# How Do HELOCs Work Under Current Regulations?

> Think of a HELOC (Home Equity Line of Credit) as a revolving credit product, secured by your home.

Category: Refinance
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/refinance/how-do-helocs-work-under-current-regulations

## Answer
Think of a HELOC (Home Equity Line of Credit) as a revolving credit product, secured by your home. Unlike fixed mortgages, HELOCs let you borrow, repay, and re-borrow, up to a specific credit limit. But, there are rules! OSFI (Office of the Superintendent of Financial Institutions) regulates HELOCs to manage risk. The non-amortizing portion of a HELOC is capped at a maximum authorized LTV ratio of 65%. Beyond that, borrowing must be structured as an amortizing loan, ensuring the principal is gradually paid down.

## Institutional highlights
- A HELOC lets you borrow money as needed, using your home as security.
- You can typically borrow up to 65% of your home's value with a HELOC.
- If you need to borrow more than 65% of your home's value, you'll need to pay it back with regular payments like a mortgage.
- Lenders keep an eye on your credit and home value when you have a HELOC.
- Your HELOC is managed so you can pay it back completely over time.

## Related guide
- https://ratellow.com/guides/heloc-vs-second-mortgage

## Sources
- LTV Ratio and Loan Type — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017
- Mortgage insurance — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.5.1
- 4.1.11 Exposures secured by residential real estate — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026