A readvanceable mortgage has two segments:
- A regular mortgage
- A line of credit
As you pay down the mortgage portion, the lender increases the available credit in your line of credit by the same amount. That lets you “readvance” (re-borrow) the funds later, if needed.
Suppose, for example, that you paid off $1,000 of principal on your mortgage. With a readvanceable mortgage, the lender would let you borrow that $1,000 from your attached line of credit.
Examples of readvanceable mortgages include:
- National Bank’s All-in-One
- Manulife’s One
- Scotiabank’s STEP
- RBC’s Homeline
- BMO’s ReadiLine
- TD’s HELOC
- CIBC’s Home Power Plan
- And various credit union products
The most convenient readvanceable mortgages are those that automatically readvance credit, as opposed to some which make you re-apply each time you want an advance.