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How to get a Home Equity Line of Credit in Kitchener

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A home equity line of credit is a smart solution to managing your debt if you live in Kitchener, Ontario. Often, people do not want to admit that they are having difficulty with money. The conversation is often embarrassing and unfavourable. However, many options are available to you to deal with debts and unforeseen expenses.
A home equity line of credit (or HELOC) is a great way to borrow the equity that has built up in your home at low interest rates. Using credit cards or high-interest loans to get out of debt can lead you down a slippery slope of never ending borrowing and repaying, plus the high interest rates make is quite difficult to quickly pay off these debts. A home equity line of credit can be beneficial to you as they are a low-interest loan with flexible terms that work with you and your repayment schedule goals.

What Is a Home Equity Line of Credit?

A HELOC is a type of loan with an agreed upon fixed repayment term and interest rate that uses the buyers equity of their home as collateral. Often HELOCs are used for:
  • Education
  • Home Improvements
  • Medical Bills
HELOCs are designed more like a credit card but without the disadvantages. A set credit limit is established with the borrower and the lender. Depending on the institution , the interest rate might vary. The rate is often based on the Canadian prime rate plus the lender’s own extra rate. This can mean that the interest rate may change over time (if the lending period is for an extended amount) and should be discussed with your lender.
A HELOC tends to be more flexible than other types of equity loans, because it allows the homeowner to spend the equity of their home at any time. Some or all of the funds may be pulled, and the interest is calculated based on the amount used instead of the whole amount that the home owner has been approved for.

Benefits of a HELOC Over a Fixed-Rate Loan

  • Predetermined spending limit
  • Flexible spending
  • Zero time-based limitations
Predetermined spending limit – It is important to discuss with your financial adviser about what you intend to use your HELOC for. Whether you are looking to remodel your kitchen or help pay your child’s tuition for medical school, these goals will determine the best length of time to have your HELOC for.
Flexible spending –This can be incredibly important if your expenses are not all simultaneous. It gives you the ability to draw funds on an ongoing basis. You use your funds as you need them, and repay the interest based on what has been used – not the entire pre-approved amount.
Zero time-based limitations – A HELOC is fully open and can be paid off at any time . Your needs might be a one-time only renovation lasting a year or could be more than ten years of college for your child. The flexible time limits enable you to also repay using the pre-set minimums or make large lump-sums at your leisure.
For homeowners in Kitchener, a home equity line of credit is an ideal choice when continuous access to the equity of their home is important. The advantage of having access to immediate funds, and an interest rate lower than regular credit cards give homeowners the flexibility to take care of their most important debt needs. 


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