HELOC CalculatorCanada

A HELOC (Home Equity Line of Credit) is a revolving line of credit secured against your home’s equity. You can borrow up to your approved limit anytime, paying interest only on the amount you use. It works like a credit card backed by your home, with lower interest rates than unsecured credit.

In Canada, you can borrow up to 65% of your home’s value with a standalone HELOC. When combined with a mortgage, your total borrowing cannot exceed 80% of your home’s value. For example, if your home is worth $800,000 and you owe $400,000 on your mortgage, you could qualify for a HELOC up to $240,000.

Most HELOCs are priced at the lender’s prime rate plus 0.5%. With prime currently at 5.95%, typical HELOC rates are around 6.45%. Through a mortgage broker, well-qualified borrowers may access rates as low as prime + 0%.

Your HELOC limit is the lower of: (1) 65% of your home value, or (2) 80% of your home value minus your mortgage balance. The formula is: Home Value × 80% - Mortgage Balance = Maximum HELOC.

Most lenders require a minimum credit score of 650 for HELOC approval, though some require 680 or higher. Higher scores typically qualify for better rates, such as prime + 0% instead of prime + 0.5%.

HELOC minimum payments are interest-only. The calculation is: Balance × Annual Interest Rate ÷ 12 = Monthly Payment. For example, a $100,000 balance at 6.45% requires a minimum monthly payment of $537.50.

Yes. Unlike most mortgages, HELOCs have no prepayment penalties. You can pay down or pay off your entire balance at any time without fees.

A HELOC is a revolving line of credit you can draw from repeatedly, while a home equity loan is a one-time lump sum loan with fixed payments. HELOCs have variable rates and interest-only minimums; home equity loans have fixed rates and principal-plus-interest payments.

A HELOC is a line of credit at lower rates (around 6.45%) with a maximum 80% combined LTV. A second mortgage is a fixed loan, often from private lenders at higher rates (8-15%+), that can go up to 90-95% LTV. Second mortgages are typically used when a HELOC is not available.

Choose a HELOC if you want ongoing flexible access to funds without disturbing your current mortgage rate. Choose refinancing if you want a lump sum at potentially lower fixed rates and prefer one simple payment. Refinancing has higher closing costs but may offer lower rates.

HELOC interest may be tax deductible if the borrowed funds are used to earn investment income (such as investing in stocks or rental property). Interest on funds used for personal purposes like renovations or vacations is not deductible. Consult a tax professional for your specific situation.

You can use HELOC funds for virtually any purpose: home renovations, debt consolidation, investments, education expenses, emergency funds, major purchases, or any other financial need. There are no restrictions on how you use the money.

HELOC approval typically takes 2-4 weeks from application to funding. This includes time for income verification, property appraisal (if required), and legal registration. Some lenders offer faster turnaround for straightforward applications.

Most lenders require an appraisal to confirm your home’s current market value. Some may accept automated valuation models (AVMs) for lower loan amounts. The appraisal typically costs $300-$500, often paid by the borrower.

When you sell your home, your HELOC balance must be paid in full from the sale proceeds at closing, just like your mortgage. Your HELOC is discharged as part of the sale transaction.

Yes, HELOCs are available on rental and investment properties, though rates may be slightly higher (prime + 0.5% to 1%) and maximum LTV may be lower (often 65-75% combined). Lenders may have stricter qualification requirements for investment properties.

A readvanceable mortgage combines your mortgage and HELOC into one product. As you pay down your mortgage principal, that amount becomes available in your HELOC automatically. Major banks offer these as TD Flexline, RBC Homeline, Scotiabank STEP, and similar products.

Opening a HELOC may cause a small temporary dip in your credit score due to the credit inquiry and new account. Over time, having a HELOC can help your score by lowering your overall credit utilization rate if you are not using the full limit.

Like mortgages, HELOCs are subject to a stress test. You must qualify at the higher of: the Bank of Canada benchmark rate (currently 5.25%) or your actual HELOC rate plus 2%. This ensures you can handle payments if rates increase.

Traditional HELOCs typically require a credit score of 650+. If your credit is lower, options include credit union HELOCs (sometimes more flexible), second mortgages from alternative lenders (higher rates), or working to improve your credit before applying.

The maximum standalone HELOC is 65% of your home’s value. Combined with a mortgage, the maximum is 80% of home value. On a $1,000,000 home, this means up to $650,000 as a standalone HELOC or up to $800,000 combined with your mortgage.

A high HELOC balance can affect mortgage renewal by changing your debt ratios and overall risk profile. Some lenders may require you to pay down your HELOC or may offer less competitive renewal rates. It is important to consider this when borrowing heavily against your HELOC.

Some lenders allow you to convert a portion of your HELOC balance to a fixed-rate term loan within the same product. This gives you the security of fixed payments on some of your borrowed amount while keeping remaining HELOC room flexible.

HELOC fees may include: appraisal fee ($300-$500), legal/registration fees ($500-$1,000), and potentially an annual fee ($50-$100 with some lenders). Many lenders waive some fees for qualified borrowers or offer fee rebates. Through a broker, you may avoid many of these costs.

You can apply directly through your bank or through a mortgage broker. To apply, you will need: government ID, proof of income, mortgage statement, property tax bill, and home insurance. A broker can compare options from multiple lenders to find you the best rate and terms.