Quote:
Originally Posted by squiggs96
I have an NBC All In One account, which basically acts as a HELOC. I took possession in November 2008, so I was able to only put down 25% (now most require 35%) and my interest rate is prime. These are great if you are fiscally responsible and can understand that for a long time you won't have any "money" in the bank. I'd rather ever cent I put into the bank drops my interest payment, rather than having an amount in chequing, savings and a mortgage payment. It worked really well for me in the first five years I had it, as my job paid a low salary, but high bonuses. My compensation was about 60% salary and 40% bonuses, so it was nice that every few months when I got my bonuses, they immediately went against my principal.
That said, I'm looking at selling my townhome and buying a house worth about 3 times the value of my current place. I will likely go with a mortgage as the rates are much cheaper than the HELOCs, and maybe after the first 3-5 year term, I'll go back to the current type of account. It will depend on rates, as the HELOCs are all at prime + 0.5% right now.
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I have a NBC all-in-one and it is a great product, stick with it. Within the all in one, you can split the debt into a traditional mortgage and a line of credit, up to 80%. You should be able to get 5 year fixed at <3%, variable in the 2% range, and leave what you think you will pay off in the next year or two in the line of credit.
Ex: 200k down payment on a 800k house.
Credit limit = 640k
Put 200k at 3% 5 year fixed traditional (so you can sleep at night)
200k at 2.25% 5 year variable.
200k at 3.5% line of credit.
Having your paycheques immediately reduce the loc balance, will reduce your overall interest costs, and you have the built in rainy day fund.
http://www.nbc.ca/bnc/cda/feeds5/0,2...-16579,00.html