Access up to 80% of your home's value with flexible borrowing. Perfect for renovations, investments, or emergency funds.
Understanding how HELOCs work and why they're a powerful financial tool for Canadian homeowners
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured against the equity you've built in your home. Think of it as a financial safety net that allows you to borrow money when you need it, up to a predetermined limit, and only pay interest on what you actually use.
In Canada, you can typically borrow up to 65% of your home's appraised value, minus any outstanding mortgage balance. When combined with your mortgage, the total cannot exceed 80% of your home's value.
Borrow, repay, and borrow again without reapplying. Your available credit replenishes as you pay down the balance.
Interest rates are typically Prime + 0.5% to 1%, making HELOCs one of the most affordable borrowing options available.
Minimum monthly payments are typically interest-only, giving you flexibility in managing your cash flow.
Access funds through online banking, checks, or a dedicated credit card linked to your HELOC account.
HELOC: Revolving Credit Line
Draw funds as needed up to your limit, similar to a credit card. Pay interest only on what you use.
Home Equity Loan: Lump Sum
Receive a one-time lump sum with fixed payments over a set term. Interest charged on the entire amount from day one.
Discover why thousands of Canadian homeowners choose HELOCs for their financial flexibility
Enjoy rates significantly lower than credit cards or personal loans because your home secures the credit line. Typically Prime + 0.5% to 1%.
Unlike traditional loans, you're only charged interest on the amount you actually borrow, not your entire credit limit.
As you pay down your balance, your available credit replenishes automatically—no need to reapply each time you need funds.
Have peace of mind knowing you have access to funds for unexpected expenses without depleting your savings.
Pay off credit cards and other high-interest debts with a HELOC's much lower rate, saving thousands in interest charges.
When used for investment purposes or to generate income, HELOC interest may be tax deductible. Consult your tax advisor.
Flexible financing for life's planned and unplanned expenses
Finance kitchen upgrades, bathroom remodels, or additions that increase your home's value.
Consolidate high-interest credit cards and loans into one lower-rate payment and save on interest.
Cover unexpected medical bills, urgent repairs, or other financial emergencies without stress.
Pay for tuition, books, and living expenses for yourself or your children's education.
Leverage your home equity to invest in rental properties, stocks, or business ventures.
Fund business startup costs, inventory, equipment, or cash flow needs for your enterprise.
Remember that your home secures a HELOC. It's important to borrow responsibly and ensure you can comfortably make payments. Avoid using a HELOC for discretionary spending like vacations or luxury purchases that don't provide long-term value.
What you need to qualify for a Home Equity Line of Credit in Canada
Required: 20%+ equity
You need at least 20% equity in your home. Lenders typically allow you to borrow up to 65% of your home's value, or up to 80% when combined with your mortgage.
Example:
Home worth $500,000 with $300,000 mortgage = $200,000 equity
Maximum HELOC: $325,000 (65% of value) - $300,000 mortgage =
$25,000 available
Required: 650+ minimum
Most lenders require a credit score of at least 650, though higher scores (680+) will secure better rates and terms.
Required: Verifiable income
Lenders need proof of steady employment and sufficient income to cover all debt obligations including the HELOC.
Documentation needed:
GDS < 39%, TDS < 44%
Your debt service ratios must meet lending guidelines to ensure you can afford the payments.
GDS (Gross Debt Service):
Housing costs ≤ 39% of gross income
TDS (Total Debt Service):
All debts ≤ 44% of gross income
Property Appraisal
Lender will order an appraisal to determine your home's current market value
Property Type
Must be owner-occupied residential property in Canada
Property Insurance
Adequate home insurance coverage is mandatory
Clear Title
Property must have a clear title with no legal issues or liens
Not sure if you qualify? Let's find out together.
Check Your EligibilityA step-by-step guide to securing your Home Equity Line of Credit
Meet with one of our mortgage specialists to discuss your financial goals, review your options, and determine how much you may qualify to borrow based on your home equity and financial situation.
Gather required documentation including proof of income, employment verification, property tax bills, mortgage statements, and identification. We'll provide you with a complete checklist.
Required Documents:
The lender will order a professional appraisal to determine your home's current market value. This establishes how much equity you have and how much you can borrow. In some cases, a desktop appraisal or automated valuation may be sufficient.
Submit your formal application along with all documentation. The lender will review your credit history, employment, income, and debt service ratios to assess your qualification and determine your credit limit.
Receive your approval with confirmed credit limit and interest rate. Review the terms and conditions carefully, including any fees, the interest rate structure, and repayment requirements.
Sign the final HELOC agreement and related documents (often can be done electronically). Once complete, your HELOC will be registered against your property and you'll have immediate access to your credit line through online banking, checks, or a linked credit card.
Your HELOC is now active and ready to use!
3-5 Weeks
From initial consultation to accessing your funds
Understanding what you'll pay to access and maintain your HELOC
Prime + 0.5% to 1%
Most HELOCs have variable rates tied to the Prime rate. With Prime currently around 6.45%, you can expect rates between 6.95% - 7.45%.
Monthly Interest Example:
$50,000 borrowed at 7% = ~$292/month interest-only payment
$500 - $1,500
$0 - $100/year
Some lenders charge an annual administration fee to maintain your HELOC. Many lenders waive this fee entirely, especially for long-term customers or larger credit lines.
Tip: Ask about fee waivers during negotiation
Usually $0
Most lenders don't charge fees for drawing on your HELOC, making payments, or routine transactions. However, some may charge for paper statements or non-standard services.
If you close your HELOC or switch lenders: $200-$400
For insufficient funds or missed payments: $45-$50
Some lenders charge for reactivating after payoff: $0-$75
For paper statements (usually waived): $0-$5/month
HELOC
7%
Prime + 0.5-1%
Credit Card
20%+
High interest rate
Personal Loan
10-15%
Fixed rate
HELOCs typically offer the most competitive rates for homeowners with equity
Get answers to the most common questions about HELOCs
Have more questions? Our mortgage experts are here to help.
Ask Us AnythingOur mortgage specialists are here to help you unlock the power of your home equity with a HELOC that fits your financial goals. Get personalized advice and competitive rates.
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