HELOC (Home Equity Line of Credit)
A revolving credit line secured against your home's equity, priced as Prime plus a spread — typically 0.50% to 1.00% above Prime.
A Home Equity Line of Credit (HELOC) is a revolving credit facility secured by a registered charge on your home. Unlike a mortgage, you draw only what you need, pay interest only on the drawn balance, and can repay and re-borrow throughout the life of the HELOC. Pricing is Prime plus a spread — typically 0.50% for readvanceable products tied to a mortgage, 0.75–1.00% for standalone HELOCs. OSFI caps HELOC limits at 65% of property value (80% combined with an amortizing mortgage). HELOCs do not amortize — minimum payments are interest-only — which gives them their flexibility but also their systemic risk profile.
Related Terms
A combined mortgage + HELOC product under one collateral charge, where principal paydown on the mortgage automatically increases the HELOC limit.
The base interest rate each Canadian lender charges its most creditworthy customers, typically set about 2.00% above the Bank of Canada Policy Rate.
The ratio of your mortgage balance to the property's appraised value — the key metric for insurance, pricing, and HELOC limits.
A Canadian tax strategy that makes mortgage interest tax-deductible by systematically converting non-deductible mortgage debt into deductible investment loan debt via a readvanceable mortgage.
Related Guides
Related FAQs
- What are the rules around Home Equity Lines of Credit (HELOCs) for you?
- How much equity can I actually borrow with a HELOC?
- How does B-20 affect Home Equity Lines of Credit (HELOCs)?
- QUESTION: How do rising interest rates and HELOCs impact affordability?
- What if my client has a Home Equity Line of Credit (HELOC) combined with their mortgage?