Equity Take Out Mortgages give you access to the equity in your home to invest as you see fit! Many Canadians have realized that, after years of home ownership, they have substantial equity in their home. In fact their largest single asset may be a large amount of equity tied up in their home. While being in an “equity rich” position is nice it may not always be the best use of your money.
This is where an “equity take out” mortgage can be very useful. “Equity take out” financing is available for various purposes such as:
- Home renovations
- Major investments
- Second properties such as cottages
- Boats & RV’s
- To make an RRSP top up contribution (allowed by Revenue Canada)
- And more!
The equity take out mortgage comes in two forms: the traditional fixed rate mortgage or a variable line of credit option.
The traditional fixed rate mortgage provides stability in interest rates for a predetermined amount of time (such as a 5 year mortgage). It has limited prepayment options, with a 10-15% prepayment per year being standard.
On the other hand, the variable line of credit option has a fluctuating interest rate which is usually based on your lending institution’s prime rate and can change at any time. Flexible prepayment options make this form of financing attractive.
To find out if an Equity Take Out Mortgage is right for you Contact Us directly.