This piece was originally published on December 4, 2017, and was updated on December 29, 2022.

Q. What is a home equity of line of credit?

A home equity line of credit (HELOC) is a loan that leverages the equity in your home. The HELOC functions like a revolving line of credit where you can choose when and how much money to withdraw, so long as the amount doesn’t exceed more than 65% of the value of your home. BMO’s HELOC product is called the Homeowner ReadiLine.

Q. What is the BMO Homeowner ReadiLine interest rate?

There are a number of interest rates available. Unlike most of the other HELOCs on the market, the interest is calculated monthly, not daily. These are the rates as of Dec. 29, 2022:

Q. What are the details of the plan?

Once you qualify for the BMO Homeowner ReadiLine, you can borrow anywhere from \$0 up to 65% of the value of your home. It’s important to note, however, that your total home debt (mortgage + HELOC) can’t exceed 80% of the value of your home.

Q. What features does the BMO Homeowner ReadiLine have?

These are the features of the product:

• You can access the funds at an ATM, online, by phone or by cheque or at any BMO branch location;
• You can access funds up to your revolving credit limit as long as you own your home;
• You can get a variable rate lower than any personal line of credit;
• Your interest is calculated on the monthly balance, so you will only pay interest on the amount you use;
• The repayment frequency is flexible—you can pay as little as the monthly interest charge or as much as you want to try and pay it down; and
• There are no pre-payment penalties—you can pay off the full amount owing whenever you want without being charged extra fees.

Q. How much can I borrow?

Let’s do a sample calculation:

The value of your home = \$450,000
Your outstanding mortgage balance = \$250,000

The maximum allowable total home debt would be calculated as:

\$450,000 x 80% loan-to-value ratio = \$360,000

Then, you must subtract the outstanding balance on your mortgage to get the total allowable line of credit amount:

\$360,000 – \$250,000 = \$110,000

Now, you still need to make sure that \$110,000 doesn’t exceed 65% of your home’s value. To be sure, simply divide the HELOC amount by the value of your home:

\$110,000 / \$450,000 = 24%

In this example, you can access \$110,000 through a HELOC, which equals 24% of your home’s value.

The bottom line

The BMO Homeowner ReadiLine is a mortgage product that can help you access the money you need to make an investment, buy a second car, or even purchase a second property. A HELOC can also be used to pay off any high-interest debts you may have, including a car loan or any credit card debt. Before deciding to leverage your home, you should speak with a mortgage broker and come up with an option that will work best with your financial situation.