Home Equity Line of Credit Explained

Buying a home is likely one of the largest purchases, and most lucrative investments you will ever make. However, with this purchase comes the buying power of the equity in that home. The more of your home you have paid off, the more of its equity is available to you. That value can then be used as security for a loan or line of credit. If you have a home equity loan, payments must be made with interest, on the entire amount of the loan.

A home equity line of credit compared to a home equity loan

While both products let you use your equity to your advantage, a home equity loan gives you a one-time lump sum of money. While a home equity line of credit provides convenient ongoing access to funds for current or future needs.

This means that once you're approved for a line of credit, you can use the funds as you need them and repay the line of credit with interest only on the funds you use. You can also access your line of credit with your debit card, through bank machines, with cheques, CIBC Telephone Banking, Mobile Banking and CIBC Online Banking.

Eligibility for home equity credit lines

If you have more than 35 percent equity in your home, you may be eligible to apply for a Home Power Plan®. By using your home as collateral, you may qualify for a lower interest rate and a larger credit limit.

When to consider a home equity line of credit

You can use your home equity line of credit to make a variety of purchases. Here are just a few of the most common reasons to apply for a home equity line of credit:

  • Home renovations
  • Vehicle purchase
  • Elective medical expenses
  • Education expenses, including tuition and housing
  • Home renovations
  • Investment opportunities
  • Debt consolidation
  • Other major purchases
  • Residential property

Interested in applying for a CIBC home equity credit line?

You can apply online in just minutes. To speak with a CIBC representative, call 1-866-525-8622.

Get started