How does a HELOC work?
Money you borrow:
You can borrow up to 65% of your home’s current market value minus any outstanding mortgages on your home.
Money you use:
Say you took out a HELOC for $25,000 but you withdrew only $5,000. In this case, you’re required to pay interest only on that $5,000. The rest of the funds remain for whenever you need them. As for the $5,000, you can pay it down when you want as long as you’re making the minimum
interest payments. Unlike a term mortgage, there are no prepayment penalties for paying it off early either.
Money you pay:
HELOCs have a variable interest rate based on our Vancity Prime Rate. This means your interest payments may change month-to-month depending on the rate and how much you’ve withdrawn so far. But HELOCs are flexible. If you decide you want to change to
fixed monthly payments, you can convert all or a portion of your HELOC into a fixed-term mortgage at any time.
See interest rates