HELOC Canada: Home Equity Line of Credit Guide 2026
A Home Equity Line of Credit (HELOC) lets you borrow against the equity in your home at competitive interest rates. Used wisely, it's one of the most flexible and cost-effective forms of credit available to Canadian homeowners.
What Is a HELOC?
A HELOC (Home Equity Line of Credit) is a revolving credit facility secured against your home. Unlike a home equity loan with a lump-sum disbursement, a HELOC works like a credit card — you draw what you need, when you need it, and you only pay interest on the amount you've borrowed.
In Canada, HELOCs are governed by OSFI guidelines and are capped at 65% of the home's value as a standalone product. When combined with a mortgage (as part of a readvanceable mortgage), the total cannot exceed 80% LTV.
How Much Can You Borrow?
HELOC Borrowing Limit Formula
Note: As a standalone HELOC (without a mortgage), the cap is 65% of home value. The 80% combined LTV applies to readvanceable mortgages with a HELOC component.
When Should You Use a HELOC?
Good Uses
- Home renovations that increase property value
- Paying off high-interest credit card debt
- Investing in an RRSP, FHSA, or TFSA
- Emergency fund backstop
- Education costs
- Down payment on an investment property
Risky Uses
- Vacations and lifestyle spending
- Speculative investments
- Financing a vehicle (auto loan is better)
- Covering regular living expenses
- Gambling or crypto speculation
HELOC vs. Other Financing Options
| Feature | HELOC | Personal Loan | Credit Card |
|---|---|---|---|
| Typical Rate | Prime + 0.5–1% | 8–12% | 19.99%+ |
| Access Type | Revolving | Lump sum | Revolving |
| Secured? | Yes (home) | No | No |
| Credit Required | 680+ | 620+ | 600+ |
Access Your Home Equity
Talk to a licensed mortgage broker to find out how much equity you can access and what HELOC rate you qualify for.
HELOC FAQs
How much can I borrow with a HELOC in Canada?
You can borrow up to 65% of your home's appraised value through a HELOC. If combined with a mortgage, the total outstanding cannot exceed 80% of the home's value. For example, on a $750,000 home with a $400,000 mortgage, you could access up to $200,000 via a HELOC.
What is the HELOC interest rate in Canada?
HELOC rates are typically variable and tied to the lender's prime rate plus a spread. In 2026, HELOC rates at major Canadian banks range from prime + 0.5% to prime + 1%. As of early 2026, the Bank of Canada prime rate is approximately 5.2%, so HELOCs are available starting around 5.7%–6.2%.
Can I get a HELOC on a rental property?
Yes, but it is more difficult. Most lenders require a minimum 20% equity (after the HELOC limit) and the rental income must support the additional debt. Rates for investment property HELOCs are typically higher than primary residence HELOCs.
Is HELOC interest tax deductible in Canada?
HELOC interest is only deductible if the borrowed funds are used for income-producing purposes (investing, rental property improvements). Interest used for personal expenses like renovations or vacations is not tax deductible.
What is a readvanceable mortgage?
A readvanceable mortgage combines a traditional mortgage with a HELOC that automatically replenishes as you pay down the principal. As you make mortgage payments, the available credit on the HELOC increases by the same amount — creating a flexible borrowing facility that grows with your equity.