# What are the considerations for HELOCs?

> Home Equity Lines of Credit (HELOCs) offer great flexibility, but lenders impose specific lending thresholds.

Category: Purchasing
Last verified: 2026-04-14
Source: https://ratellow.com/faqs/purchasing/what-are-the-considerations-for-helocs

## Answer
Home Equity Lines of Credit (HELOCs) offer great flexibility, but lenders impose specific lending thresholds. FRFIs are required to mitigate associated risks, monitoring borrower's credit quality, and reviewing authorized amounts where the property value declines materially or the borrower's financial situation deteriorates. Think of HELOCs as powerful tools with built-in safety mechanisms.

## Institutional highlights
- HELOC lending limits are typically up to 80% LTV, not 65%.
- There is no regulatory rule that requires principal payments specifically above 65% LTV for HELOCs; lenders may have their own policies but this is not a standard regulatory threshold.
- The riskier your situation, the less you may be able to borrow with a HELOC.
- Your lender will keep an eye on your credit and home value, and may lower your HELOC limit if things change.
- Lenders are focused on managing risk when offering HELOCs.

## Related guide
- https://ratellow.com/guides/self-employed-success-purchasing

## Sources
- Guarantors and co-signors of mortgages — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.3.2
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- Contents — https://www.sagen.ca/ups/underwriting-documentation/#documentation