PILLAR 01 · WEALTH FOUNDATIONS Evergreen Education EP 087

How to Turn Home Equity Into a Down Payment Using a Readvanceable Mortgage | Money Strategy 1/6

A solo episode with Dalia Barsoum, Principal Broker, Streetwise Mortgages

LISTEN ON ▶ YouTube

6 min · December 30, 2025 · 130 views

WHAT YOU'LL LEARN

How to calculate accessible equity using the 80% rule on your primary residence in Canada
Why a HELOC works like a credit card where you only pay interest on the specific funds you withdraw
How a readvanceable mortgage automatically grows your credit limit as you pay down mortgage principal
The importance of stress-testing your HELOC payments at higher interest rates before investing
How to factor HELOC carrying costs into your rental property cash flow calculation
Which Canadian financial institutions offer HELOCs and readvanceable mortgage products

Show Notes

Timestamps 7

Questions Answered 4

Mentioned In This Episode 1

Dalia Barsoum kicks off her six-part money strategies series by tackling the number one reason aspiring investors never buy their first property: the belief that they don't have enough money. In this episode, she reveals how a Home Equity Line of Credit (HELOC) can transform your existing home equity into a powerful funding source for a down payment. Using a clear $700,000 property example, Dalia breaks down the 80% rule to show exactly how much capital you can unlock—illustrating how a home with a $500,000 mortgage can yield $60,000 in accessible equity.

She explains why a HELOC functions like a credit card, where you only pay interest on the specific amount you use rather than the total limit. Dalia then introduces the readvanceable mortgage, a dynamic product where your available credit automatically increases as you pay down your mortgage principal, without requiring requalification. She also addresses the risks, emphasizing the importance of stress-testing your payments at higher interest rates and factoring HELOC carrying costs into your investment property cash flow. The episode concludes with a look at which Canadian lenders offer these flexible products, making this a must-watch for any homeowner ready to become an investor.

00:00:00 Introduction: Money Is Not the Barrier → 00:00:47 Strategy #1: The Home Equity Line of Credit (HELOC) → 00:01:05 The 80% Rule and Equity Calculation → 00:02:02 How HELOC Interest Works → 00:02:47 Variable Rate Risks and Stress Testing → 00:04:28 The Readvanceable Mortgage → 00:05:39 Which Lenders Offer HELOCs and Readvanceable Lines →

How much equity can I access from my home to buy an investment property?

In Canada, you can access equity up to 80% of your home's appraised value. To find your available amount, calculate 80% of the property value and subtract your existing mortgage balance. For example, on a $700,000 home with a $500,000 mortgage, you could access $60,000 through a HELOC.

What is a readvanceable mortgage and how does it work?

A readvanceable mortgage is a dynamic product that combines your mortgage with a HELOC. As you make regular mortgage payments and pay down principal, your HELOC credit limit automatically increases by that same principal amount. You do not need to requalify to access the newly available equity, though each lender has its own rules for accessing the funds.

Do I pay interest on the entire HELOC limit?

No. As Dalia Barsoum explains, a HELOC functions like a credit card. You only pay interest on the specific amount of money you actually use, not on the total approved limit. For instance, if you withdraw $20,000 from a $60,000 limit, you only pay interest on the $20,000.

What are the risks of using a HELOC for a rental property down payment?

HELOCs typically carry a variable interest rate, meaning your payments will increase if rates rise. You must account for the HELOC payment in your investment property's cash flow calculation and stress-test your numbers at a higher rate to ensure the property can still carry the debt if rates go up.

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