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Using the equity in your home

If you’re a homeowner, your house may be your most valuable asset, and you may be able to tap into some of that value through your home equity.

A Home Equity Line of Credit (HELOC), like the TD Home Equity FlexLine, allows you to use the equity in your home to pay for something big (like renovations) or to consolidate debt. We can help you decide if a HELOC makes sense for your unique goals.

4 questions to ask yourself before using the equity in your home

Just like buying a house and applying for a mortgage, using your home equity is a big decision. A HELOC uses your home as collateral, so you’ll want to make sure you understand how it works and whether it’s the right option for you.

To help you decide, we’ve put together a few questions to consider.

1. What do you need to borrow money for?

There are a lot of good reasons you might be interested in using the equity in your home. Here are a few common motivations:

  • Consolidating your debt
  • Paying your tuition or paying off your student loans
  • Making home repairs or renovations
  • Making a large purchase, such as a car

It's good to know that because a HELOC is secured against your home it often comes with an interest rate that's lower than other unsecured credit products.

2. How much home equity have you built?

Home equity is the difference between what you owe on your mortgage and what your home is currently worth. You build equity in your home each time you make a payment toward your mortgage’s principal balance.

Your equity can also increase if the market value of your home increases. Not sure how much your house is worth? You can check out recent sales of comparable homes in your area to get an idea, but a lender will want to evaluate your property's worth themselves. At TD, this will be a part of your TD Home Equity FlexLine application process and will help your TD Mortgage Specialist determine how much you can borrow.

3. How much can you borrow?

With a TD Home Equity FlexLine, you may be able to borrow up to 80% of your home value if you opt for a Term Portion at set-up, compared to the maximum 65% in the Revolving Portion (the credit limit).

Let's say your mortgage principal balance is currently $275,000. After some strategic renovations, your house now gets appraised for $500,000. In this situation, you’ll be able to borrow up to 80% of the appraised value less your mortgage principal balance. Using this example, you may be able to access up to $180,000 in credit if you set up a Term Portion with your TD Home Equity FlexLine. If you choose to go with only a Revolving Portion, using the same example you'd be able to access up to 65% of the appraised value of your home or $146,250 in credit.

Depending on why you're borrowing in the first place, you may know exactly how much you want to borrow, or you may want to add a cushion for any future borrowing.

Try out our affordability calculator to get an idea of how much you can afford to borrow.

4. What type of flexibility does the TD Home Equity FlexLine provide?

With a TD Home Equity FlexLine, you do have flexible options. You get a Revolving Portion and then can choose to add a Term Portion—or more than one Term Portion—based on your unique needs. Here's how it works:

  • With the Revolving Portion, you get access to available credit up to your credit limit. That means you would be able to make withdrawals as needed, up to your set credit limit*. You’ll have a competitive variable interest rate based on the TD Prime Rate.
  • You also have the option of a Term Portion, which is more like a traditional mortgage loan. You can choose either a variable or a fixed interest rate, each with a set repayment schedule. You can set up a Term Portion when you apply for your TD Home Equity FlexLine or any time after.

Plus, you'll have the flexibility to access your TD Home Equity FlexLine in a number of different ways. You can use your TD Access Card**, cheques, EasyWeb Online banking, and the TD app to quickly and easily use the credit available to you.

Ready to learn more? You can book an appointment with a TD Mortgage Specialist, who will cover what you need to know.

*Subject to the terms of your agreement.
**Fees may apply.

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