Loans Canada Services Are 100% Free. Disclaimer

HELOC Victoria 2019

Compare the best lenders in this region:
ProviderRating
4 / 5
Pylo Finance 4 / 5
Fresh Start Finance 4 / 5
Marble Finance 5 / 5
Money Mart 4 / 5
Private Loan Shop 5 / 5
Progressa 3 / 5
My Canada Payday 5 / 5
Mr. Payday 4 / 5
Money Provider 5 / 5
Loan Express 3 / 5
Loan Away 4 / 5
Lendful 3 / 5
LendDirect 5 / 5
Health Smart Financial Services -
GoDay 4 / 5
iCash 5 / 5
Focus Financial Inc. 2 / 5
FlexFi 5 / 5
Eastern Loans 5 / 5
DMO Credit 5 / 5
Capital Cash 2 / 5
Credit 700 2 / 5
Credit Club 5 / 5
Credit2Go 3 / 5
Ledn 5 / 5
Amber Financial 5 / 5
Affirm Financial 5 / 5
310 Loan 2 / 5
Newstart Canada 4 / 5
Ferratum 5 / 5
SkyCap Financial 4 / 5
Fairstone 2 / 5
Lending Mate 4 / 5
Consumer Capital Canada 4 / 5
Lamina 3 / 5
Loans SOS -
514 Loans 5 / 5
CashCo 5 / 5
UrLoan 5 / 5
Loan Me Now 4 / 5
Captain Cash 4 / 5
BC Loans 4 / 5
Urgent Loans 4 / 5
Easy Financial 3 / 5
Mogo Finance 4 / 5
Cash Money 5 / 5
Borrowell 5 / 5
Magical Credit 5 / 5
Speedy Cash 5 / 5
ProviderRating
SharpShooter Funding 5 / 5
First West Credit Union 5 / 5
Meridian Credit Union 5 / 5
Laurentian Bank of Canada 5 / 5
HSBC Bank Canada 5 / 5
National Bank 5 / 5
Canadian Imperial Bank of Commerce (CIBC) 5 / 5
Scotiabank 3 / 5
Bank of Montreal (BMO) 3 / 5
Royal Bank of Canada (RBC) 5 / 5
CWB National Leasing 5 / 5
Money in Motion 5 / 5
Lease Link 5 / 5
FundThrough 5 / 5
Econolease Financial Services Inc. 5 / 5
Easylease Corp 5 / 5
Dynamic Capital 5 / 5
Capify 5 / 5
Canadian Equipment Finance 5 / 5
Capital Key 5 / 5
Cashbloom 5 / 5
BFS Captial 5 / 5
BDC 2 / 5
Baron Finance 5 / 5
B2B Bank 5 / 5
AOne Financial Solutions 5 / 5
Borrowell 5 / 5
iCapital 5 / 5
Lendified -
IOU Financial 5 / 5
Company Capital 5 / 5
OnDeck 5 / 5
Evolocity 5 / 5
Lending Loop 5 / 5
Thinking Capital 5 / 5
ProviderRating
Canada Car Loans -
Car Loans Canada -
Car Creditex -
Auto Capital Canada 5 / 5
Carfinco 5 / 5
Canada Drives 5 / 5
Prefera Finance 5 / 5
Approve Canada 5 / 5
2nd Chance Automotive 5 / 5
Newstart Canada 4 / 5
SkyCap Financial 4 / 5
Splash Auto Finance by Rifco 5 / 5
Carloans411 5 / 5
AutoArriba 5 / 5
ProviderRating
Newstart Canada 4 / 5
BHM Financial 5 / 5
ProviderRating
CMLS Financials -
CHIP Reverse Mortgage -
CanWise -
Centum 5 / 5
Broker Financial Group Inc. 5 / 5
Bridgewater Bank 5 / 5
Alpine Credits 5 / 5

Although Victoria, like most of British Columbia, has very expensive housing prices, it can be well worth it to buy a home there, seeing as how it’s also been rated as one of the best cities to live in Canada. That said, there is another major benefit that comes with the prospect of homeownership and that is the chance to build home equity.

That’s right, if you have a certain percentage of equity built up in your property, you can potentially tap into it and use it for all sorts of expenses. Interested in knowing more? If so, keep on reading.

Should I Apply for a HELOC or Home Equity Loan?

When it comes to tapping into your home equity, there are two products to choose from, a home equity line of credit (HELOC) or a home equity loan.

Home Equity

Now, before we discuss these options, here’s a quick rundown of home equity in general. Traditionally, you can build home equity by paying down your mortgage, as well as adding value to your home through additions or renovations. The property itself can also gain extra value when your neighborhood becomes an in-demand area, which can drive housing prices up.

Once you’ve built a minimum of 20% equity, it becomes an asset that you can offer to a lender in exchange for a similar amount of credit (minus the cost of interest and other fees). As we said, you can then withdraw from that fund using one of the two products listed below.

Planning to borrow using your home equity? Check this out. 

HELOC

A home equity line of credit functions a lot like a personal line of credit or common credit card, meaning you’ll have a revolving credit limit that you can withdraw from whenever you’d like and repay on a monthly basis. This can be highly beneficial because you’ll only have to pay interest on the amounts you’ve borrowed, unlike with the next option.

In addition, some HELOCs can last for decades under the appropriate circumstances and can be the best financing tool when you’ve got ongoing expenses, such as general home maintenance, renovations, investment programs, and various taxes.

Read this to learn how you can get the best rate for your line of credit.  

Home Equity Loan

A home equity loan, on the other hand, is more like a traditional installment loan. So, instead of having a set credit limit, a lump sum of money will be deposited directly into your bank account. That money will be accompanied by a repayment term and fixed interest rate (some lenders offer variable rates too), the length of which you’ll discuss with your lender. Again, you’ll typically need to have built up at least 20% equity before you can qualify.

Repayment periods are usually less lengthy than the average HELOC but are a better choice for homeowners who have larger, more short-term expenses to deal with, such as buying new furniture or appliances or to consolidate a large amount of debt all in one go.

Cost of Buying a House in CanadaInterested in knowing how much it costs to buy a house in one of Canada’s major cities? Check this out

What is a Second Mortgage?

During your study of home equity products, it’s possible that the term “second” mortgage has come up at some point. This idea can be a little confusing as neither a HELOC or a home equity loan can technically qualify as a mortgage in the traditional sense. Nonetheless, all three products are comparable because of the ways you would go about applying for and repaying them.

Trying to find a traditional mortgage in Victoria? Check this out.  

The process is labeled as such because both a HELOC and a home equity loan would fall into the second position next to your primary mortgage. That is if your first mortgage has not yet been paid in full. Typically, you can do this through your original lender or a secondary source if you’re looking for a better rate. The effect, however, is the same, in that you’ll have two mortgage products listed on your credit report.

Be careful, because this means you’ll also have two sets of payments to keep up with. If you should default and your home is foreclosed, the primary lender would be compensated first, possibly leaving the secondary source with nothing. Therefore, it’s important to only take out a second mortgage when you’ve got totally necessary costs to cover and you’re 100% certain that your income can justify both sets of payments, interest rates, and fees involved.

All this said, the idea of a second mortgage is more often associated with home equity loans, simply because the process itself is more comparable, being that you’ll be granted a certain loan amount that you’ll have to pay back through regular installments.

Learn how to apply for a second mortgage in Canada, click here.

What Else Can I Use My HELOC For?

Although a home equity line of credit can be used for almost any expense that comes your way, remember that you’re a homeowner and you’ve already got a ton of costs to think about. Racking up more debt than you can comfortably handle will simply result in unwanted stress and financial turmoil.

Take a look at some of the hidden costs of buying a home.

Therefore, it’s important to only use the funds you’ve been given for things that are absolutely essential, such as:

  • Taking care of your outstanding debts
  • Maintaining, repairing, and fuelling your vehicle
  • Fixing broken appliances or other home items
  • Buying groceries and household supplies
  • Books, tuition, and other educational costs
  • Paying your utility bills

Trying to retire with a mortgage in Canada? Try reading this.

Interested in a HELOC?

If so, there’s no better place to search for one than right here at Loans Canada. We can help you connect with home equity lending sources in your corner of Victoria. Contact us today for more information about the HELOC process or apply below when you’re ready!

FAQs

What happens if I miss a mortgage payment?

  • Missing a mortgage payment will affect your finances in two ways. A missed payment will be reported to the credit bureaus and negatively impact your credit score. And your lender could potentially charge you a late fee. If you know you won’t be able to make a loan payment on time, make sure you speak with your lender.

What is home equity?

  • Home equity is the percentage of your home that you actually own. As you pay down your mortgage (or if the market value of your home increased), your home equity or the percentage of your home that you own goes up. Home equity is valuable because you can use it as collateral to borrow against.

What credit score do I need to qualify for a mortgage?

  • Generally speaking, in Canada most banks and traditional lenders will require a minimum credit score that falls somewhere between 620 and 680.

How do I find out how much equity is in my home?

  • In order to gain access to your home equity via a home equity loan, HELOC, second mortgage, etc. a professional appraisal must be performed, which will determine the value of your house. But, if you’re interested in having a general idea of the amount of home equity you’ve built up, subtract your remaining mortgage balance from the price you paid for your house.

How useful was this post?

Click on a star to rate it!

Posted by
Bryan completed the Cinema, Video, and Communications program in Dawson College and holds a Bachelor’s Degree in English Literature & Creative Writing from Concordia University. Bryan covers a wide range of topics for Loans Canada, including credit improvement, debt management, and all things related to personal finance. In his spare time, he maintains a passion for editing, writing film and television screenplays, staying fit, and traveling the world in search of the coolest sights our plan...

Services In This Region
Regional Service Directory
From the blog...
Make Sure You Understand These Financial Terms Before Getting a Loan
Posted on November 19, 2019

Make Sure You Understand These Financial Terms Before Getting a Loan

Taking on a loan is a serious financial decision, make sure you understand these terms first as they will help make the process as smooth as possible.

Can I Pay Off My Loan Early?
Posted on October 31, 2019

Can I Pay Off My Loan Early?

Thinking about paying off a loan early to save on interest or to get rid of any debt you have? Loans Canada has all the information and advice you nee... Read More

How Can I Get a Lower Interest Rate on a Loan?
Posted on September 26, 2019

How Can I Get a Lower Interest Rate on a Loan?

From our friends at Fairstone Financial, everything you need to know about how to get a lower interest rate on a loan.

Related Videos
How To Identify A Loan Scam
How Your Credit Score is Calculated
The Ins & Outs of Debt Consolidation
Note:

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster.

Loans Canada and its partners will never ask you for an upfront deposit, upfront fees or upfront insurance payments on a loan. To protect yourself, read more on this topic by visiting our page on loan scams.