# What is the 'Right of Offset' and why does it matter for renewals?

> Collateral charges often include a clause giving the lender the right to use home equity to cover defaults on other products (HELOCs, credit cards, car loans).

Category: Renewal
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/renewal/what-is-the-right-of-offset-and-why-does-it-matter-for-renewals

## Answer
| Feature | Standard Charge | Collateral Charge |
|---------|-----------------|-------------------|
| Switch Ease | High (Assumable) | Low (Legal required) |
| Equity Access| Requires refinance | Self-advancing |
| Offset Risk | Mortgage Only | All lender debts |

## Related guide
- https://ratellow.com/guides/transferring-collateral-charge

## Sources
- Final Capital Adequacy Requirements Guideline (2026) — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-2026-chapter-4-credit-risk-standardized-approach
- BANKOFCANADA — https://www.bankofcanada.ca/2025/07/staff-analytical-note-2025-21/#Introduction
- OSFI-BSIF — https://www.osfi-bsif.gc.ca/en/news/backgrounder-final-capital-adequacy-requirements-guideline-2026