What a readvanceable mortgage means in Canada and how it combines mortgage repayment with reusable home-equity credit.
A readvanceable mortgage is a mortgage structure that combines a mortgage with a home-equity credit component whose available limit can increase as mortgage principal is repaid.
This structure matters because it changes how home equity becomes available over time. It also affects registration, switching, discharge, and borrower discipline around re-borrowing.
FCAC says that a HELOC combined with a mortgage is sometimes called a readvanceable mortgage. As you pay down your mortgage principal, available home-equity credit may increase according to the product’s rules.
That can be useful for borrowers who want flexible access to home equity. It can also create complexity because the same property security may support both the amortizing mortgage and the revolving credit piece.
You repay a portion of your mortgage over time, and the lender increases the available limit on the linked HELOC component as principal declines. That creates new borrowing room without a fresh refinance each time.
Readvanceable does not mean free or automatic borrowing without consequences. It means the product can re-open borrowing room as equity grows.
Borrowers also sometimes assume a readvanceable mortgage is just another name for any HELOC. It is more specific than that because it describes a HELOC combined with a mortgage in one structure.
Readvanceable products vary by lender in how they are registered, how limits move, and how they affect switching or discharge. Borrowers should understand the security structure before signing.