Mortgage Blog

Have You Heard the Secret HELOC Policy?

April 27, 2019 | Posted by: Brandi Pierik and Matthew Pierik - Red Deer and Calgary Mortgage Brokers

Have You Heard About the Secret New Policy from Select Lenders?

With access to a full spectrum of lenders – including big banks, credit unions, monolines and private funders – I have the largest mortgage selection available to any borrower!

This added choice available only through mortgages brokers has always been a huge benefit, but never so important as it is in today’s mortgage market.

In addition to stress testing that has become the new norm for mortgage qualification, some lenders are secretly throwing added policies into the mix.

Case in point is the latest round of changes being implemented by select lenders: If you have a home equity line of credit (HELOC) and you’re looking to get a mortgage, some lenders are introducing new rules that will make it tougher to qualify for a new mortgage.

TD Canada Trust is the latest bank to put this qualification policy in place, joining a small number of other lenders, including Royal Bank of Canada, in applying this new rule.

What does this new policy mean when applying for a mortgage?

If you currently have a HELOC you’d like to keep with one of the lenders who are putting this new policy into practice and you’re applying for a separate new mortgage with them, these lenders will require you to prove you can afford a ‘theoretical monthly payment’ based on the limit – not just the outstanding balance – of that HELOC.

This is yet another stress test that could make mortgage qualification more difficult. Thankfully, I have access to multiple lenders – not only big banks – and these rules don’t apply across the board.

Have questions about your HELOC and/or mortgage options? Answers are just a call or email away!

Brandi Pierik
Mortgage Broker
DLC A Better Way
403-588-8657

Back to Main Blog Page