Mortgages
How a Home Equity Line of Credit (HELOC) Works in Canada
A HELOC lets you borrow against your home up to 65% of its value, at a variable rate usually lower than other credit. How much you can borrow, the costs, and the risks of using your home as security.
What is a HELOC?
A revolving line of credit secured by your home. You can borrow as needed up to the limit, repay, and borrow again, paying interest only on what you use. Rates are variable and usually lower than unsecured credit.
How much can I borrow with a HELOC?
The revolving HELOC part can be up to 65% of your home’s value. Combined with your mortgage, total borrowing against your home is usually capped at 80% of its value.
| Home value | Max HELOC (65%) | Max total with mortgage (80%) | HELOC room if mortgage is $400,000 |
|---|---|---|---|
| Top$600,000 | $390,000 | $480,000 | $80,000 |
| $800,000 | $520,000 | $640,000 | $240,000 |
| $1,000,000 | $650,000 | $800,000 | $400,000 |
What does a HELOC cost?
Interest on what you borrow, at a variable rate that moves with market rates. Setting one up can also involve appraisal, title search, title insurance and legal fees, and your lender may change your original mortgage terms.
What are the risks?
Your home is security for the debt. If you can’t repay, you could face serious consequences, including foreclosure. Because many HELOCs allow interest-only payments, balances can linger for years, and payments rise when rates go up.
When does a HELOC make sense?
For planned, large costs you will repay, such as renovations, or as a backup for emergencies. It is not a good idea for everyday spending, because easy access makes it simple to keep borrowing.
Keep reading
MortgagesHow to Renew Your Mortgage in CanadaWhen your lender has to contact you, why you shouldn’t just sign the renewal letter, and what switching lenders involves.
LoansPersonal Loan vs Line of CreditHow the two differ in rates, payments and flexibility, and which one suits a one-off cost or ongoing spending.
MortgagesHow Mortgages Work in CanadaWhat a mortgage is, the difference between term and amortization, how payments are calculated and what else you pay when you buy.- DebtWhat Is the Prime Rate in Canada Today?Canada’s prime rate is 4.7% and the Bank of Canada policy rate is 2.5% (changed October 28, 2026). What it means for lines of credit, variable mortgages and savings rates.
Official sources and further reading
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