Home equity + HELOC limit
What you can borrow against your home. Canadian HELOCs cap at 65% LTV; refinances cap at 80%. Available limits depend on what's already owed on the first mortgage.
Your scenario
Result
HELOC + first mortgage combined cannot exceed 65% LTV per OSFI guidance. Lenders also impose qualifying-rate stress tests.
Canadian HELOC limits — the 65% cap
OSFI caps Canadian HELOCs at 65% combined loan-to-value (HELOC + any first mortgage). This is a hard rule for federally regulated lenders. Even with substantial equity, your HELOC limit is bounded.
Refinance vs HELOC ceiling
Refinancing a Canadian mortgage caps at 80% LTV. If you need more borrowing capacity than 65%, refinancing your first mortgage upward is the path — not a larger HELOC. This calculator shows both ceilings side by side.
What HELOCs are best for
- Major renovations with strong resale recovery (kitchens, baths, basement suites)
- Investment property down payments (interest is tax-deductible against rental income)
- High-interest debt consolidation
- Bridge financing during a home sale
- Standing emergency credit line (set it up, don't draw)
HELOC rate mechanics
Canadian HELOCs price as prime + a spread, typically prime + 0.5% to prime + 1.5%. Rates move with BoC. Minimum payments are interest-only — meaning balances can persist for years if you don't pay extra principal.
Related
Questions about this calculator
- How much home equity can I borrow against in Canada?
- A HELOC on its own is capped at 65% of the property's value. Combined with your mortgage, total secured borrowing is capped at 80% of value on a readvanceable product. Your available room is that ceiling minus what you already owe.
- What is the difference between a HELOC and a home equity loan?
- A HELOC is revolving credit at a variable rate — draw, repay and redraw, paying interest only on what is outstanding. A home equity loan is a lump sum at a fixed rate with a set repayment schedule. HELOCs are more flexible; loans are more predictable.
- Do I have to qualify for a HELOC?
- Yes, and on the full limit rather than what you intend to draw. Federally regulated lenders apply the stress test, so a large limit you never use still consumes borrowing capacity on any future application.
- Is HELOC interest tax deductible in Canada?
- Only when the borrowed money is used to earn investment or business income, and you have to be able to trace it. Interest on a HELOC used for renovations or personal spending is not deductible. Talk to an accountant before assuming a deduction.