We’ve been waiting for this announcement for a long time. Laurentian Bank of Canada’s (LBC’s) Homeowner Kit is now available everywhere LBC lends.

Prior to last week, it could be had only in Quebec (since 2006) and Ontario (since 2008).  Now borrowers in BC, Alberta, Nova Scotia and other provinces are eligible too.

The Homeowner Kit is a low-cost hybrid mortgage and line of credit all in one. It includes:

• One to three mortgage terms (these can be 1- to 10-year fixed terms, or 3- or 5-year variable-rate terms)
• One to three separate lines of credit (LOCs)

The LOCs are manually readvanceable. That means you can call LBC up to four times a year to increase your available credit after you make principal payments on your mortgage portion(s). 

LBC plans to make the Homeowner Kit automatically readvanceable in the future—which would then make it suitable for things like the Smith Manoeuvre.

More details:

• Maximum LTV:  80% (65% if stated income)
• Property Type:  Owner-occupied principal residences
• Minimum Beacon: 650
• Maximum Loan:  $750,000 ($350,000 if stated income)
• Maximum Debt Ratios: 30% GDS / 38% TDS 
• Qualified Using:  The prescribed rate and a 25-year amortization 
• Maximum Amortization: 35 years on mortgage portions
• LOC Payments: Interest-only, fixed sum or percentage of balance
• Mortgage Prepayments (Lum-Sum): 15% annually
• Mortgage Payment Increase: 15% annually + double-up
• LOC Prepayments: 100% any time (i.e., it’s fully open)
• Online Access:  Yes
• LOC Debit Card: Yes

The Homeowners Kit’s main advantages are:

• Rate (LBC’s mortgage rates are among the best around)
• Hybrid ability (for people who need interest rate diversification)
• Multiple lines of credit (for tracking interest separately on different types of borrowing)
• Fixed payments on variable-rate terms (helpful for budgeting purposes because LBC’s variable-rate payment will not change if prime rate rises)

LBC’s Homeowner Kit is one of the most competitive hybrid mortgages there is. Once it gets an automatically readvanceable LOC, it’ll also be one of the top readvanceable mortgages.

Last modified: April 26, 2014