Mortgage or HELOC

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.