Can I buy a second home using the equity of my first home?
You may be able to use options to tap into your home equity – like a reverse mortgage or a home equity line of credit (HELOC) – to help fund the purchase of a second property.
However, consider that these options are loans and add to your debt levels, and may increase your monthly expenses. Debt can also affect your borrowing options as lenders look at your overall financial situation (including any outstanding loans) to determine how much you can borrow.
Consider these six questions to ask before you borrow. We are not able to provide advice about which option may be right for you. You can also visit GetSmarterAboutRealEstate.ca to learn more about real estate investments and the risks associated with them. Speak to a financial advisor to learn about the options that are available to you, and how they fit into your personal financial situation and future financial goals.