CMHC Rule Changes – Home Equity Line of Credit

Theresa’s Soap Box – CMHC Rule Changes – Home Equity Line of Credit

Today we’re here to talk about home equity lines of credit and the new CMHC changes announced earlier this week.

A home equity credit is a credit line, think of something similar to your credit card, but secured to your property.  What this means is that you can borrow a very large sum of money because your property itself is worth hundreds and thousands of dollars.  You could borrow this money at a very cheap rate similar to mortgage rates.  Compared to your credit card, which might be 20% or even higher, this seems like a fantastic deal.

Now the problem is that the growth of home equity lines of credits has nearly doubled the growth of consumer debt.  The government obviously sees this as an area of concern.  We know that many of you may be using your home equity lines of credit in a perfectly reasonable way; maybe you’re renovating, of just keeping it as an emergency fund, however the concern is still there that there might be people using it as easy access / free cash that they can spend (this is something that the government does not want).

By withdrawing insurance for home equity lines of credit, essentially it limits the amount of money you can draw from line of credit compared to your property value.  So you may have previously been able to take out and borrow past 90% of your property value now you won’t be able to go past 80%. So it’s a good thing, most of you might not need that much in funds, however for those of you who might be already mortgaged pretty significantly it will limit the amount of extra funds you may take out of your property.

If you have any questions of concerns about these recent mortgage rule changes please feel free to contact one of our mortgage coordinators at or 1-866-521-9557

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