What is TD Home Equity FlexLine?
A TD Home Equity FlexLine can have two components
The revolving portion
The revolving portion is a line of credit. It uses a variable interest rate based on TD Prime Rate.
It can be paid as quickly as you like. A minimum monthly interest-only payment is required.
The term portion
The optional term portion is similar to a traditional mortgage loan with regular payments and a variety of terms, interest rates and prepayment options.
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The TD Home Equity FlexLine is a home equity line of credit, or HELOC. That means, you can use it to unlock the value of your home to get a line of credit.
Put more simply, it's a type of loan that uses your home as collateral. Let's say you're buying a home.
If you have 20% or more of your home's value², like for a down payment, you have the option to buy a home with either a traditional mortgage or a TD Home Equity FlexLine.
With a TD Home Equity FlexLine, as you pay down your principal, you can access credit, up to your credit limit (65% the value of your home).
For homeowners, a TD Home Equity FlexLine allows you to borrow against your home equity which often means a lower interest rate compared to unsecured credit, making it a cost-effective option.
The TD Home Equity FlexLine with optional term portions combines the flexibility of a line of credit with the structure of a mortgage. It can give you ongoing access to funds in a line of credit on one side, and predictable payments on the other.
You can then use the available credit towards upcoming expenses, such as a renovation project or education.
Combine the flexibility of a line of credit with the structure of a mortgage.
That sounds great, but how does it really work?
If you have 20% or more of your home's value2, like for a downpayment, you have the option to buy a home with either a traditional mortgage or a TD Home Equity FlexLine
You can borrow up to 80% of the value of your home3. This is the plan limit.
You can have a line of credit up to 65% of the value of your home. This is the credit limit.
A TD Home Equity FlexLine can be comprised of a revolving portion and optional term portions
Your revolving portion is your line of credit. Basically, you can use your house as collateral to get credit—up to 65% of the value of your house, or your credit limit
Anything you borrow above that 65% credit limit must go into a term portion
Term portions function similarly to traditional mortgages (you can have a fixed or variable rates, open or closed term, etc.)
Traditional mortgage
What is it?
A loan to help you buy your home. You then pay off the loan (with interest) steadily over a set period of time (your amortization), often 25 or 30 years.
You make regular scheduled payments, often monthly or bi-weekly. Part of each payment goes towards your principal, and part of it goes toward interest accrued.
No, you'd need to refinance your home or apply for a line of credit.
A credit line you can access and use once you've built up equity in your home (by paying down part of your principal).
It can be a good option if you're looking for flexibility when it comes to big expenses in the near, or distant, future.
Revolving portion: Often flexible; you can pay interest-only minimum payments (depends on your agreement)
There's no need to apply for credit if it's available. And your revolving portion is reusable. You can repay it (plus applicable interest) and borrow again.
How do payments work?
Can you borrow money again?
TD Home Equity FlexLine (HELOC)