A large number of Canadians have realized
that, after many
years of home ownership, their
mortgage balances are now very low or even paid off! This
means their largest single asset may be the
equity tied up in their home. While it’s nice to be “equity
rich", it’s also nice to have flexibility with where that money is invested.
This is the reason for the renewed popularity of the equity take out mortgage.
Equity take out financing is available for various purposes such as:
- Home renovations
- Major investments
- Second properties such as cottages, boats, etc.
- To make an RRSP top up contribution (allowed by Revenue Canada)
- And more!
The equity take out mortgage comes in two forms:
the traditional fixed rate mortgage or a variable line of credit option.
The traditional fixed rate mortgage provides stability in
interest rates for a predetermined amount of time (such as
a 5 year mortgage). It has limited prepayment options,
with a 10-15% prepayment per year being standard.
On the other hand, the variable line of credit option has a
fluctuating interest rate which is usually based on your
lending institution’s prime rate and can change at any
time. Flexible prepayment options make this form of
financing attractive.
We'll put together a recommendation and
find exactly the right mortgage for you, with the most competitive rate
and terms.