Making the Most of Your Home Equity

Posted On Mar 27, 2025

If you are a homeowner (or plan to be one someday soon!), you probably already know the value of a good home investment and have heard the phrase “home equity” before. But what is home equity exactly? 

Home equity refers to the percentage of your home that you own outright. Any homeowner that currently has a mortgage is considered the owner of their home, however the lender has a stake in the property as well. Over time, as you pay down your mortgage, the lender interest decreases and the value of your home that you own outright, increases. Thereby, improving your home equity. 

The question is, once you have built up some home equity, what do you do with it? There are lots of different ways that you can tap into the equity of your home and start making the most of your investment. Let’s take a look at some of the options: 

REFINANCING 

This is a great way to take advantage of the equity in your home for the purposes of home upgrades or renovations. This method can also be used to help consolidate debt from credit cards, lines of credit or other areas into your mortgage for a single, cohesive loan. While this means taking on more debt in one place, it reduces the interest you are paying as you would only pay interest on the single loan versus paying it on each individual loan. You can also refinance in order to access UP TO 80% of your home’s equity in useable cash for a vacation, child’s education, healthcare or other depending on your needs. 

If you choose to refinance, it’s important to note that there may be penalties for paying out your existing mortgage loan prior to renewal, but these penalties will be offset by a lower interest rate and, at the same time, you can access extra money to put towards your cottage renovations. 

HELOC 

Another option to access the equity in your home is to consider a HELOC (Home Equity Line of Credit). Taking out a HELOC allows you to access your equity like any other loan but with a distinct difference – it comes with two phases. During the draw period, your home equity line of credit will behave similar to a credit card and you can draw on the equity in your home whenever you see fit. During this time, you’ll likely only have to make payments on the interest accrued by your purchases. After a specified amount of time, you’ll enter the repayment period. During this period, you’ll be required to start making payments on both the principal and interest of what you’ve borrowed. 

While tapping the equity in your home can be a good idea, be advised should do so with caution and understand any of the possible consequences. The best thing you can do is consult a licensed mortgage professional and financial planner to discuss opportunities to make your home’s equity work for you! Contact me today to get started.