What is a Home Equity Line of Credit (HELOC) and is it right for me?

A home equity line of credit (HELOC) is a revolving line of credit secured by your home. You can borrow money up to the credit (global) limit, which is usually a percentage of your home’s value, not to exceed 65%. A HELOC is an option for borrowing on your home’s equity, which is the difference between the value of your home and the unpaid balance of any current mortgage.

It is also possible to get a HELOC instead of, in addition to, or containing a traditional mortgage. These products may be split into portions that you repay in different ways. For example, a HELOC may have a portion with a fixed interest rate, another portion with a variable interest rate, and the balance as an available open line-of-credit. When a HELOC is combined with a traditional mortgage, the global limit can be up to 80% of the value of the home.