How to Build Wealth with Your Mortgage

Written By Renee Huse

Renee Huse, founder of Spire Mortgage Team in Alberta, has helped hundreds of Albertans see their mortgage as more than just a monthly bill.

It’s easy to think of your mortgage as a debt. Something that weighs you down or locks you in. But when it’s structured properly—and you’ve got a plan—you can use that same mortgage to grow real, long-term wealth.

Let’s talk about how.

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What does “building wealth with your mortgage” actually mean?

Most of our clients start out thinking a mortgage is just a cost—something you have to “pay off” over 25 years. And technically, yes, it is a loan. But that loan is attached to an asset: your home. And in Alberta, especially in cities like Calgary and Edmonton, that asset can increase in value over time.

As you make payments (and as your home’s value grows), you build equity—that’s the portion of the home you truly own. And that equity can be used as a financial tool. You can borrow against it to invest, renovate, consolidate other debts, or even buy a second property.

So instead of just “paying down debt,” you’re building up a resource that opens doors for you.

How home equity works in real life

Let’s say you bought your home in Airdrie five years ago for $400,000 with 10% down. That’s a $40,000 down payment and a $360,000 mortgage. Over five years, you’ve paid your mortgage down to $325,000. Meanwhile, your home is now worth $500,000.

So what’s your equity?

  • Current value: $500,000
  • Remaining mortgage: $325,000
  • Your equity: $175,000

That’s $175,000 of potential wealth you’ve built, just by making your regular payments and riding Alberta’s property market. That equity doesn’t just sit there—it can be tapped through refinancing.

Smart refinance strategies in Alberta

Refinancing means replacing your existing mortgage with a new one—often to access equity or improve your cash flow.

Here are three common wealth‑building strategies we’ve used with Alberta homeowners:

1. Equity take‑out for investing

You refinance up to 80% of your home’s value, pull out equity, and invest in a second property, RRSPs, or even a business. Let’s do the math:

  • Home value: $500,000
  • Max refinance: 80% of $500K = $400,000
  • Existing mortgage: $325,000
  • Available equity to pull out: $75,000

That $75,000 could be your down payment on a small rental property.

2. Debt consolidation

If you’re carrying high‑interest debts (credit cards, lines of credit), you can roll them into your mortgage at a much lower rate.

  • Credit card rate: ~19%
  • Mortgage rate: 4.34% (conventional)

This can improve monthly cash flow and redirect savings toward wealth‑building (like investing or prepaying your mortgage).

3. Renovation for value

Use your equity to update kitchens, bathrooms, or basements—boosting your home’s resale value. In Alberta’s market, well‑renovated homes often sell faster and at a premium.

What if rates keep rising or falling?

We hear this question every week. “Should I wait for rates to drop before I refinance or invest?” Or the opposite: “What if rates keep going up?”

Here’s the thing: wealth‑building isn’t about timing the market perfectly—it’s about building a strategy that works in any market.

If rates fall, great—you may lock in lower costs later. If they rise, acting now could lock in today’s values and payments before affordability tightens again.

The key is not the rate alone—it’s what you're doing with the money. If you refinance to buy an appreciating asset (like a rental property) or free up cash flow that helps you sleep at night, that move can still make sense—even in a higher‑rate world.

Rates move. Your goals shouldn’t.

Can I use a HELOC to build wealth?

Yes—but it has to be done carefully.

A HELOC (Home Equity Line of Credit) is a revolving credit line secured against your home. If you have more than 20% equity and strong credit, most lenders will allow you to set one up.

Here’s how it can help:

  • You can access equity without refinancing your entire mortgage.
  • You only pay interest on what you use.
  • Rates are usually variable, and interest‑only payments keep cash flow flexible.

We’ve had Alberta clients use HELOCs for:

  • Down payments on rentals
  • Short‑term business capital
  • Renovation projects
  • Bridging between home sales

But caution: HELOCs require discipline. Unlike a mortgage, there’s no automatic repayment schedule. Used wrong, they can become a financial treadmill. Used right, they’re a flexible tool in your wealth‑building kit.

How to use prepayment privileges to build wealth faster

Most Canadians don’t realize how much interest they can save just by making a few smart extra payments per year.

Let’s look at a $450,000 mortgage at 4.34% with 25‑year amortization:

  • Regular monthly payment: ~ $2,450
  • If you increase your payments by just 10% (~ $245), you’d save **over $17,000** in interest and be mortgage‑free **nearly 2 years sooner**.
  • Add one $5,000 lump sum per year? Now you're shaving off 4+ years and saving **over $45,000**.

Most mortgages allow:

  • 10–20% lump sum payments per year
  • 10–20% payment increases annually

And it’s penalty‑free—you just need to know how and when to trigger those options. It’s one of the simplest, safest ways to build wealth with your mortgage.

Real Alberta Case Study: Buying a second property with home equity

Client: Melissa and Jason, mid‑30s, homeowners in south Edmonton
Goal: Start building a rental portfolio
Home value: $520,000
Remaining mortgage: $330,000
Equity available to refinance: $86,000 (80% of $520K = $416K, minus $330K balance)

We helped Melissa and Jason refinance their home at 4.34% and pull out $86,000. They used $75,000 of that to buy a $300,000 rental in Leduc with 20% down + closing costs.

Rental math:

  • Monthly rent: $1,800
  • Rental mortgage at 4.54% (20% down, $240K mortgage): ~ $1,325/month
  • Net monthly cash flow: ~ $475 (after taxes and insurance)

They’re now building equity in two properties, not just one. The refinance added $300/month to their own mortgage, but the rental more than covers that. And because they have a long‑term plan, this was a strategic move—not a rushed one.

Glossary

Equity: The portion of your home’s value you own, calculated as home value minus mortgage balance.

Refinance: Replacing your current mortgage with a new one—usually to access equity or get better terms.

HELOC: A Home Equity Line of Credit; flexible borrowing against your home equity with interest‑only payments.

Conventional Mortgage: A mortgage with 20% or more down payment, not insured by CMHC.

Rental Property Mortgage: A mortgage for an investment property; typically requiring 20% down and higher rates.

Cash Flow: The difference between what a property brings in (rent) and what it costs to carry (mortgage, taxes, etc.).

Qualifying Rate: The rate used to test whether you can afford a mortgage under current Canadian stress test rules.

Debt Consolidation: Combining higher‑interest debts into your mortgage to lower overall interest costs.

Appraisal: A professional estimate of your home’s value—usually required during refinancing.

Prepayment Privileges: Options built into most mortgages that allow you to make extra payments without penalty.

FAQs

Can I refinance if I haven’t owned my home for long?
It depends how much equity you’ve built. If you bought recently with 5% down, there may not be enough equity to refinance yet.

Will refinancing increase my monthly payment?
It might, especially if you’re taking out more money. But we’ll map that out clearly before anything is signed.

Does refinancing trigger a penalty?
If you’re breaking your term early, yes—there’s usually a penalty. We’ll always calculate whether the refinance benefit outweighs the cost.

Can I use a refinance to pay off my car loan or credit card debt?
Yes, that’s a common strategy. Rolling high‑interest debt into your mortgage can reduce monthly payments and stress.

What credit score do I need to refinance?
Most lenders look for 650+, but we’ve helped many Alberta clients with less than that through Alt‑A or B‑lenders.

Let’s build a plan together

Your mortgage isn’t just a loan—it’s a tool. And with the right plan, it can help you build real, lasting wealth here in Alberta. Whether you're sitting on equity, eyeing a rental, or just want better cash flow, there’s a smart next step.

Give us a call or fill out an application at this link https://spiremortgage.ca/apply-now and our team will get in touch with you to start building a plan that suits you.

Renee Huse
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