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Versatile Line of Credit - A home equity line of credit

Your home does the financing!

  • Home equity line of credit for owner-occupants of buildings of 4 units or less
  • Minimum $25,000
  • Variable interest rate based on prime rate
  • Daily, weekly or monthly payments
  • Ideal if you want to borrow against the equity in your home at an attractive interest rate
  • Allows you to borrow up to 80% of the market value of your property
  • Easy to use and flexible
  • Lets you manage all your credit needs

How it works

  • Once documents are signed in the presence of a notary and your line of credit is established, you no longer have to apply for additional cash advances.
  • You can draw on your line of credit at any time to cover large expenses such as renovations, studies, the purchase of a vehicle, RRSP contributions or to consolidate your loans at an attractive interest rate.
  • Cash advances taken out against the line of credit can be converted at any time into term loans or separate mortgages (in amounts of $15,000 or more).

Diversify your mortgage

A mortgage is often the most important investment you'll make in your lifetime, just as important and sometimes even more so than retirement savings. And just like savings, it's also important to diversify risk1 based on your needs, tolerance for rate fluctuations and financial capacity. The Versatile Line of Credit also allows you, if you wish, to customize and diversify your mortgage by splitting it up into 2 or 3 smaller loans at different interest rates, terms, maturity dates and amortization periods.

To learn more, see 2 examples of how the Versatile Line of Credit can be used:

 

Interest rate

  • Variable rate lower than a personal line of credit
  • Varies based on the prime rate
    See prime rate
  • Interest is calculated on the daily balance so you only pay interest on the amount used

For current rates, contact a caisse advisor or mortgage representative.

Amount available

  • Minimum line of credit of $25,000
  • Financing for up to 80% of the value of your home

Repayment

  • Loan payment frequency is flexible: daily, weekly or monthly
  • You can choose to pay:
    • a percentage of the monthly balance
    • a fixed or variable amount
    • or just the monthly interest
  • No prepayment penalties. Pay off your loan whenever you want, in part or in full, without being charged extra fees

Access to funds

  • At an ATM, online via AccèsD Internet, by phone at 1 800 CAISSES (1 800 224-7737), by cheque or at your caisse
  • Use special cheques available from your advisor to directly access your line of credit without affecting the balance of your personal chequing account

Possible uses

Other

  • Line of credit transactions appear on your monthly statement of account
  • Loan insurance - Versatile Line of Credit (life and disability) available

    Learn more about Loan Insurance - Versatile Line of Credit.

1. Mortgage diversification also available for mortgages with 80% to 95% loan-to-value ratios under certain conditions.

Overview

Choosing the Versatile Line of Credit to finance the purchase of a property gives borrowers the freedom to manage their current and future loans. Here's Mark Desjardins's financial summary.

Value of the home: $250,000

Mortgage: $191,000

Credit situation Total financing Total monthly cost
Without the Versatile Line of Credit $209,000 $1,495
With the Versatile Line of Credit $209,000 $1,334

Without the Versatile Line of Credit

Without the Versatile Line of Credit, Mark has to reapply each time he wants additional financing.

Credit product Amount Rate Term Monthly cost
Mortgage (25-year term) $191,000 Fixed at 5,20% 5 years $1,133
Personal Line of Credit $5,000 Fixed at 10,50% Over 5 years $107
Accord D financing $9,000 Fixed at 0% Over 5 years $150
Credit card2 $4,000 Fixed at 19,40% Over 1 year $105
Total financing (average rate of 5.278%): $209,000 Total monthly cost: $1,495

2. For the purpose of the example, we assume that variable rates remain stable. Amounts owed are amortized over their respective term.

With the Versatile Line of Credit

With the Desjardins Versatile Line of Credit, Mark can redistribute his credit products, diversify his mortgage3 and, since he's applying security of mortgage to his financing, he gets a much better rate. This new distribution takes into consideration his tolerance for the risk of rate fluctuation and ability to repay his debts.

Versatile Line of Credit
Financing available = 80%4 of the value of the home: $200,000

New credit product distribution Amount Rate Term Monthly payment
Mortgage (25-year term) Portion 1:
$100,000
Reduced variable at à 3.00% 5 years $474
  Portion 2:
$91,000
Variable at à 5.20% 5 years $540
Line of Credit5
(variable portion of the Versatile Line of Credit)
$9,000 Variable at à 5.00% 5 years $170
Accord D financing5 $9,000 Fixed at à 0% 5 years $150
Total financing: $209,000 Total monthly cost: $1,334

Annual savings with the Versatile Line of Credit: over $12,000 in interest over the 5 year term.

The total monthly payment is lower because the interest rates are lower.

3. Mortgage diversification also available for mortgages with 80% to 95% loan-to-value ratios under certain conditions.

4. You can obtain a line of credit of up to 65% of the value of your home, with up to 15% of the remainder as a loan with regular payments of capital and interest.

5. For the purpose of the example, we assume that variable rates remain stable. Amounts owed are amortized over their respective term.

Overview

How do you manage all your credit needs with the Versatile Line of Credit?

To better understand the advantages of this line of credit, let's look at John Cash's financial summary.

Value of the home: $250,000

Mortgage: $80,000

Credit situation Line of credit available Total financing used Average interest rate
Without Versatile Line of Credit $10,000
application required for additional credit
$119,000 6.221%
With Versatile Line of Credit $81,000
financing managed by John
$119,000 4.467%

Without the Versatile Line of Credit

Without the Versatile Line of Credit, John must apply each time he needs additional financing.

Credit products Amount Rate Term
Mortgage
(15-year term - monthly payment of $639)
$80,000 Fixed at 5.20% 5 years
Auto loan
(without security - monthly payment of $502)6
$25,000 Fixed at 7.60% 5 years
Personal Line of Credit
(monthly payment of $215)6
$10,000 Variable at 10.50% 5 years
Credit card
(monthly payment of $104)6
$4,000 Variable at 19.40% 5 years
Total financing: $119,000 Average rate of 6.221%  

6. For the purpose of the example, we assume that variable rates remain stable. Amounts owed are amortized over their respective term.

With the Versatile Line of Credit

With the Desjardins Versatile Line of Credit, John can redistribute his credit products, diversify his mortgage and get much better rates since he took out security of mortgage with his financing.

Versatile Line of Credit
(financing available = 80%7 of the value of the home): $200,000

New credit product distribution Amount Rate Term
Mortgage
(15-year term - monthly payment of $276)
Portion 1:
$40,000
Reduced variable at 3.00% 5 years
(monthly payment of $319) Portion 2:
$40,000
Fixed at 5.20% 5 years
Line of Credit8
(variable portion of the Versatile Line of Credit - monthly payment of $264)
$14,0009 Variable at 5.00% 5 years
Secured open auto loan
(monthly payment of $485)
$25,000 Fixed at 6.20 % 5 years
Total financing used:
Financing still available:
(total payments of $1,334)
$119,000
$81,000
 
 
 
Average rate of 4.467%
 

Annual savings with the Versatile Line of Credit: $8,000 in interest over the 5-year term.

John doesn't have to apply again for additional financing; he can use the funds available as he wishes. In addition to a competitive rate, the Versatile Line of Credit lets him manage his projects or purchases independently from one another and gives him a realistic overview of his credit situation.

The interest rates above are provided as examples only. Current rates are available in the Rates section. For additional information, please contact an advisor at your caisse. In Ontario, for loans for fixed amounts, the annual percentage rate (APR) is equal to the posted interest rate if no additional charges apply to the loan. If charges apply, the APR may be different.

7. You can obtain a line of credit of up to 65% of the value of your home, with up to 15% of the remainder as a loan with regular payments of capital and interest.

8. For the purpose of the example, we assume that variable rates remain stable. Amounts owed are amortized over their respective term.

9. Line of credit and credit card were combined in the Versatile Line of Credit to benefit from a better rate.

Did you know?
Versatile Line of Credit Insurance is tailored specifically for Versatile Line of Credit holders. Its comprehensive coverage helps you and your loved ones pay off your Versatile Line of Credit financial obligation in the event of death or disability.

The Versatile Line of Credit is eligible for the Green Homes Program, which rewards green building and renovating with a comprehensive offer that includes cashback, rebates, great rates, tips and many other advantages.

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