HELOC
Calculator
Calculate your home equity line of credit limit, monthly interest payments, and see how a HELOC compares to refinancing your mortgage.
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Results are estimates for informational purposes only — not financial advice. Always consult a licensed professional before making decisions. Terms of use →
HELOC frequently asked questions
Key rules for home equity lines of credit in Canada.
How much can I borrow with a HELOC in Canada?
Under OSFI rules, you can borrow up to 65% of your home's appraised value through a HELOC. However, your combined mortgage balance plus HELOC cannot exceed 80% of your home's value. So your practical limit is the lower of: (home value × 65%) or (home value × 80% − mortgage balance).
What is the current HELOC interest rate in Canada?
HELOC rates in Canada are variable and tied to the Bank of Canada's prime rate. As of 2026, the prime rate is 4.95%. Most HELOCs are priced at prime + 0.5% to prime + 1%, giving rates of approximately 5.45%–5.95% for qualified borrowers (680+ credit score). Non-prime borrowers face higher rates.
Is a HELOC or refinancing better?
It depends on your situation. A HELOC offers flexibility — you only pay interest on what you draw, and you can repay and re-borrow freely. Refinancing gives you a fixed rate and structured repayment. If you need a lump sum for a specific purpose and rates are favourable, refinancing may be cheaper long-term. If you need flexible access to funds over time, a HELOC is better. This calculator compares both monthly payments for your scenario.
Do I need to pass a stress test for a HELOC?
Yes. You must qualify at the higher of your contract rate + 2% or 5.25% — the same stress test that applies to mortgages at federally regulated lenders.
Is HELOC interest tax deductible in Canada?
If you use the HELOC funds to earn income (e.g., invest in stocks, rental property), the interest may be tax deductible under CRA's "direct tracing" principle. If you use the funds for personal expenses (vacation, renovation), the interest is not deductible. Always consult a tax advisor for your specific situation.
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View all tools →Smart ways to use a HELOC in Canada
A HELOC is one of the most flexible financial tools available to homeowners — used wisely.
Home renovations that increase value, investment portfolio contributions (interest may be tax-deductible), emergency fund backup, bridging a home purchase, or consolidating high-interest debt at a lower rate. The key: have a clear repayment plan.
Vacations, cars, weddings, or everyday expenses. Using your home equity for depreciating or consumable items is dangerous — if home values fall, you could owe more than your home is worth. Variable HELOC rates mean payments rise when the Bank of Canada increases rates.
Under OSFI guidelines, standalone HELOCs are capped at 65% LTV. Combined with your mortgage, total borrowing cannot exceed 80% of your home's value. You must also pass the same stress test as a mortgage applicant — qualifying at max(contract rate + 2%, 5.25%).
CRA's "direct tracing" rule: if you borrow through your HELOC to invest in income-producing assets (stocks, rental property), the interest may be tax-deductible. This is the "Smith Manoeuvre" strategy. If you use it for personal expenses, no deduction. Always consult a tax advisor.