Are you thinking of buying a home or refinancing your mortgage? If so, it’s important to understand all the options available to you. And while you’re likely familiar with traditional fixed-rate and variable-rate mortgages, don’t overlook the less familiar home borrowing options, such as readvanceable mortgages.

A readvanceable mortgage might be an unfamiliar type of home lending, but if you’re wondering how to borrow money from home equity, pay less to borrow, and potentially become debt-free sooner, now’s the time to learn how a readvanceable mortgage could help reduce your mortgage stress and borrowing costs.

A readvanceable mortgage offers great financial flexibility. For example, with Manulife One, Manulife Bank’s readvanceable mortgage, homeowners can easily increase or decrease mortgage payments.

With a bigger limit, you won’t need to request limit increases when unexpected events arise. So if you're hoping to renovate or update your home without going into debt down the road, a readvanceable mortgage means you won’t need to worry about a credit approval if your income changes in the future.

Readvanceable mortgages, like Manulife One, helped many people during the recent COVID crisis. If the homeowner had built up extra equity in their home with their readvanceable mortgage, they didn’t need to apply for mortgage deferrals.

With a technique called the Smith Maneuver, you can use the credit line portion of your readvanceable mortgage for anything you want, including starting your own investment portfolio.

Make investment contributions directly from your credit line with each monthly credit line increase. Since Canadians can write off the interest paid on investment loans at tax time, you’ll enjoy a tax refund that can then get applied to your mortgage portion to help you pay off your mortgage even faster.

As this impacts your taxes, we highly recommend speaking with your advisor before investing with borrowed money.

Readvanceable mortgages such as Manulife One combine bank accounts, borrowing, short-term savings, and mortgages. Yet some people might prefer to keep these accounts separate for budgeting issues, or to keep savings or debt repayment separated between spouses.

Although readvanceable mortgages share some similarities with HELOCs, they’re different - but that doesn’t necessarily mean they are more complicated. For example, while Manulife One, our readvanceable mortgage, is a unique product, it is simpler than you might think.

Manulife One is what is known as an “all-in-one” mortgage - it is not a HELOC. A HELOC refers to the home equity line only, while an all-in-one mortgage is the overall mortgage that includes a credit line component.

If you’re not sure about getting a readvanceable mortgage, you might want to consider a HELOC, however keep in mind that not all HELOCs are the same. For example, some HELOCs include a feature that allows you to use the account as your everyday bank account by depositing your income to the account and making withdrawals as needed.

Talk to your advisor about your situation to see if a readvanceable mortgage or a HELOC is the right solution for you.

There are many different ways to use an all-in-one mortgage, depending on your mortgage setup, financial goals and situation.

With Manulife One, for example, you can combine your mortgage, bank accounts, short-term savings, and other debt. It is all in one account. This lets you consolidate a good portion of your finances, simplifying your record-keeping and cash flow.

Since your borrowing is secured against your home your debt is at a lower rate than typical credit card or car loan rates. And with daily interest calculations, deposits, like your pay cheques, get applied to your account and help you save interest and lower your borrowing costs immediately.

While traditional mortgages often make sense for many homeowners, they don’t always offer the flexibility you might need in the future. And in uncertain times, it’s important to have peace of mind when it comes to protecting your financial situation. Now could be the time to consider applying for a readvanceable mortgage so you could gain access to the equity in your home easily should the need arise.

Qualifying for a readvanceable mortgage requires the same documentation and process as getting a traditional mortgage:

• Income and debt verification
• Complete list of your assets and liabilities
• A credit application and credit check
• Home appraisal

It’s also important to note that readvanceable mortgages usually require strong credit scores.