RenFi Capital Home Equity Loans:
A Complete Resource Guide

Attain Your Financial Goals – Explore Home Equity Loans from RenFi Capital

Although modifying or improving one’s home has become increasingly popular in recent years, it can be a rather costly endeavor for Toronto homeowners. Accordingly, homeowners who lack sufficient funds to cover the cost of their large-scale home renovation projects, such as a kitchen remodel, room expansion, or roof replacement, may need to consider alternate sources of funding. To meet this growing need, more and more Canadians are seeking the expertise of companies like RenFi Capital to finance their home improvements through home equity loans. This not only allows them to save a significant amount of money but also enhances the comfort of their homes. Homeowners can easily borrow up to 80% of their property’s equity to cover the cost of their next major renovation project or upgrade, making it a convenient option.

That said, home equity loans are a smart financial tool for any homeowner looking to acquire the necessary funding to complete large-scale home renovation projects. With a home equity loan, homeowners no longer have to fund their next home renovation project themselves, which simplifies the process and saves them the headache of managing their expectations. As part of a payment plan, borrowers will receive a single lump-sum payment by using the equity in their home as collateral to fund their renovations while improving the value of their property. The loan is then to be repaid over a predetermined time frame (often 5–15 years) at an agreed-upon interest rate.

Now after reading this far, while a home equity loan may be an appealing option to many homeowners in Toronto, at RenFi Capital, we emphasize the importance of being informed before making a decision. This way, you can assess whether a home equity loan is the best option for your home. Therefore, our experts have worked to put together this comprehensive resource guide to arm you with everything you need to know about home equity loans so that you can make a more informed decision for your situation. This complete resource guide will cover topics on the fundamentals of home equity and home equity loans: what they are, why to use them, how they work, why you, and how to apply.

At RenFi Capital, we aim to simplify the financing process for large-scale renovations while also helping you save money. To achieve this, we have created this guide to educate fellow Canadians on how they can easily complete their renovation projects and enhance the comfort and value of their homes. By the end of this comprehensive home equity financing resource, we hope homeowners will have all the necessary information about home equity loans and RenFi Capital to make an informed and sound financial decision for their situation.

Table of Contents

Home Equity: What Is It?

In order for homeowners in Toronto to fully comprehend the concept of home renovation financing, it’s essential for them to first understand what “home equity” is. Home equity represents the portion of a property’s value that the homeowner owns outright and is calculated by subtracting any outstanding debts or liens from the property’s current market value. In simpler terms, as a Toronto homeowner, your financial interest in your property, minus any liens or debts, is your home equity.

That said, it is important to note that the amount of equity in a house is not fixed and can change over time as mortgage payments are made and the property’s market value fluctuates. However, beyond paying off a mortgage loan, home equity can be a valuable asset for Toronto homeowners. For example, you can borrow against your home equity to meet essential financial needs, such as funding large-scale home renovations, paying off high-interest debt, or covering college tuition.

For homeowners in need, tapping into their home equity can be a wise financial decision. Home equity-based borrowing typically carries lower interest rates than personal loans or credit cards, since the funds are secured by the equity in your home. Additionally, if the funds are used to improve the home, the interest on the loan is usually tax-deductible, providing homeowners with added tax benefits. That said, homeowners should exercise caution and seek expert advice before making any decisions about borrowing against their home equity.

Maximize Your Investment - An Example of Home Equity

Now that you understand what home equity is, we thought it might be helpful to provide you with an example of how home equity can be used in the real world. For example, when a homeowner purchases a home for $100,000 with a 20% down payment, or $20,000 (covering the remaining $80,000 with a mortgage), they will have $20,000 in equity.

If the market value of the home remains constant over the next two years and $5,000 of mortgage payments are applied to the principal, the homeowner’s equity will increase to $25,000 at the end of the two years.

However, if the market value of the home increases by $100,000 during that same period and the $5,000 from mortgage payments is applied to the principal, the homeowner’s equity will then total $125,000.

Home Equity: Why Use It?

Homeowners who want to gain a better understanding of home equity should not only be aware of the concept but also the potential benefits it can offer. In this section of our comprehensive guide to home equity loans, we will cover the reasons why homeowners should use home equity and the financial benefits it provides.

It is important to understand that, unlike some investments, home equity cannot be instantly converted into cash. This is because the equity is determined by the property’s current market value, which may not reflect the actual selling price despite the appraisal. Nevertheless, homeowners can use their property’s equity as collateral to secure low-cost funds to meet their financial needs.

It is essential to remember that although you have the liberty to allocate the funds as you wish after tapping into your home equity, using it hastily may not always be in your best interest. Provided that your home serves as collateral, failing to repay the borrowed funds could potentially result in losing your home.

Despite this risk, leveraging your home’s equity can provide various financial benefits for homeowners in need. Below, we have outlined the various benefits for why Toronto homeowners should consider using their home equity. They are as follows:

Understanding the Benefit of Using Your Home Equity

  • In Canada, homeowners are permitted to borrow up to 80% of the value of their home through private home renovation lenders such as RenFi Capital.
  • Home equity provides a convenient and cost-effective way to borrow significant funds at attractive interest rates.
  • It is useful for funding large-scale home renovations, debt consolidation, or improving your financial situation.
  • Home equity-based borrowing typically has a lower interest rate compared to credit cards or personal loans.
  • The funds are secured by the equity in your home.
  • Interest on such borrowing is generally tax deductible if the funds are used for large-scale home improvements or energy-efficient upgrades.

Before considering using your home equity for a loan, it’s important to carefully evaluate your budget and intended use of the funds to determine the appropriate type of loan. The most common types of loans for home equity borrowing are a home equity loan or a HELOC. With this in mind, please continue reading to learn more about how homeowners can effectively leverage their home equity.

Home Equity Loan: What Is It?

Toronto homeowners looking to improve their financial situation and meet essential financial needs can take advantage of a home equity loan from a certified private lender such as RenFi Capital. That said, a home equity loan, also called an equity loan, a home equity installment loan, or a second mortgage, is a type of consumer debt that allows homeowners to borrow against the equity in their homes. The loan amount is based on the difference between the home’s current market value and the homeowner’s mortgage balance due. It’s important to note that home equity loans are typically fixed-rate, while home equity lines of credit (HELOCs) usually have variable rates.

When you obtain a home equity loan, your lender will provide you with a lump sum payment, which you will start paying back immediately at a fixed interest rate. This means that you will make a predetermined monthly payment over a set period, typically 5 to 10 years. Keep in mind that the interest rate you receive will depend on factors such as your credit score, your income, and the lender you choose. If you have a significant and pressing expense, a home equity loan is an ideal choice that offers the security of stable, predictable monthly payments.

Moreover, home equity loans are particularly useful for borrowers who have a specific amount of money in mind that they need to borrow. These loans come with lower interest rates than personal loans and credit cards since your home serves as collateral. Moreover, in Canada, homeowners can borrow up to 80% of their property’s value, making home equity loans a popular choice amongst Toronto homeowners. However, it’s important to remember that a home equity loan is a type of second mortgage secured by your ownership stake (equity) in your home. So, if you fail to repay the borrowed funds, you could potentially lose your home.

Homeowners can benefit from the value they already have in their property by opting for a home equity loan. For example, let’s say you own a condo with an appraised value of $700,000 and a mortgage balance of $400,000. This means that you have $300,000 in equity, and as you continue to make mortgage payments, your equity will increase. However, when opting for a home equity loan, homeowners should choose a certified private lender to ensure the best terms and conditions.


  • Home equity loans, also known as home equity installment loans or second mortgages, are a type of consumer debt that allow homeowners to borrow against the equity in their property.
  • The amount that homeowners can borrow with a home equity loan is determined by subtracting their current mortgage balance due from their home’s current market value.
  • There are two types of home equity loans: fixed-rate loans and home equity lines of credit (HELOCs).
  • Fixed-rate home equity loans provide borrowers with a lump sum of money, while HELOCs offer revolving lines of credit that can be used as needed.

Home Equity Loans: How Do They Work?

A home equity loan, also known as a second mortgage, allows homeowners to leverage the equity they have built up in their home as collateral for a lump-sum payment with a predetermined repayment period. Essentially, the equity in the home serves as collateral for the lender, making it a secured loan. Therefore, in the event that the borrower fails to make the necessary payments, the lender has the right to foreclose on the property.

In Canada, the amount a homeowner can borrow with a home equity loan is typically based on a combined loan-to-value (CLTV) ratio of 80% to 90% of the home’s appraised value. However, the amount of the loan and the interest rate charged also depend on the borrower’s credit score and payment history.

Home equity loans have set repayment terms with fixed interest rates, and borrowers must make regular, fixed payments covering both principal and interest. It’s important to note that a home equity loan differs from a home equity line of credit (HELOC), which operates as a revolving line of credit rather than a one-time installment.

Before considering a home equity loan, it’s crucial to carefully weigh all your options and potential risks. For example, if you plan to relocate, selling your home may result in a loss of money or make moving impossible. Additionally, if you’re using the loan to pay off credit card debt, it’s important to resist the temptation to accumulate new debt. Similarly, homeowners need to ensure that they understand the potential consequences of putting their home at risk before making any decisions.

How Much Can I Borrow With a Home Equity Loan?

To determine the maximum amount of a home equity loan, lenders will calculate the loan-to-value (LTV) ratio, which must be 90% or less for well-qualified borrowers. The LTV ratio is based on the appraised value of the home, including the balances of any existing mortgage, any existing home equity loans, any existing HELOCs, and the new home equity loan. For instance, if a borrower has a home appraised at $500,000 and an existing mortgage balance of $200,000, they may qualify for a home equity loan of up to $250,000.

When applying for a home equity loan, it’s crucial to keep in mind that there is a cap to the amount that you can borrow. Even if you have $300,000 in equity, most lenders won’t permit you to borrow that much money. However, lenders such as RenFi Capital enable homeowners to borrow up to 80% of their home’s value, minus any existing mortgage balances. Nevertheless, this figure may vary depending on various factors, such as your credit score, financial history, and current income.

What Is a Home Equity Loan Used For?

A home equity loan can be a practical way to convert the equity you’ve accumulated in your home into cash. This is especially true if you use the funds to enhance the value of your property or strengthen your financial standing by paying off high-interest debt. However, once you access your home equity, you are free to use the money however you please. Nonetheless, home equity loans are commonly preferred for significant and costly ventures because you receive the funds in one lump sum.

Here are some of the ways that people typically use home equity loans:

  • High-value, large-scale renovations, remodels, or improvements (kitchen remodel, room expansion, roof replacement, pool installation, energy-efficient upgrades).
  • Investing in real estate (owning a second property)
  • Paying for higher education (college or university tuition costs)
  • High-interest debt consolidation

In summary, a home equity loan can be an excellent way to fund home improvements, pay off high-interest debts, or achieve other financial goals. However, it’s important to weigh the pros and cons of borrowing against your home carefully and ensure that the loan amount is reasonable and can be repaid comfortably. If used wisely, a home equity loan can be a smart financial move, allowing you to save on interest payments and increase the value of your property. However, if you overburden yourself with the loan or use it only to shift debt around, you may face long-term financial consequences.

NOTE: You might be able to deduct the interest on your home equity loan if you use it to make home improvements or repairs.

What Should a Home Equity Loan Not Be Used For?

After accessing your home equity, you have the freedom to use the funds in any way you see fit. However, it’s important to remember that tapping into your home equity hastily may not always be the wisest decision. It’s important to keep in mind that your home is being used as collateral, and if you are unable to repay the loan obtained through a home equity loan, you risk losing your home.

Therefore, it is not recommended to use the funds provided to you on a home equity loan for frivolous expenses such as:

  • Purchasing luxury items
  • Taking a vacation
  • Investing in the stock market,

Using a home equity loan to fund any of the aforementioned items listed above may not be financially responsible in the long run. With that in mind, a home equity loan should not be viewed as a quick fix for financial troubles but rather as a strategic tool for achieving specific goals. It should not be used to fund a lifestyle beyond your means or to make speculative investments. That said, once you understand how to borrow against your home’s equity, the next step is to learn how to use it wisely and with a clear financial plan in place.

It’s important to note that a home equity loan should not be taken out lightly, as failing to repay the borrowed funds could result in the loss of one’s home. Home equity loans should not be used for frivolous expenses or investments, but rather for important expenses such as home renovations or debt consolidation. Before taking out a home equity loan, it’s essential to carefully consider one’s financial situation and consult with a financial advisor.

Home Equity Loans vs. HELOCs

Homeowners looking to access their home equity can do so with home equity loans or home equity lines of credit (HELOC).

Home equity loans provide borrowers with a lump-sum payment that is repaid over a set period of time, usually 5 to 15 years depending on the lender, at a fixed interest rate. However, the loan must be repaid in full if the home is sold. On the other hand, a HELOC is a revolving line of credit, similar to a credit card, that you can draw on as needed, pay back, and then draw on again. The draw period, usually 5 to 10 years, is followed by a repayment period of 10 to 20 years.

Moreover, unlike home equity loans, HELOCs provide a predetermined amount of money that you can draw from when necessary, providing more flexibility. This can be a good option if you need funds for a longer period of time. Although HELOCs have variable interest rates, your monthly payment can fluctuate over the loan term, making it difficult to anticipate how much you’ll owe. However, some lenders you may find offer HELOCs on a fixed rate.

Therefore, in determining which option is right for you and your situation, we recommend that you consider the purpose of the loan. If you know exactly how much you need to borrow and how you want to spend the money, a home equity loan is a good choice. On the other hand, if you’re not sure how much you’ll need to borrow or when you’ll need it, a HELOC may be more suitable.

It’s also important to note that HELOCs are revocable, meaning your lender could lower or close your credit line if your financial situation worsens or your home’s market value declines. However, while the idea behind a HELOC is that you can draw upon the funds as you need them, your ability to access that money is not guaranteed. To that end, researching different financing options, such as cash-out refinancing, is a great place to start if you’re looking for the best fit for you and your specific situation.


  • Home equity loans and home equity lines of credit (HELOCs) are two types of loans that allow borrowers to use the equity they have in their home as collateral.
  • A home equity loan offers a lump-sum payment with a fixed interest rate and fixed payments for the loan’s duration.
  • In contrast, HELOCs provide borrowers with a revolving line of credit with variable interest rates and minimum payment amounts that fluctuate based on the interest rate.
  • HELOCs come with a draw period during which borrowers can withdraw funds from their credit line, but they must make interest payments. After the draw period ends, the repayment period begins, and borrowers must repay any outstanding balance plus interest over a fixed term.
  • A home equity line of credit (HELOC) and a home equity loan are both considered as second mortgages, but they differ in how the funds are accessed. Unlike a home equity loan that provides a lump sum of money, a HELOC is a revolving line of credit.

What Benefits Can You Expect From a Home Equity Loan with RenFi Capital?

RenFi Capital provides financial assistance for debt consolidation and large-scale home renovations through home equity loans secured by the equity in your home. Our primary goal is to provide essential funding to those in need, ensuring financial relief. When you choose a home equity loan with RenFi Capital, you can expect several financial benefits.

Our home equity loans are the ideal way for homeowners to quickly and efficiently increase the comfort and value of their homes. We can expedite the loan process and provide access to essential funding in just 72 hours after submitting your application, since we are the lender for all submitted loans. Additionally, our home equity loans have better benefits, lower interest rates, and lower monthly payments than traditional lending options.

At RenFi Capital, we take pride in our innovative onboarding approach that eliminates the need for homeowners to provide us with onsite appraisals, bank statements, mortgage paperwork, or tax records to get approved. This makes the application process hassle-free and stress-free for our clients. We also provide a simplified, 100% secure digital application process that uses bank-level security and instant income verification through “Inverite,” the same secure banking software used by over 275 financial institutions across Canada.

With a RenFi Capital Home Equity Loan, you have the option of choosing quicker approval and funding rates than most traditional lenders. Explore the various ways a home equity loan with us can benefit you below. They are as follows:

  • No Onsite Appraisals or Document Submissions (bank statements, mortgage documents, or tax documents) Required
  • Streamline Application Process & 100% Secured Digital Experience
  • Fixed Rates At 1% Monthly Interest Costs
  • 3-minute application process and a 15-minute approval process
  • Borrow Up To 80% of the Equity in Your Home
  • Instant Income Verification Straight from Your Bank.
  • Up to 24-Month Terms
  • Fully Funded in 72 Hours
  • Repayment After 3 Months – No Penalty
  • Fixed Rate for Monthly Payments

RenFi Capital Home Equity Loan Requirements

Depending on the lender, there may be a different set of requirements for home equity loans. However, here at RenFi Capital, the requirements for our home equity loans include the following:

Credit Score: At least in the mid-600s

Home equity: You have at least 20% equity in your home.

Home Ownership: You or the co-applicant must be the registered property owner.

Loan-To-Value (LTV) Ratio: Up to 80% of a current home’s appraised value.

Loan Term: 12–24 months; and are closed loans with a 3-month interest penalty.

Interest Rates: 1% fixed interest-only payments

Customers Use: Renovation financing, home repairs, energy-efficient upgrades, debt consolidation, and more.

RenFi Capital offers a convenient and affordable solution to finance your home renovations with our home equity loans. Applying for a loan takes only 15 minutes, and you can receive approval within 72 hours. Depending on your credit profile, you may qualify to borrow up to 80% of the appraised value of your current home. Our team can verify your debt-to-income (DTI) ratio through your credit report and loan-to-value (LTV) ratio, ensuring a speedy and secure process.

With cutting-edge Fintech and Open Banking software, RenFi Capital provides rapid, secure, and interest-only home equity loans with a fixed monthly interest rate of only 1%. When you choose a home equity loan with RenFi Capital, a $50,000 kitchen renovation will only cost you $500 a month. This makes it an affordable option for homeowners in need of essential financing.

Our home equity loans are granted based on the equity of your home and secured as a secured mortgage on a 12-month term, repayable after only 3 months without penalty. This allows for lower interest rates, equal monthly payments, and more flexible terms than traditional lending options. When your term is up, our experts will help you refinance your loan with your original mortgage lender through your broker. If you want to refinance your loan or get a new first mortgage, RenFi Capital is here to help.

For more information on our home equity loan requirements or other related questions, feel free to contact us today to discuss how we can help you achieve your financial goals.

How to Obtain A Home Equity Loan With RenFi Capital

Now that you know what the requirements are for a home equity loan with RenFi Capital, let’s go on to explain how Toronto homeowners can go about obtaining a home equity loan with us.

To obtain a home equity loan with RenFi Capital, simply follow our quick and easy 3-step application process. However, it’s important to note that before applying, as our home equity loans are secured by the equity in the home, the applicant must be the registered owner of the property used as collateral to apply.

To start the home equity loan financing process, homeowners only need to provide access to their online banking information through our 100% secure digital application, which utilizes bank-level security and instant income verification through “Inverite.”

For large-scale home improvements or renovations, homeowners can provide the contractor’s name and contact information, their home’s value in relation to the loan amount, and their credit profile. RenFi Capital will then use bank-grade security software to collect necessary information to determine the loan’s value and your creditworthiness

In simpler terms, to apply for a home equity loan with RenFi Capital, follow these three easy steps:

Step 1: Quick 3-Minute Application

Step 2: Swift 15-Minute Approval

Step 3: Secure Funding in Just 72 Hours

After your application is approved, you’ll receive a lump sum payment that you’ll be required to repay to the lender in equal monthly installments over an agreed-upon interest rate period of 5–15 years. It’s important to note that the loan must be fully repaid before the property can be sold.

PLEASE NOTE: It is important to keep in mind that legal documents are involved in the mortgage process. This means it is essential to have a legal professional review all closing documents. Once the review is complete, please return the documents to RenFi Capital through your attorney.

Frequently Asked Questions - FAQs

The interest paid on a home equity loan can be tax deductible if the loan proceeds are used to “buy, build or substantially improve” your home, specifically for home renovations or repairs. However, due to increased standard deduction and the Tax Cuts and Jobs Act, it may not lead to savings for most filers if they itemize to deduct the interest paid on a home equity loan.

Yes! Borrowers who are eligible may have the option to secure both a home equity loan and a home equity line of credit on the same property. This provides access to additional funds beyond the first equity-based loan and potentially offers better rates or terms. This can also offer more flexibility, particularly if a home equity loan is obtained first and then a HELOC is used as needed.

However, this option is available to you depending on various factors. Qualifications are necessary for both home equity products, and each lender has its own eligibility requirements, which typically include meeting credit score, income, and debt-to-income ratio (DTI) criteria. It is also essential to consider whether taking out a second home equity loan is the right choice for you since it is not the right choice for every eligible borrower.

Calculating your home equity loan payments depends on several factors, such as the amount of equity in your home and the amount you intend to borrow from a private lender. To ensure accuracy, most lenders provide a home equity loan calculator. RenFi Capital offers a personalized loan calculator to estimate your monthly payment and interest rate. Answering a few simple questions is all it takes to use our calculator.

If you’re considering using your home equity to finance major expenses, it’s important to understand the differences between a second mortgage and a home equity loan. A second mortgage is an additional loan taken out against a property that already has a mortgage. However, the terms “second mortgage,” “home equity loan,” and “home equity line of credit” (HELOC) can be confusing. A second mortgage can either be a home equity loan, which provides a lump-sum loan with a fixed rate and term, or a HELOC, which offers a revolving line of credit with variable rates and ongoing access to funds.

If you fail to make payments on your home equity loan or HELOC, it could result in default and ultimately foreclosure. The actions taken by the home equity lender will depend on the remaining balance of the loan and the current value of your home. If you have a significant amount of equity in your home, your lender may initiate foreclosure proceedings, as it has a greater chance of recovering its investment once the primary mortgage is paid off. The greater the equity, the more likely your lender will opt for foreclosure.

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