Strategy
HELOC
Also known as: Home Equity Line of Credit
Home Equity Line of Credit. A revolving credit line secured against home equity, typically priced at prime + 0.5% to prime + 1%. Variable rate. Interest-only minimum payment. Drawable on demand.
A standalone HELOC is one option; a HELOC sub-account inside a readvanceable mortgage is another. Standalone HELOCs require a fresh application; the readvanceable variant grows automatically as principal pays down.
HELOCs are the plumbing for Cash Damming (rental opex flows through one), Investment Leverage (HELOC funds buy non-registered investments), Debt Swap (HELOC re-borrows after selling investments), and Velocity Banking (paycheque routes through one). The strategy depends on which dollars touch which account, which is why the discipline of dedicated sub-accounts matters.
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