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How to leverage your home equity

Building and learning how to leverage your home equity is one of the biggest advantages of owning a home, especially when the housing market works in your favour. 

Home equity is the difference between your outstanding mortgage and the appraised value of your property. Home equity is a powerful asset that many Canadians can leverage to achieve their financial goals.

Seven ways to leverage the equity in your home 

Chances are your home has increased in value since you purchased it. And if your home’s current fair market value is greater than your mortgage balance, you have positive equity that you can use for various purposes. 

Leveraging home equity means borrowing funds on the current value of your home without selling your property. That also means you have greater flexibility in withdrawing the funds. Here are three options:

Cash-out refinancing– this procedure involves borrowing more money to cover the difference in cash from your existing home. In other words, you want to increase your current mortgage debt for more cash. While this can be a straightforward way to use the equity from your home, a cash-out refinance can also mean a higher monthly mortgage payment. 

Home equity line of credit (HELOC)- A HELOC works like a credit card. You have a credit limit based on how much equity you have, which lets you withdraw multiple loan amounts within a draw period (usually 10-20 years). Unlike cash-out refinancing, you will have higher interest rates on the borrowed amount. However, a HELOC can be a good way to leverage the equity in your home if you want to withdraw some of that money and wish to return it quickly.

Home equity loan- This can be the best way to use the equity in your home when you are considering taking out a lump sum amount and paying a fixed interest rate. Since the amount obtained and interest is fixed, you will know precisely how much is owed monthly, and you may arrange your repayment accordingly.

Whether you want to receive your funds as a lump sum or staggered, there are various purposes that you can use them for. 

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Real Estate Investing

If you are a homeowner and interested in real estate investing, leveraging your home’s equity is a great way to fund your initial investment property. 

For example, buying a rental property worth $300,000 will require a 20% down payment of around $60,000. That down payment can come from a home equity loan from your existing home. With proper planning, the rental property may generate enough rental income to cover your new and existing mortgage payments. 

Once you generate enough equity with the initial investment property, you can repeat the process to purchase a second higher-value investment property, increasing your net gain as the property appreciates.

Home renovation

Home improvements can be costly. While homeowners have many options to get their funding, a home renovation usually gets funded through a loan. 

Using home equity loans for home renovation means using your property’s current equity and investing back into it. More equity will mean a higher loan amount that you could potentially get to pay for contractors, materials, and equipment. 

Since your house is collateral, home equity loans typically have comparatively lower interest rates. 

Loan Consolidation

Consolidating high-interest debts such as credit cards and personal loans with a home equity loan can often lead to simpler payment schemes, not to mention lower interest rates. 

By consolidating your existing mortgage loan and other personal loans into one place, you only need to track one monthly payment, which can improve your credit score.

Business loan 

Business loans are used for significant expenses, including company wages, purchase inventory, and expansion. For aspiring business owners, getting a business loan from traditional banks may be more reliable but can get more challenging as banks may have more stringent requirements, such as high credit scores and significant business documentation. 

With alternative lenders, like Alpine Credits, homeowners can use their home equity to fund their business needs and expenses with fewer requirements and potentially lower interest rates. 

Education funding

Education is a life-long investment but does not need to be costly. By utilizing existing equity in the home, parents can prevent their children from getting into student debt while ensuring their quality of life. 

Retirement financing 

Retirees on a fixed or limited income may struggle to sustain their lifestyle and cover unexpected medical bills. With secured loans using the equity in their homes, pensioners can have additional funding sources to cover their financial needs if they have paid down at least 25% of their mortgage.  


When the investment opportunity arises, it is better to take quick action. It can be faster to borrow against your home equity than to liquidate your existing investments. Home equity loans can be leveraged to invest in different assets. 


Whether you’re looking to invest in real estate, renovate your home, consolidate debt, or seize investment opportunities, understanding how to leverage your home equity can be key to achieving your financial goals. 

With Alpine Credits, you can unlock your home equity and find a solution to your needs. Unlike traditional financial institutions, your credit score, income statement, and employment status are not the main decision drivers in getting approval for a loan. You are eligible for a home equity loan if you have at least 25% home equity in your property.

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Frequently asked questions

In Canada, you can use cash-out refinance, a Home Equity Line of Credit (HELOC), or a home equity loan to leverage equity in your home. You can then use the funds for various purposes like buying, investing in real estate, renovating your home, consolidating debt, or paying for further education.

As a homeowner, you can qualify for a home equity loan by paying down at least 25% of your property’s mortgage. 

Once you generate enough equity with your primary property, you can use that equity to finance the down payment for another purchase of a rental home or unit. With proper planning, the rental property may generate enough rental income to cover your new and existing mortgage payments.

It means borrowing funds against your home’s equity without having to sell your property.