A monster that once lurked among households without causing much consternation likely now has tens of thousands of Canadian homeowners losing sleep at night.
HELOCs — or home equity lines of credit — have been around for more than a decade allowing homeowners to borrow up to 80 per cent of the value of their home’s equity at low interest rates.
They’ve served as an important source of additional wealth, particularly while interest rates remained at historical lows for the better part of 15 years — until recent months that is.
Gentry Mullen / The Kansas City Star
Now with inflation raging, the Bank of Canada has hiked its overnight rate 225 basis points since March to 2.5 per cent, with more increases potentially coming by year’s end.
These are meaningful for HELOC debt-holders because HELOC interest rates are based off the prime lending rate, which rises…
