Quote:
Originally Posted by MillerTime GFG
Yep. B20 reduced the limit on HELOC's for banks to 65% from 80%. With credit unions being provincially regulated, they didn't have to adhere to that. They can also qualify their HELOC's at their 3 year fixed rate (somewhere around 3.29% right now), amortized over 25 years, whereas banks have to use the benchmark rate of 4.79% over 25 years. There are many other niches they have as well. So they're easier to qualify for, and can be utilized up to a higher loan to value.
Banks can still do HELOCs when there is only 20% equity, but the 15% between 65 and 80 would have to be locked into a fixed or variable mortgage.
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Ya I knew that the credit unions were regulated provincially, but I guess I assumed that mortgages were federally regulated or something and didn't see the distinction. Thats crazy that there is that much of a difference in that case. I mean if the credit unions are able to guarantee 100% of deposits with no limit that's one thing, but mortgages that are different in terms of restrictions and risk seems completely different.