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View optionHELOC & Home Equity in Canada
A home equity line of credit (HELOC) lets you borrow against the equity in your home, usually at a lower rate than unsecured credit. In Canada, lenders typically allow access to a percentage of your home's value minus your mortgage balance.
What HELOC and home equity loans are
A HELOC is a revolving, secured line of credit registered against your property. You can draw, repay and redraw up to your limit. A home equity loan is a lump sum repaid on a schedule. Both are secured by your home, which means the lender can take the property if you default.
Eligibility
- You own property in your province with sufficient equity
- You have income and credit that meet the lender's criteria
- Your total borrowing against the home stays within the lender's loan-to-value limit
- You can cover the costs of appraisal, legal and registration fees
How it works
- Calculate your available equity: home value minus mortgage balance
- Apply with the lender, who will appraise the property and assess your credit
- Set up the HELOC, usually as a revolving credit limit
- Draw only what you need and understand that interest is typically variable
- Make at least the interest payments to avoid growing the balance
What to watch for
- A HELOC is secured by your home — default risks your property
- Rates are usually variable, so payments can rise when prime rises
- Using a HELOC to consolidate unsecured debt converts it to secured debt
- Lenders may reduce or freeze a HELOC if property values fall
Frequently asked questions
How much can I borrow with a HELOC in Canada?
Lenders typically allow total borrowing against the home of up to 65% of its value for a HELOC, or up to 80% when combined with a mortgage, though individual lender policies vary.
Is a HELOC cheaper than a personal loan?
HELOC rates are often lower because the loan is secured by your home. However, the rate is usually variable and your property is at risk if you default.
Can I use a HELOC for debt consolidation?
Yes, but understand that you are converting unsecured debt into secured debt. If you default, you could lose your home. Consider whether your spending pattern will change first.
What happens if my home value drops?
The lender may reduce or freeze your available credit if the loan-to-value ratio rises above its limit. You would still owe the balance you have drawn.
Related tools and guides
Find HELOC and home equity loans by province
Important legal information
Promissory.ca is not a lender, bank, mortgage broker or credit counsellor. We do not make lending decisions and we do not charge you a fee to use this service.
Submitting an application does not guarantee approval. All applications, rates and terms are set and approved solely by the individual lender or licensed professional.
Rates, fees and loan amounts vary by lender, province, loan type and your credit profile. Advertised rates are the lender's lowest offered rate and may not be available to you.
Lenders may perform a credit check with one or more credit bureaus, including Equifax and TransUnion. A hard credit inquiry may affect your credit score.
There is no obligation to accept any offer presented to you. Review every agreement carefully before signing.
Borrow only what you can reasonably afford to repay. Late or missed payments may result in additional fees, collection activity and negative credit reporting.
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If you are struggling with debt, consider contacting a non-profit credit counselling service or a Licensed Insolvency Trustee before borrowing more.
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