• FAQ

  • Do I need a home equity loan or a home equity line of credit?

    Both products use your home as collateral. The main differences between the products are:

    • The line of credit is accessible for a long–term draw period, usually by check or online banking. Once you pay down your balance, you then have more money available to spend again if necessary. A home equity loan disburses all funds at once when the loan term starts and you cannot access any further funds without refinancing.
    • A line of credit has a variable interest rate. A home equity loan has a fixed rate.
    • A home equity loan has payments that don't change. A home equity line of credit has a payment that can change every month, either because the balance changes (increases if you spend more; decreases if you pay down what you owe) or because the interest rate changes because of the Prime rate changing.

    Do I need a fixed rate or an adjustable rate?

    Fixed-rate loans have interest rates that don't change during the life of the loan. Adjustable-rate loans have rates that are linked to an index, Prime, and therefore can change over time. Consider factors that could affect your decision, such as how a higher monthly payment would impact your budget if the rate were to increase and the length of time you plan to stay in your home.

    Do I want an interest-only loan?

    Interest-Only loans allow you flexibility on monthly payments when your cash flow does not permit a fully amortizing loan payment. The minimum loan payment covers the interest portion of the loan only, so your principal only decreases if you pay above and beyond the interest. You have the flexibility to decide how much principal you pay each month, so you can pay little or none if times are tight, or a lot if you have extra that month.

    Can I finance my rental property?

    Yes, you can. The interest rate may be higher. This is because there's more risk for the bank when lending on a property that's not the customer's primary residence.

    Why should I refinance?

    There a numerous reasons customers refinance the loans they already have. Some of these are:

    • To lower the monthly payment
    • To lower the interest rate
    • To switch from an adjustable rate to a fixed rate or vice-versa
    • To refinance for a higher amount in order to pay off other debts or get cash
    • To change the remaining term of the loan

    Whatever your needs, we can help you decide what makes the most sense for you.