Amid heightened interest rates, some Canadians might continue to rely on home equity lines of credit (HELOCs) and one credit counsellor said it can be a good borrowing tool if used correctly.
Sandra Fry, a credit counsellor at Credit Counselling Society, said in an interview with BNN Bloomberg Tuesday that it can be a “great idea” to use a HELOC to consolidate higher-interest debt. A HELOC is a form of credit, that allows home owners to borrow money and use their property as a guarantee that they’ll pay it back.
But when using a HELOC, Fry said Canadians should make sure they don’t “hold the debt in the line of credit and not pay it down.”
“That's one of the traps with a home equity line of credit, is that you can pay interest only and end up at the end of 25 years, [but] you still owe that exact same amount,” Fry said.
Check out the full video at the top of the article to learn more.
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