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ING DIRECT Canada Home Equity Line of Credit (HELOC)

What is a home equity line of credit?

A home equity line of credit, or HELOC for short, is a loan that leverages the equity in your home. The HELOC functions like a revolving line of credit where you can choose when and how much money to withdraw – so long as it does not exceed 65% of the value of your home.

What is the ING DIRECT Home Equity Line of Credit interest rate?

The interest rate for the ING DIRECT Home Equity Line of Credit is 3.65%, or ING Prime + 0.65%. Interest is accrued daily on any outstanding balance and is charged on the 21st of each month.

The Details

Once you qualify for the ING DIRECT Home Equity Line of Credit, you can borrow anywhere from $15,000 up to 65% of the value of your home. It’s important to note that your total home debt (mortgage + HELOC) cannot exceed 80% of the value of your home.

Features:

  • If you have a THRiVE Chequing Account, you can move money between that and your HELOC either online or on a mobile device, for quick access to your funds.
  • Once the funds are transferred to your THRiVe account, you can access the money online, write cheques, issue drafts and more.
  • Your interest is calculated on the daily balance, so you will only pay interest on the amount you use.
  • You can make lump sum payments, set up reoccurring payments, withdraw funds, and make changes to your ING DIRECT Home Equity Line of Credit online 24/7.
  • With ING DIRECT’s Fixed Payback Plan, you can setup regular fixed payments to help pay off your HELOC faster.
  • You can also decrease your limit online, which helps you avoid borrowing more than you really need.

Sample Calculation

The value of your home = $400,000
Your outstanding mortgage balance = $250,000

The maximum available credit is calculated using an 80% loan-to-value ratio:

$400,000 x 80% = $320,000

However, you must also subtract your outstanding mortgage balance:

$320,000 – $250,000 = $70,000

Now, you still need to make sure that $70,000 doesn’t exceed 65% of your home’s value. To be sure, simply divide the HELOC amount by the value of your home:

$70,000 / $400,000 = 18%

In this example, you could access $70,000 through a HELOC, which only amounts to 18% of your home’s value.

The Final Word

The ING DIRECT Home Equity Line of Credit is a mortgage product that can help you access funds to finance a renovation project, invest in something or pay off any high interest debts. To find out if a HELOC mortgage is a suitable form of financing for you, speak to an experienced mortgage broker today. Remember, a home equity line of credit is still debt that needs to be handled with discipline, including a plan to repay the debt entirely.