[TouringTeg]

Just this morning I heard a story third hand so take it with a grain of salt.

Couple purchases home in Victoria and it goes up in value. They also own a 50% stake in an investment property (rented out). They have borrowed all the equity out of their primary residence for renos, travel to Europe, and nice cars. They decide to buy out their partner on the investment property by getting a line of credit.

The fixed 5 year term is up for renewal on their primary home worth about $720k. They have taken the max equity out so I assume the mortgage is pretty big. They also have to service the debt on the investment property and the line of credit. The bank said they must qualify at 5.09% and now they don't qualify for a mortgage on their own home. They were then offered a loan at 8% by the same bank as they are considered high risk. (!)

Now they are looking at alternative lending options (broker etc).

Pretty scary but they have no one else to blame.