Current HELOC Rates in Ontario

Not all properties are viewed equally by lenders. Urban, single-family homes in major markets like the GTA are generally considered lower-risk because they are highly marketable and easy to sell. Unique or rural properties, on the other hand, are seen as higher risk due to a smaller buyer pool. This can be a particular challenge with B-lenders, who often prefer to lend in more populated areas. For homeowners with unique or rural properties, securing a HELOC may require a different product or lender, which is where a mortgage broker's expertise is crucial. A broker can help you find a lender who specializes in your specific property type and location.

Lenders need to be confident in your ability to make your monthly payments. For salaried employees, this is a straightforward process of providing pay stubs and T4s. However, for a growing number of self-employed individuals, proving income can be a challenge due to tax write-offs. While A-lenders often decline these applications, B-lenders and private lenders offer a "common sense" approach. They are more flexible and will often accept non-traditional income documents like bank statements, invoices, and contracts in lieu of tax filings to qualify you for a loan.

While a HELOC is secured by your property, your credit history still matters. Your credit score and report demonstrate your past ability to manage debt. A higher score can secure you a better rate. However, unlike traditional banks, B-lenders and private lenders are more flexible. Traditional banks generally require a credit score of 650+, while B-lenders will often consider scores over 550. Private lenders, on the other hand, have no credit score requirements. They specialize in helping borrowers with bruised credit by consolidating debt, which helps them rebuild their credit score and eventually qualify for a lower-rate mortgage with a traditional lender.