Are You Still Carrying Credit Card Debt? Let’s Fix That with a HELOC
If you’re a homeowner and still carrying credit card debt, you’re playing a losing game. Credit card interest rates in Canada hover between 19.99% and 29.99%—yes, you read that right. That’s up to 30 cents in interest for every dollar you owe, every single month.
Meanwhile, homeowners with available equity can often access a Home Equity Line of Credit (HELOC) at rates between 7% and 9%. That’s a potential interest savings of over 65%. In today’s economy, that difference is massive.
Let’s break down what this means, how it works, and what to watch out for.
💳 Credit Card Debt Is Crushing Canadians
According to Equifax Canada’s [Q1 2025 Market Pulse report] https://www.consumer.equifax.ca/about-equifax/press-releases/-/blogs/consumer-debt-rising-equifax-q1-2025, credit card balances reached a record high of $113 billion. The average Canadian carries over $4,000 in credit card debt—with interest piling up month after month.
A HELOC, on the other hand, is secured by the equity in your home, which allows for far lower interest rates and interest-only payments.
🏡 HELOC: Your Secret Weapon Against High-Interest Debt A HELOC functions like a giant credit card with lower rates. It gives you flexibility and control:
- Access money as needed (up to a pre-approved limit)
- Only pay interest on what you use
- Interest is often tax-deductible if used for investment purposes (check with your accountant)
Most banks and lenders require at least 20% equity in your home and a solid credit profile.
📉 Real-World Example:
- Credit Card Debt: $30,000 @ 29.99% = $750/month interest alone
- HELOC: $30,000 @ 7.25% = $181/month interest
That’s a $569/month savings—just by moving the debt.
🧠 HELOC Strategy Tips:
- Don’t use a HELOC to buy more “stuff” — use it to consolidate and clear.
- Set up automatic payments so you don’t just tread water.
- Work with a broker (hi, that’s me 👋) to avoid pitfalls like variable rates or bank penalties.
⚠️ What to Watch Out For:
HELOCs are powerful but require discipline. You can rack up debt again if spending habits don’t change. And if rates rise, so does your payment.
📣 Final Word:
If you’ve got home equity, you’ve got cheaper money. Let’s put it to work the smart way.
Want to know if this works for you? Reach out and I’ll review your numbers privately and quickly.
Stuart Lessels
Your "Go To" Mortgage Broker for Georgian Bay and Beyond
(705) 445-1234
Sources:
- [Equifax Q1 2025 Market Pulse] (https://www.consumer.equifax.ca/about-equifax/press-releases/-/blogs/consumer-debt-rising-equifax-q1-2025)
- [Government of Canada on HELOCs](https://www.canada.ca/en/financial-consumer-agency/services/mortgages/home-equity-lines-credit.html)