mortgages and a more regulated market. Indeed, the recession has pushed the Canadian government to take measures aimed at mitigating the risks associated with taking a HELOC. Some of these measures may have impacted the growth of the HELOC market, limiting the demand on the customer side and making lending criteria tighter. A 2011 decision to make HELOCs ineligible for government-backed “portfolio insurance” was one of them. This insurance was used by lenders to “securitize pooled mortgages through the National Housing Act Mortgage-Backed Securities (NHA MBS) program”. Another measure was the Office of the Superintendent of Financial Institutions (OSFI) decision to cap the maximum LTV ratio for HELOCs at 65%, thus limiting the amounts homeowners could leverage from their property. Underwriting rules were also made stricter through the Residential Mortgage Underwriting Practices and Procedures Guideline. United Kingdom Despite the proliferation of HELOC products in the US and Canada, the UK market did not have a similar product offering pre-2021. This is significant as the UK market has historically replicated innovative financial products developed in the US such as credit cards or online payments. This can be partly attributed to the fact that the UK banking system is highly consolidated with little product innovation among the major lenders. This changed in the post-pandemic context where innovation in the financial services industry has accelerated, with ‘fintechs’ introducing new products to the market. The first UK HELOC product was in 2021, by the fintech Selina Finance. As of 2022, despite less than 5% per capita utilisation of HELOC products compared to mature, established markets such as the US and Canada, UK customers have shown increasing tendency to use HELOC products as a substitute to existing consumer finance tools. As a result, annual HELOC originations have increased fivefold, from $50m in 2021 to $250m in 2022. References External links Federal Reserve site offering information on HELOC loans Mortgage Credit Loans