Real Estate

Getting a new HELOC? The rules just changed massively.

  • Last Updated:
  • Nov 10th, 2018 12:50 pm
[OP]
Deal Addict
Jan 2, 2015
1408 posts
438 upvotes
Toronto, ON

Getting a new HELOC? The rules just changed massively.

Several of the Big Six banks have already adopted the policy, which requires applicants to prove they can afford the theoretical monthly HELOC payment based on the limit of that HELOC, rather than the amount that has actually been used, according to RateSpy.com founder Rob McLister, who first reported the change.
Link: https://www.canadianmortgagetrends.com/ ... -mortgage/

Most of the banks will act like you have borrowed the maximum amount from your HELOC and take that into account when looking at your ability to service debt. If you already have a mortgage and want a HELOC, you will find your limits to be low, or you may not even be able to take out a HELOC.
Even though you might have a zero balance, the bank assumes you might use all of your available credit. It therefore adds a hypothetical $1,334 a month payment to the debts on your mortgage application.
(The $1,334 figure was from the example, it could be any amount.)

Link: https://www.ratespy.com/got-a-heloc-you ... k-11067208

Apparently the rule was to stop people borrowing from HELOCs to buy more real estate or to lend money to their children to buy more real estate.
2 replies
Deal Addict
Dec 23, 2010
1645 posts
778 upvotes
Moon
FoFai2015 wrote:
Nov 9th, 2018 10:43 pm
Link: https://www.canadianmortgagetrends.com/ ... -mortgage/

Most of the banks will act like you have borrowed the maximum amount from your HELOC and take that into account when looking at your ability to service debt. If you already have a mortgage and want a HELOC, you will find your limits to be low, or you may not even be able to take out a HELOC.



(The $1,334 figure was from the example, it could be any amount.)

Link: https://www.ratespy.com/got-a-heloc-you ... k-11067208

Apparently the rule was to stop people borrowing from HELOCs to buy more real estate or to lend money to their children to buy more real estate.
Actually new rules do not block people borrowing from HELOC to gift money to their kids to buy real estate. Not sure what you talking about here.

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