Real Estate

Mortgage or HELOC

  • Last Updated:
  • Jul 13th, 2021 3:16 am
Feb 1, 2013
92 posts

Mortgage or HELOC

Hi folks. Property is paid off. Can we get a mortgage against it again? or is HELOC the only option?

Thanks for your insights.
1 reply
Sr. Member
Dec 13, 2010
954 posts
You can get either, assuming you have the income to qualify. Which one to use depends on what you want to use the borrowed funds for.

Use a mortgage term if:
  • you know exactly how much you want to borrow all at once
  • want access to the lowest interest rates
  • are okay with paying back both principal and interest each month
  • need to borrow more than 65% and up to 80% of your home value

Use a HELOC if:
  • you only want to withdraw funds slowly as you need them, or are unsure of how much you need all at once
  • want the ability to pay interest only (no principal) each month
  • prefer to be able to pay off the HELOC at any time, without penalty
  • only need to borrow up to 65% of your home value

Essentially a HELOC is more flexible than a mortgage, but comes with a higher interest rate, as well as a limit of 65% LTV available to borrow. Most banks also allow you to convert large HELOC balances into term portions, so you aren't necessarily stuck with a HELOC only if you go that route.