Holiday Spending vs. Home Equity: What Homeowners Should Know

The holidays are a beautiful mix of joy, chaos… and extra expenses. 🎄

Between gifts, travel, winter activities and hosting, it’s very common for homeowners in the Niagara, Hamilton, Halton, Brant and Haldimand–Norfolk regions to look at their house and think:

“Maybe I should tap into my home equity and clean this all up.”

Before you dip into your equity to pay off holiday debt, it helps to understand what home equity really is, how lenders look at it, and where a professional home appraisal fits into the picture.

This article walks Ontario homeowners through the pros, cons, and key questions to ask before you turn your house into an “ATM.”

What Is Home Equity, Really?

Home equity is simply:

Your home’s current market value – what you owe on it = your equity.

Example:

• Current estimated value: $700,000

• Mortgage balance: $450,000

• Equity: $250,000

That equity is part of your net worth. For many homeowners in the Niagara and Hamilton areas, it’s the single largest asset they own.

Because of that, people consider using equity to:

• Consolidate high-interest credit cards

• Pay off lines of credit or personal loans

• Fund renovations or upgrades

• Help children with education or a down payment

Around the holidays, the “consolidate credit” part gets especially tempting.

Why the Holidays Create Pressure Around Money

December spending adds up quickly:

• Gifts for kids, family, coworkers and teachers

• Extra groceries and entertaining

• Winter trips or flights

• Hockey tournaments and activities

• “Tap now, deal with it later” moments that don’t feel big, but add up

By January or February, you might be staring at:

• Multiple credit cards at 19–25%+ interest

• A line of credit that was “temporary” but hasn’t gone away

• Buy-now-pay-later plans coming due

That’s when many people start asking:

“Wouldn’t it be smarter to roll this into my mortgage at a lower rate?”

Sometimes it is smarter. Sometimes it quietly makes things worse. The key is understanding how the numbers and risk really work.

The Two Most Common Ways Homeowners Use Equity

There are two main tools Ontario homeowners use to access equity:

1. Refinancing Your Mortgage

This means replacing your existing mortgage with a new, usually larger one.

You might:

• Increase your mortgage balance to pay off other debts

• Possibly get a different rate or term

• Start a new amortization period (for example, 25 years)

In Canada, lenders typically allow you to borrow up to 80% of your home’s appraised value, subject to qualification and lender policies.

Why an appraisal matters here:The bank or lender may require a professional real estate appraisal to confirm your property’s current market value before approving the new mortgage amount.

2. Getting a Home Equity Line of Credit (HELOC)

A HELOC is a revolving line of credit secured by your home.

• You can borrow, pay it down, and borrow again as needed.

• The interest rate is usually lower than credit cards, but often variable.

• Minimum payments may be interest-only, which feels easy… but can drag the balance out for years.

Again, the lender’s decision is based partly on your home’s value, your income, your credit profile and overall risk. An appraisal is often part of that review.

Holiday Spending vs. Home Equity: Pros and Cons

It’s not always wrong to use home equity after holiday spending. But it’s a big decision.

Potential Benefits

1. Lower interest rate compared to credit cards Rolling 20–25% credit card debt into a lower-rate mortgage or HELOC can reduce your monthly payment and the interest you pay over time.

2. Simplified payments Instead of juggling several cards and due dates, you may have one single payment.

3. Cash flow relief Lower monthly payments can create breathing room in your budget, especially after an expensive holiday season.

Real Risks You Shouldn’t Ignore

1. You’re putting your home on the line Unsecured credit card debt is painful, but it isn’t tied to your house.Once you consolidate that debt into a mortgage or HELOC, it becomes secured against your property. If things go wrong and you can’t pay, your home is at risk.

2. Extending short-term spending over 20–25 years Holiday purchases like toys, trips or dinners are short-lived.If you roll them into your mortgage and stretch repayment over decades, you could end up paying far more in total interest, even at a lower rate.

3. The “spend–consolidate–repeat” trap Without changes to spending habits, it’s easy to:

1. Rack up holiday or lifestyle debt

2. Consolidate into home equity

3. Repeat next year

Each time, your mortgage grows and your long-term equity shrinks.

4. Higher payments if rates rise If you choose a variable-rate mortgage or HELOC and rates increase, your monthly payment can go up. That’s stressful if you were already stretched.

Where a Professional Appraisal Fits In

When you apply for a refinance or HELOC, lenders want a neutral, supportable opinion of your home’s value.

That’s where a professional real estate appraiser comes in.

What the Appraiser Does

A qualified appraiser will:

• Inspect the property (interior and exterior)

• Note the size, condition, age, layout, upgrades and features

• Consider location (neighbourhood, schools, amenities, traffic, surrounding uses)

• Analyse recent comparable sales in your area

• Apply accepted appraisal methods (for example, the Direct Comparison Approach)

• Provide an independent, well-supported estimate of current market value

This value is then used by the lender to calculate how much they’re willing to lend against the property.

Why You Might Want Your Own Appraisal First

Sometimes a lender orders the appraisal directly. In other cases, homeowners choose to order a private appraisal before talking to the bank or mortgage broker.

This can help you:

• Understand your true equity position before making decisions

• Decide whether your plan (refinance, HELOC, or waiting) really makes sense

• Enter lender conversations with realistic expectations

• Support separation, estate planning, or other year-end legal/financial needs

If you’re considering refinancing after the holidays, and the market has been shifting in your area, a current appraisal can be a very helpful reality check.

Key Questions to Ask Before Using Home Equity After the Holidays

Before you sign any new mortgage or HELOC paperwork, ask yourself:

1. What exactly am I using the money for?

Is it:

• One-time, exceptional debt (major repair, unexpected expense)?

• Or repeating lifestyle and holiday spending?

Using home equity for something that adds value (like necessary repairs or sensible renovations) is different than using it for short-term consumption.

2. Will this actually solve the problem, or just hide it?

If you consolidate $20,000 in credit card debt but don’t change your habits, the cards can slowly fill up again… and now you’ve got a bigger mortgage plus more debt.

3. How will this affect my long-term plans?

Think about:

• When you’d like to be mortgage-free

• Retirement goals

• Future moves (upsizing, downsizing, buying a cottage or investment property)

Will increasing your mortgage today delay those goals by several years?

4. Do I fully understand the new payment and interest cost?

Clarify with your lender or broker:

• The new monthly payment

• The total interest cost over the life of the loan

• How different amortization periods change the numbers

• What happens if interest rates change

If anything isn’t clear, keep asking questions until it is.

5. Do I know what my house is really worth right now?

Online estimates and neighbour stories are often misleading.If your equity calculation is based on a guess, you might be making a big financial decision on shaky ground.

A professional appraisal gives you a neutral, documented value, which can be especially important in:

• A changing market

• Divorce or separation

• Estate planning or inheritance discussions

• Refinancing multiple properties or rental portfolios

When Using Home Equity Might Make Sense

Using home equity isn’t automatically bad. It can be sensible when:

• You’re consolidating high-interest debt once, with a clear plan not to repeat the cycle

• You’re improving the property in ways that are likely to support value (necessary repairs, safety upgrades, moderate renovations)

• You clearly understand the new payments and have room in your budget

• You’ve confirmed your home’s value with a professional appraisal

The key is that the decision is intentional, informed and part of a bigger plan – not just a quick fix for January’s holiday hangover.

When It Might Be Better to Pause

It might be wise to hold off on tapping your equity if:

• You’re already stretching just to make your current mortgage payments

• You’re relying on future raises or bonuses that aren’t guaranteed

• You’re planning to sell or move in the near future

• You feel pressure or panic, rather than confidence, about the decision

In those cases, talking to a qualified financial advisor or credit counsellor may be a better first step.

How Cade Appraisals Can Help

Before you use your home equity to clean up holiday spending, it’s worth asking:

• What is my home actually worth right now?

• How much equity do I really have, after realistic selling costs?

• How would a lender view my property in today’s market?

At Cade Appraisals, we provide independent, AIC-compliant appraisal reports for homeowners, lenders, lawyers and accountants across:

• Niagara Region

• Hamilton

• Halton

• Brant

• Haldimand–Norfolk

A professional appraisal can:

• Give you a clear, supportable picture of your home’s market value

• Help you compare different scenarios (refinance, stay put, sell or hold)

• Provide documentation that lenders, lawyers and advisors can rely on

• Bring peace of mind that your decision is based on more than guesswork

If you’re thinking about refinancing or using a HELOC after the holidays, a current appraisal is a powerful first step.

👉 Ready to understand your home’s value? Request an appraisal

 or contact Cade Appraisals today to discuss your situation in confidence.