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Equity Take-Out | Canadian Mortgages
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Equity Take Out is when you decide to "take money out" of your property to use for other purposes. You may have a mortgage already, in which case you will be increasing the principle value of your mortgage. Or you may have no mortgage at all, in which case you are borrowing against your property and creating an Equity Take Out mortgage.
Reasons for an Equity Take Out Mortgage
The reasons for taking money out a property are often as varied as the number of people that take the money out. Some are for investment purposes, others are need-based. Some of the more common reasons include:
- Investment in other real estate properties
- Investment in the stock market or other equities
- Purchasing a recreational property such as a cottage and borrowing the downpayment from the primary residence
- Returning to school and there is a need to cover tuition fees
- Investment in a small business or franchise
- Borrowing to make a substantial payment towards an RRSP or RESP and using a lower-rate product sometimes available for mortgages versus other traditional loans
- etc.
For some more information about refinancing and equity take outs in Canada, click here to access the Refinancing Section in Mortgages 101.
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