Canadians Extracted Almost Half A Trillion in Home Equity

A HELOC is a line of credit secured against your home. In Canada, homeowners can access up to 65 percent of the value of their home through a HELOC. But the sum of the outstanding mortgage balance and HELOC must not exceed 80 percent of the value of the home.

Mortgage refinancing means replacing your existing mortgage with a larger one—up to 80 percent of the value of the home.

But why are Canadians extracting money from their home equity? That’s the topic of another article, but it’s worth noting that using it to maintain an inflated lifestyle is never a good idea. However, using it to purchase real estate investments may be a good way to increase your overall net collateral.

References: https://www.bankofcanada.ca/2019/09/staff-analytical-note-2019-27