Accessing my Home Equity
The equity you’ve built up in your home is a powerful tool that you can access to help you reach important goals in life or bridge a temporary gap in your cash flow. For example, you may take out your home equity for a down payment on an investment property, to renovate your house, consolidate debts, invest for tomorrow or pay for your children’s post-secondary education. Your home equity can make it possible.
There are a few different options when accessing your home equity. Find out which one is right for you.
A mortgage from BMO® Bank of Montreal will allow you to refinance and borrow up to 80% of the current property value of your home (provided you occupy the home). If you do not occupy the home you want to refinance, we can take equity out on a case-by-case basis. The amount borrowed is added to your existing mortgage balance.
A common reason for refinancing your mortgage is to consolidate high interest debt and lower your overall monthly payments. By consolidating your debt, you will save money and have one manageable payment.
If you have a large amount of equity built up in an investment property, it is a good idea to refinance the property and take out as much equity as possible, because the interest you pay on your investment property’s mortgage is a tax write off, it is a better choice to pay off your primary property’s mortgage first or invest the extra money by buying another rental property.
If you have a lot of equity in your home, you may want to consider one of these different options. They allow you to access up to 65% of your home’s current value as a revolving line of credit through a Homeowner ReadiLine® or a Homeowner’s Line of Credit account.
Understanding a Homeowner’s Line of Credit
Use the home equity you’ve built to get access to a secured line of credit. When you set up a Homeowner’s Line of Credit, you’ll be able to borrow against a set credit limit up to 65% of the value of your home at our low variable interest rate.
If you already have a mortgage on your property when you apply for a Homeowner’s Line of Credit account, you can still be approved provided that the total amount of the mortgage plus the credit limit of the Homeowner’s Line of Credit does not exceed 80% of the value of your home. Certain conditions apply. Please contact us for details.
The significant benefit of a Homeowners Line of Credit is that you do not have to break your current mortgage contract to access the equity you have built in your home. This type of secured credit line can coincide with your current mortgage and be registered in second position on your land title. You can avoid breaking your existing mortgage term and paying a penalty by choosing this product.
Understanding a Homeowner ReadiLine®
Homeowner ReadiLine® allows you to access up to 80% of the value of your existing home or a newly purchased home through a mortgage and secured line of credit that work together. As you pay down your mortgage, your equity will automatically become available to you as an increasing revolving line of credit (up to 65% of the value of your home) in your Homeowner ReadiLine® account.
You can fully customize your Homeowner Readiline® by choosing mortgage segments and line of credit segments within the Homeowner Readiline®. Each mortgage segment can be a different term, mortgage amount, amortization and payment schedule. This is beneficial when keeping track of your finances. For example, if you bought a car with the line of credit and you want the borrowed amount to be paid off in 5 years. You can choose a 5 year amortization on a mortgage segment and a 5 year fixed rate to ensure your payment will not change. You can easily keep track of the borrowed amount and make sure your goals are being met.
These borrowing solutions offer convenient, flexible, and cost-effective ways to use the equity you’ve built up in your home.