on the Wall for the 80% HELOC

August 13, 2012

Mortgage Monday

If you’ve been holding off looking into a readvanceable mortgage or HELOC (Home Equity Line of Credit) and are looking to use up to 80% of your home value, you’re running out of time to get it done. The new underwriting mortgage rules (that we looked at a couple of months ago) that were brought forth by OSFI (Office of the Superinterdant of Financial Institutions Canada) needed to be put into place by financial institutions by the end of their fiscal year (which is October 31st for most of them). Rumours have it, however, that some banks may be implementing the new HELOC changes as early as the end of this month.

This means that, instead of the 80% equity that you can currently pull out, you’ll be limited to 65%. OSFI says that existing HELOC customers will be grandfathered in, however – so get approved now while you can (if re-borrowing up to 80% of your home value is important to you, of course).  Have a chat with your favourite mortgage broker about what your readvanceable mortgage or HELOC options are – that extra 15% that will disappearing soon could save you tens of thousands of dollars in interest or earn you just as much in investment income.  So if you’re on the fence, now’s the time to make a decision on a readvanceable mortgage or HELOC – you could be capped at 65% by many lenders by the end of the month.

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About Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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One Response to “The Writing’s on the Wall for the 80% HELOC”

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