Home Equity Loans & HELOCs in kelowna

Your home is likely the largest investment you’ll ever make—and over time, it can also become one of your most flexible financial tools. A home equity loan or home equity line of credit (HELOC) allows you to access the value you’ve built in your property, often at interest rates far lower than credit cards or unsecured loans.

While borrowing against your home may sound complex, the process is generally straightforward for many Canadian homeowners. Understanding how home equity works can help you use it strategically and responsibly.

Home equity represents the portion of your home that you truly own. It’s calculated as the difference between your property’s current market value and any outstanding loans registered against it, such as your mortgage.

Equity isn’t static—it grows and changes over time based on several factors, including:

• Changes in property value due to market conditions
• Mortgage payments that reduce your outstanding balance
• The size of your original down payment

The longer you own your home and consistently make payments, the more equity you typically build. Homes purchased with a larger down payment—especially 20% or more—often accumulate usable equity more quickly.

Borrowing generally falls into two categories: unsecured and secured.

• Unsecured credit (such as credit cards or personal loans) does not require collateral but usually carries higher interest rates and stricter qualification criteria.
• Secured credit uses an asset—such as your home—as collateral, allowing access to larger loan amounts at lower interest rates.

A HELOC is a form of secured, revolving credit tied to your home. It allows you to borrow funds up to an approved limit, repay them, and borrow again as needed. Interest is charged only on the amount you actually use, not the full approved limit.

HELOCs are popular because of their flexibility and relatively low borrowing costs. While funds can be used for almost any purpose, common uses include:

• Consolidating higher-interest debt
• Financing home renovations or improvements
• Covering large or unexpected expenses

Many homeowners use HELOCs for renovations because improving the property can increase its value—potentially replenishing the equity used in the process.

HELOCs typically have variable interest rates that are tied directly to the lender’s Prime rate.

Unlike variable-rate mortgages (which are Prime plus or minus a discount), HELOC rates are generally structured as Prime plus a margin. As Prime changes, the interest rate on the HELOC adjusts accordingly.

Canadian lending rules limit how much equity can be borrowed against a home.

In general:

• A HELOC on its own is capped at 65% of the home’s appraised value
• The combined total of your mortgage and HELOC cannot exceed 80% of the home’s value

To estimate your available HELOC limit:

1. Take your home’s estimated market value
2. Multiply it by 80%
3. Subtract your current mortgage balance

The remaining amount represents the maximum combined borrowing allowed, subject to the 65% HELOC limit.

A home equity line of credit can be a controlled and cost-effective way to access funds, particularly for debt consolidation or home improvements. When used responsibly, it can improve cash flow, reduce interest costs, and provide financial flexibility.

That said, because your home is used as security, it’s important to have a clear repayment plan and long-term strategy before borrowing.

Home equity loans and HELOCs allow homeowners to unlock the value they’ve built over time—without selling their property. When structured properly, they can be a powerful tool to support your financial goals.

If you’re considering accessing your home equity and want to understand how much may be available, along with the pros and cons of each option, professional guidance can help ensure the decision aligns with your overall financial plan.

Let’s review your equity position and explore whether a HELOC or home equity loan makes sense for you.