Readvanceable Mortgage
A combined mortgage + HELOC product under one collateral charge, where principal paydown on the mortgage automatically increases the HELOC limit.
A readvanceable mortgage (also called a combined loan plan or CLP) bundles a traditional amortizing mortgage with a HELOC under a single collateral charge on your property. As you pay down the mortgage principal, your HELOC limit automatically increases by an equivalent amount, up to the 80% combined LTV cap. Brand names include RBC Homeline, TD FlexLine, Scotia STEP, CIBC Home Power Plan, and BMO ReadiLine. Readvanceable mortgages enable strategies like the Smith Manoeuvre and make it easy to access equity without re-applying for a new facility. The tradeoff is the collateral charge, which can make switching lenders at renewal more expensive.
Related Terms
A revolving credit line secured against your home's equity, priced as Prime plus a spread — typically 0.50% to 1.00% above Prime.
A Canadian tax strategy that makes mortgage interest tax-deductible by systematically converting non-deductible mortgage debt into deductible investment loan debt via a readvanceable mortgage.
A mortgage registration type that allows the lender to secure multiple loans against your property — more flexible for refinancing but harder to switch lenders.