Canada Home Equity Lending Market Trends

Several factors influence the Canadian market for home equity loans. These factors encompass the rise in home prices, the prevailing inclination toward home enhancements and advancements, the tax benefits associated with interest deductions, and the comparatively lower interest rates compared to alternative borrowing options. It is essential to consider the availability of a significant lump sum of money and the option to make consistent monthly payments.

Housing Prices in Canada are expected to keep rising in the current year. The average price for a home in Canada increased by around 17% year-over-year in the fourth quarter of the previous year, reaching USD 779,000. In most housing markets, prices increased by more than 3%. Most of the rise in house prices was seen across Ontario, primarily in the Greater Toronto Area and most significant cities in British Columbia. This increase is majorly driven by detached, single-family homes whose average price grew by nearly 21% compared to the end of the previous year. Meanwhile, due to the rise in real estate, Canadian home equity line of credit (HELOC) payments surged in Q3 last year, up by 0.7% from the previous quarter.