Collateral Charge vs. Standard Charge Mortgage

[Paul S.]

Hi everyone.

This is regarding a Canadian property and Canadian lender. The lender gave me 2 options:

1) Standard Charge: I pay it off over the years per usual

2) Collateral Charge: the registered amount does not reduce. As the mortgage is paid down, my available credit in a HELOC grows. In other words, I can borrow back up to the original amount via a line of credit, without a new loan application.

It seems that the collateral charge offers more flexibility. But the registered amount never reduces. Not sure if this will decrease my ability to borrow money from other lenders later.

What does everyone think of the pros and cons of each option?
Which one do fellow investors use?

Cheers!

Paul