I assume people will still be able to renew their mortgage to take out any equity up to 80% as in the past. That is effectively the same as a HELOC but with more paperwork and time involved.
I wonder if going forward the banks will introduce a new "readvancable" mortgage that allows you to continually alter the principal amount of your mortgage to take out or repay cash. It will be just like a HELOC but have a different name and likely cost more to setup.
Photon has a good point as well in that the people on the margins that the rules are supposedly trying to help will likely turn to credit card debt and start paying 19% interest instead of 4%.
|