Set the limit
The lender reviews the property and your ability to repay. Appraisal, legal and registration costs may apply even before you use the line.
Home equity line of credit
Borrow as you need it.
Know how you’ll repay it.
A HELOC is revolving credit secured against your home. You borrow up to an approved limit, pay interest on what you use and can usually borrow again after repayment. The rate is generally variable.
Estimate my HELOC roomFlexible access, real borrowing
The limit is available credit. The balance is debt.
Match the product to the job
HELOC, refinance or second mortgage?
| Option | Useful when | Compare carefully |
|---|---|---|
| HELOC | You need funds in stages and can manage variable payments. | Rate changes, setup costs and a principal repayment plan. |
| Refinance | You need a lump sum and want a scheduled mortgage repayment. | Penalty on the existing mortgage, closing costs and the new amortization. |
| Second mortgage | You want separate borrowing while retaining the first mortgage. | Interest, fees, term length and how the loan will be repaid at maturity. |
Stress-test the plan
What happens when prime changes?
An illustrative $50,000 balance at 6% costs about $250 a month in interest. At 7%, it is about $292. Neither amount reduces the principal.
This is a simple annual-rate illustration divided by 12, not a lender quote. Actual interest depends on daily balances, billing dates and the contract.
Model your own balance →Decide before the first withdrawal
- What is the money for, and what is the maximum you need?
- How much principal will you repay each month?
- Could you afford a higher interest rate?
- What happens if income drops or the home needs to be sold?
Your home secures the debt. Missed payments can put it at risk.
Clear answers
Before you decide
What is a HELOC in Canada?
A HELOC is a home equity line of credit secured against your property. It works like revolving credit: you can draw, repay, and draw again up to the approved limit, while usually paying a variable rate tied to prime on the amount used.
How much equity can I access with a HELOC?
The exact limit depends on the lender, property, current mortgage balance, and borrower profile. In Canada, the HELOC portion is often capped below the full property value, and combined borrowing setups can have separate total loan-to-value rules that need to be modelled carefully.
Are HELOC payments interest-only?
The minimum payment is often interest-only, but that does not mean interest-only is the smartest plan. Strong HELOC use usually includes a principal reduction timeline before the line is opened.
Is a HELOC rate fixed or variable?
Most HELOC rates are variable and move with prime. That flexibility is useful, but it also means you should stress-test the line for higher-rate periods before you rely on it heavily.
When is a HELOC better than refinancing?
A HELOC is often better when the borrowing need is staggered, uncertain, or temporary enough that you should not add the entire amount to long-term mortgage debt immediately. A refinance can be better when the goal is one-time restructuring with a clear amortized repayment path.
Can I use a HELOC for investing or renovations?
Yes, many homeowners use HELOCs for renovations, liquidity reserves, or investing strategies. The key is whether the draw purpose, time horizon, and repayment discipline are strong enough to justify revolving, prime-linked debt.
Rules & references
How we prepare our guidanceSources checked September 6, 2026. Lender approval and product eligibility depend on your complete application.
Pragmatic Mortgage Lending · BC & Alberta
Use equity with a clear purpose.
We’ll compare a line of credit with the alternatives and build the repayment plan into the discussion.