Home Equity Line of Credit (HELOC) Rates

WOWA® Simply Know Your Options

A Home Equity Line of Credit (HELOC) can help you tap into your home equity with the same flexibility as a typical line of credit or credit card and the low interest rates of a secured loan in Canada. You can borrow from and make payments to a HELOC at any time, and interest rates on HELOCs are typically much lower than other unsecured alternatives. Check out the latest HELOC rates below.

Canada HELOC Rates

Lender	Rate	Rate Basis	Minimum Monthly Payment (Interest-only)
Butler Mortgage	4.45%	Prime + 0.00%	$371
First Ontario	4.85%	Prime + 0.40%	$404
DUCA	4.95%	Prime + 0.50%	$413
Laurentian	4.95%	Prime + 0.50%	$413
Meridian	4.95%	Prime + 0.50%	$413
National Bank	5.45%	Prime + 1.00%	$454
Tangerine	5.95%	Prime + 1.50%	$496

HELOC Credit Limit Calculator

Combined limit = 80% of home value minus your existing mortgage and any other loans secured against the property.
Standalone HELOC limit = up to 65% of home value.

A HELOC gives you a set credit limit that is based on your appraised home value, which will require a home appraisal. Your HELOC limit can also be determined by your existing debt and credit history. You’re able to borrow funds from your HELOC or repay your HELOC at any time. With most HELOC lenders, you can access your HELOC funds at any time through online banking, at a branch, an ATM, or by using a cheque. Some HELOC lenders can also let you use your HELOC through a debit card or Visa access card.

You will only pay interest on the amount that you borrow. This will be through an interest-only minimum payment for your HELOC. However, your HELOC won't be interest-only forever. After a certain period of time has passed, known as your HELOC's draw period in your agreement, you'll have to start repaying the money that you have borrowed.

Both mortgage refinancing and a home equity line of credit (HELOC) gives you access to your equity, but there are differences in when you can borrow, how much you can borrow, and costs associated with borrowing.

After deducting the current balance of your mortgage and other loans secured by your home, a mortgage refinance allows you to borrow up to 80% of the value of your home. Refinancing gives you a one-time lump-sum cash amount that you can then use for purposes such as debt consolidation or for investing. Interest will immediately start to accrue on this full borrowed amount.

A HELOC allows you to borrow up to 65% of the value of your home on its own. If it is a standalone HELOC, your credit limit will not increase even as you make payments towards the mortgage principal if you’re already at this 65% limit. You will also only pay interest on the amount that you use.

A HELOC would be suitable if you’re looking for a flexible borrowing option that lets you access funds and repay at any time, with a low required monthly payment. If you're looking to borrow a larger amount of money, and want to lock-in a fixed interest rate, then a mortgage refinance might be better.

Besides a HELOC on its own, there are alternatives to HELOCs that let you borrow money based on your property's value. This includes home equity loans, reverse mortgages, and readvanceable mortgages.

A HELOC is often bundled with a mortgage, which allows for your credit limit to increase as the mortgage principal is paid down. This is known as a readvanceable mortgage or collateral mortgage. Most major banks offer readvanceable mortgages. Some lenders will automatically readvance your payments, which means that you can automatically re-borrow your mortgage payments, but some lenders require you to request a readvance by contacting them.

HELOCs in a readvanceable mortgage are used for the Smith Maneuver, a strategy that allows you to make your Canadian mortgage interest tax-deductible.

With a home equity loan, you are getting an additional loan on top of your existing mortgage. A Home equity loan is different from a mortgage refinance, since a refinance means that you are borrowing more or changing terms on your original mortgage. Adding a loan on top of your mortgage through a home equity loan is also different from a HELOC, which is a revolving and open loan. A home equity loan is usually closed and has a fixed interest rate.

If you're over the age of 55, a reverse mortgage lets you borrow your home equity with zero interest payments required. Instead, interest is taken out of your home equity. Reverse mortgages offer flexible borrowing options, such as receiving money at regular intervals or as a lump-sum.

The RBC Homeline Plan® is an all-in-one borrowing solution that combines an RBC mortgage with access to a secured line of credit through the RBC Royal Credit Line®. The mortgage portion can be split into fixed-rate and variable-rate segments, giving borrowers more flexibility in how they structure their debt. The credit-line portion has a variable interest rate tied to RBC Prime and provides revolving access to available home equity.

RBC does not publicly advertise a specific current rate or spread for components of the RBC Homeline Plan®. The Royal Credit Line portion rate is variable and tied to RBC Prime.

The BMO Homeowner ReadiLine® is BMO’s combined mortgage and home equity line of credit product. If you have at least 20% equity in your home, or are making a down payment of 20% or more, you may be able to borrow up to 80% of your home’s value through a combination of a mortgage and a line of credit. One feature of the Homeowner ReadiLine® is that the available credit limit may increase as you pay down your mortgage, giving you access to additional home equity, subject to BMO’s lending limits and approval requirements.

The TD Home Equity FlexLine is a HELOC that has two portions: a revolving portion (HELOC) and a term portion (mortgage). The revolving portion of TD's HELOC acts like a regular HELOC that has a variable HELOC interest rate based on TD's Prime Rate. The revolving portion is open, which means that you can make repayments of any amount at any time. The revolving portion is also readvanceable, which means that your HELOC payments will increase your available credit again. You can only borrow up to 65% of your home’s value with the revolving portion.

The term portion of TD's Home Equity FlexLine acts like a mortgage, and allows you to borrow up to 80% of your home’s value. You can't make interest only payments, as the term portion requires regular payments. You can choose between a fixed or variable interest rate and having it be open or closed. Your revolving portion (HELOC) can be converted to a term portion, which allows you to lock in a fixed interest rate.

With an open term portion, you can repay any amount without mortgage prepayment penalties. With a closed term portion, you can only make prepayments of up to 15% every year, or increase your regular term payments by 100%.

TD HELOC rates for the revolving portion is variable based on TD's Prime Rate. The term portion can be closed with a fixed rate for a term of up to 5 years, while a fixed open term can have a 1-year term.

Scotiabank’s Scotia Total Equity Plan (STEP) combines more than just your mortgage with a line of credit. STEP allows you to also link your Scotiabank credit cards, personal loans, and other products to your STEP account. The maximum borrowing limit of Scotiabank's STEP is 80% of the value of your home, and 65% for individual lines of credit.

Scotiabank's STEP has two lines of credit options: the ScotiaLine Personal Line of Credit and the ScotiaLine Personal Line of Credit with Access Card. The ScotiaLine Personal Line of Credit is a secured line of credit that uses the value of your home, unlike unsecured personal lines of credit. If you choose the ScotiaLine without card access, the maximum limit is $1,500,000, or up to 65% of the value of your home.

Scotiabank HELOC Options

If you choose to get a Visa access card, which allows you to make in-store and online purchases directly from your line of credit account, the maximum credit limit is $500,000. In comparison, the unsecured ScotiaLine Personal Line of Credit not under the STEP program or tied to your home has a credit limit of up to $75,000.

Scotiabank's STEP has automatic limit increases, which means that your personal line of credit or STEP credit card will have their credit limit increase as you make mortgage payments, up to a credit limit of 65% of your home's value. The ScotiaLine Personal Line of Credit linked with STEP has a variable HELOC interest rate based on the Scotiabank Prime Rate. It also only requires interest-only minimum payments. This minimum payment can be as low as $50 per month, or your outstanding balance if it is less than $50.

The CIBC Home Power Plan combines a mortgage with a home equity line of credit. With the CIBC Home Power Plan Line of Credit, you can make interest-only payments with a variable interest rate based on the CIBC Prime Rate.

The CIBC Home Power Plan offers automatic rebalancing, which increases your HELOC available credit as you make mortgage payments. However, CIBC's automatic rebalancing can take up to 60 days for your credit limit to increase. CIBC charges a $300 property valuation fee for a home appraisal.

National Bank offers a HELOC only or a HELOC combined with a mortgage loan. Similar to other HELOC lenders, you can borrow up to 65% of your home's value with a HELOC only, and up to 80% with a combined HELOC and mortgage loan.

National Bank's HELOC portion will have a variable HELOC rate based on National Bank's Prime Rate. National Bank also offers a debit card that allows you to access your funds conveniently. If you have a combined HELOC and mortgage loan, your HELOC portion will automatically increase its credit limit when you make mortgage payments that pay down your principal.

The mortgage loan portion of the All-In-One can have either a fixed mortgage rate, variable mortgage rate, or both. National Bank charges a fee of $7 per month.

The Tangerine Home Equity Line of Credit’s main selling point is its low HELOC rate, based on the Tangerine Prime Rate. Tangerine offers a fixed payback plan, which makes it easy for borrowers to repay their HELOC instead of making just interest-only minimum payments.

Tangerine's HELOC does not have automatic rebalancing or credit limit increases when you make mortgage payments. You also won't be able to get a Tangerine HELOC if you already have a mortgage with a different lender, and you won’t be able to get a debit card to access your HELOC funds.

Banks and other federally regulated lenders are subject to mortgage underwriting rules set by the Office of the Superintendent of Financial Institutions (OSFI). For a non-amortizing home equity line of credit (HELOC), the revolving credit portion cannot exceed 65% of the home's value. In other words, to qualify for a standalone HELOC from a bank, you need more than 35% equity in your home.

A higher overall borrowing limit may be available when a HELOC is combined with a traditional amortizing mortgage, such as in a readvanceable mortgage or all-in-one home equity product. In that case, the combined mortgage and HELOC balance is allowed to reach up to 80% of the home's value. However, the HELOC (revolving) portion itself cannot exceed 65% of the home's value. Any debt secured by real estate over 65% of its value must be amortizing.

Credit unions and other provincially regulated lenders are governed by provincial regulators rather than OSFI. Their HELOC rules may differ by province and lender, although many use similar loan-to-value limits and underwriting standards. Borrowers should confirm the applicable HELOC limit, stress-test requirement, and qualification rules directly with the credit union or provincially regulated lender.

You must also pass the mortgage stress test, even if you are applying only for a standalone HELOC from a bank. This means the lender will check whether you can afford the HELOC using a qualifying interest rate that is higher than your actual contract rate. For banks, the qualifying rate is generally the higher of 5.25% or the HELOC contract rate plus 2 percentage points.

Your home's value will usually be confirmed through a home appraisal. The appraisal fee is commonly paid by the borrower and may cost $300 or more, depending on the property and lender. In addition to your home equity, the lender will review your credit score, income, employment situation, existing debts, and debt service ratios.

Some lenders may offer mortgage protection insurance or credit insurance for your HELOC. This insurance is optional. A lender cannot require you to buy credit insurance as a condition of being approved for a HELOC.

A HELOC is also not guaranteed to remain available indefinitely. Because it is a revolving credit product secured by your home, the lender may have the right to reduce your credit limit, freeze further borrowing, or require repayment under certain circumstances. This could happen if you miss payments, breach the terms of your agreement, or if the lender determines that your financial situation or the property value has changed significantly.

Private and alternative lenders more commonly offer home equity loans or second mortgages rather than traditional revolving HELOCs. Their underwriting rules, fees, and repayment terms can differ significantly from those of banks and credit unions.