Canadians Using their Homes as Piggy Banks

Canadians are borrowing against their houses at the fastest pace in more than five years, as Home Equity Lines of Credit (HELOCs) emerge as a preferred means of accessing funds.
Borrowers can tap HELOCs for up to 65% of the value of their homes, and the funds are most commonly used for renos, investing and consolidating debt. “Houses are becoming piggy banks,” said Paul Gulberg, a Bloomberg Intelligence analyst. It’s “either greed based or need based.”
HELOCs can also be a red flag for policy makers. About 40% of HELOC borrowers don’t regularly pay down the principal.

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