20 February 2018

Canadian borrowers can use up to 65% of their homes’ value with the help of HELOC. As a rule, the money is spent on renovations, investing, and consolidating debt, says FCAC’s June 2017 report.

According to OSFI, 46% of all secured loans given for non-business purposes, were secured by real estate.

The popularity of HELOCs can be explained by their lower interest rates compared to other loans. However, they are also more exposed to changes in borrowing costs as they depend on prime rates.

Now, Canadians have about 3 million HELOC accounts. The average outstanding balance on this type of loan is $70,000, and FCAC warns about the growing vulnerability of borrowers to higher rates and a possible real estate market correction.