only a good idea if the cost of the credit is cheaper than the mortgage. which is hardly ever the case.
This is the thing I think a lot of people are missing. BOC Interest Rates are at 1% - and could go lower.
This means a lot of people's Line of Credit is at 5% or 6%, which is possibly lower than many people's mortgage rate.
Notwithstanding doom & gloomer's rants, much of the reason for increases in house prices over the past decade
is due to the fact that mortgage carrying costs are significantly lower than they were in the 1980's and 1990's.
While I'm certainly not suggesting that house prices will continue to climb,
people are misguided if they think house prices are going to plunge off a cliff.
30 year mortgage rates in the US are now below 5%, and this expense is tax deductible!
Much of the reason that more houses aren't selling in the USA is because banks have virtually stopped lending money.
If Obama ever succeeds in getting banks to start lending again, then I'd expect many houses in the US will be snapped up in a hurry.
With US Federal interest rates close to 0% - it will be unquestionably cheaper to have a mortgage than to be paying rent.
Fence sitters who salivate at the prospect of lower house prices, may ironically be kicking themselves in a few years for missing the opportunity to buy when both the price of a house as well as the cost of a mortgage were at a low point in the economic cycle.