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A readvanceable mortgage is a combined credit product that pairs a traditional amortizing mortgage with a HELOC under a single collateral charge, so the available HELOC room automatically increases as the mortgage principal is paid down.
The lender registers one collateral charge against the property, often for an amount higher than what was initially advanced. As the amortizing mortgage segment is paid down, the difference between the property's registered charge and the outstanding balance becomes available as HELOC room the borrower can draw on — without a new mortgage application or a fresh land-registry filing.
This makes a readvanceable mortgage attractive for homeowners who expect to tap equity over time, for example to fund renovations or investments, since it avoids the cost and process of a full refinance each time. The trade-off shows up later: because the product is built on a collateral charge, moving it to a new lender at renewal is generally more involved than a straight switch of a standard-charge mortgage.
Single collateral charge: the mortgage and HELOC segments sit under one registration, often for more than the amount initially advanced, so future re-advances don't require a new filing.
Popular for ongoing equity access: commonly used by homeowners planning renovations or investment purchases who want repeated access to growing equity.
Harder to switch at renewal: collateral charges generally can't be assigned to a new lender the way a standard charge can, so a switch or transfer often means a full discharge and re-registration.
Offered mainly by A lenders and credit unions: readvanceable products are most common among federally regulated banks and credit unions offering combined mortgage-plus-HELOC packages.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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