Compare mortgage rates instantly.

Get financial breathing room—fast

Borrow up to 85% of your appraised property value. Access funds to pay bills or invest.

What is a HELOC or second mortgage?

HELOCs and second mortgages are types of loans backed by the value of your property, and can offer lower interest rates compared to credit cards or other loan products. They can be used to finance renovations, for a down payment on your next property or debt consolidation.

What is a HELOC or second mortgage?

HELOCs and second mortgages are types of loans backed by the value of your property, and can offer lower interest rates compared to credit cards or other loan products. They can be used to finance home renovations, for a down payment on your next property or debt consolidation.

Unlock the value of your home

  • Access up to 85% of the appraised property value
  • Get funds in as little as 48 hours
  • View offers from 30+ trusted lenders in one place
Finding the Lowest Mortgage Rates...

How to start a HELOC application

01

Sign up to Perch and add your property details

02

See how much home equity is available

03

Start your mortgage application

Don’t let your home equity go to waste


If the value of your property has risen, it’s time to put your equity to work.

The top 3 reasons for getting a home equity line of credit:

    1. Home renovations: Start your home project and enjoy your upgrades sooner
    2. Debt repayment: Transfer debt to a lower interest rate and simplify bills with a single monthly payment
    3. Investing: Unlock the perks of price appreciation. Tap into your equity to invest and generate income

Don’t let your home equity go to waste


If the value of your property has risen, it’s time to put your equity to work.

The top 3 reasons for getting a home equity line of credit:

    1. Home renovations: Start your home project and enjoy your upgrades sooner
    2. Debt repayment: Transfer debt to a lower interest rate and simplify bills with a single monthly payment
    3. Investing: Unlock the perks of price appreciation. Tap into your equity to invest and generate income

HELOC/
second mortgage FAQs

A home equity line of credit (HELOC) is a convenient way of using the excess value in your home to borrow money. A HELOC provides you with an access card that allows you to withdraw money from the existing equity in your home at a lower interest rate compared to a traditional personal line of credit that is based solely on your personal credit score and your income.

 

They are usually only offered as variable rates, however some lenders will allow you to convert part of your HELOC into a home loan with a fixed rate and term. Similar to a credit card, a line of credit is revolving credit which allows you to withdraw and pay back into your HELOC whenever you want. Typically HELOCs have interest only payments required, which you will need to pay back on a monthly basis, on top of your regular monthly mortgage payments.

 

A second mortgage allows you to borrow money against your home based on your available equity if you already have an existing mortgage. A second mortgage, just like a first mortgage, allows you to access the equity in your home without having to sell the property to access it.    It’s important to note that your existing mortgage is not affected by getting a second mortgage. In the case of a foreclosure, the primary mortgage lender will be the first to be repaid since the lender will gain ownership of the home by taking the title. A second mortgage can be in the form of a home equity line of credit (HELOC) or a home equity loan and can be a maximum combined loan-to-value of 80%.   Typically a second mortgage will have a higher interest rate compared to a primary mortgage and can be used for things such as:
A home equity loan is a fixed amount of money that you borrow based on your home equity and can have a variable or fixed rate compared to a HELOC which has a variable interest rate that changes with the prime rate.   With a home equity loan and existing mortgage, you can borrow up to a combined 80% of the value of your home. Private mortgages are offered by private lenders and are also home equity loans with less strict lending requirements.

HELOC:

  • Borrow money at any time
  • Repay the minimum monthly or pay off in full at any time without penalty – a fully open loan
  • Lower interest rates and longer term lengths vs. a home equity loan
  • Must have a good credit score

Home equity loan:

  • Borrow a one-time, lump sum amount
  • Repayments on a set schedule
  • Higher interest rates and shorter term lengths vs. HELOC
  • Bad credit scores are accepted

Home equity is the amount of ownership of a property you have established through appreciation and the reduction of your mortgage principal. The more you pay off your mortgage, the more equity you build up. 

To calculate your home equity, take the current market value of your home and deduct the remaining balance of your mortgage. For example: If you owe $200,000 on your mortgage and your home is worth $500,000, you have $300,000 in home equity.

A HELOC is a convenient way of leveraging the value in your home to borrow money. It generally offers lower interest rates and allows you to access larger amounts of money. These features are possible since they’re secured by the value of your home.

If you reside in Canada, you can borrow up to a maximum of 65% of your home’s value with a home equity line of credit. If you combine your HELOC with your mortgage, your Cumulative Loan to Value (CLTV) cannot be more than 80% of your home’s value. So if you owe 50% of your home value on your mortgage, you would be eligible for a HELOC of up to 30%.

Looking for more answers?   See all FAQs