Money you can draw when you need it — and not before.
A home equity line of credit is secured against your house, which is why it is priced nothing like a credit card. It is also why the honest version of this page includes what can go wrong with one. Both halves are below.
Five things to know before you sign one.
These are the Financial Consumer Agency of Canada’s published figures and rules, not our estimates — sources at the foot of the page.
Lower than the roughly 80% ceiling that applies to most other ways of borrowing against a home, because the balance revolves — you can draw it back down and take it out again.
HELOC pricing is usually variable, set as your lender's prime rate plus a spread. Your lender may change the rate at any time; a federally regulated one has to tell you in writing within thirty days. Budgeting on today's payment is the mistake to avoid.
Some lenders ask only for the interest, others for interest plus part of the principal. FCAC puts the risk plainly: if you only pay the interest, you will not pay off the loan. A balance can sit there for years looking affordable.
A standalone HELOC is independent of your mortgage and its limit does not grow as you pay the mortgage down. A combined — readvanceable — HELOC is with the same lender as your mortgage, and the credit available to you increases as the mortgage principal falls.
FCAC's thresholds: more than 35% equity for a standalone HELOC, and 20% for one combined with a mortgage.
A line fits pay that arrives unevenly.
Overtime, court time and paid duty do not land in equal monthly amounts. A line you draw only when you need it fits that pattern better than a lump sum you start paying interest on immediately.
Room already arranged is worth more than room you have to apply for during a move. Set it up while you are settled and your employment letter is straightforward.
Work that gets paid for in pieces costs less on a line than on a lump-sum loan, because interest only starts on what you have actually drawn.
Secured against the house, so priced nothing like revolving unsecured credit. The discipline it demands is the other side of that: it is your home standing behind it.
The part most pages leave out.
These are FCAC’s own consumer warnings. A page that sells the upside and omits them is not worth reading.
- If interest rates increase, you may have a hard time repaying it — the rate is not fixed and the payment can move against you.
- If you do not pay back your HELOC, you could lose your home. It is secured against the property, and that is the whole reason the rate is what it is.
- Easy access to the money may tempt you into more debt than you can pay back. FCAC's own suggestion is worth repeating: ask for a lower limit than the maximum you qualify for.
- Paying only the interest keeps the balance exactly where it is. Years can pass without the debt moving.
A line is not always the right shape.
If you need the money once rather than repeatedly, a refinance or a second mortgage may cost less and carry a fixed payment. If your term is ending anyway, the renewal window is usually the cheapest moment to restructure anything.
Straight answers before you sign.
How much can I get on a HELOC?
The Financial Consumer Agency of Canada's figure is up to 65% of your home's value — lower than the roughly 80% that applies across most other ways of borrowing against a home, because a line revolves. You also need equity to start: more than 35% for a standalone HELOC, or 20% for one combined with your mortgage. Those are ceilings, not promises about what a particular lender will approve on your file.
Is a HELOC rate fixed?
Usually not. HELOC pricing is typically variable — your lender's prime rate plus a spread — and your lender may change it at any time, with a federally regulated lender required to notify you in writing within thirty days. That matters more than it sounds: a payment you comfortably afford today is not a payment you are guaranteed tomorrow, so the sensible test is whether it still works if rates move against you.
What's the difference between a standalone and a combined HELOC?
A standalone HELOC is independent of your mortgage — you can hold it with a different lender, and its limit does not change as you pay your mortgage down. A combined, or readvanceable, HELOC sits with the same lender as your mortgage, and the credit available to you grows as the mortgage principal falls. The combined version needs less equity to start (20% rather than more than 35%), but it ties both products to one lender.
Should I take a HELOC or refinance?
It depends on whether you need the money once or repeatedly, and on what your current mortgage looks like. A refinance replaces the whole mortgage and suits a single larger need, especially when the mortgage is due for a rethink anyway. A line suits money that goes out in pieces, and it leaves a first mortgage you like untouched. We price both against your actual mortgage rather than recommending one on principle.
Does my overtime count toward a HELOC?
Same as any officer file: usually yes, when a consistent history is documented, and how much of it counts varies between lenders. That variation moves the limit you are offered, which is exactly why the same pay stub can produce meaningfully different lines of credit at two institutions. Send a recent stub and we will tell you which lines will be counted.
Is a HELOC a good idea?
It is a good tool and a poor habit. Used for something specific with a plan to repay it, the pricing is far better than any unsecured alternative. Left revolving with interest-only payments, the balance does not move and the security behind it is your home. FCAC's own advice is to ask for a lower limit than the maximum you qualify for, and that is advice worth taking.
Find out what you’d actually be offered.
Send your mortgage details and a recent pay stub. We will tell you the limit your file supports, which lenders read officer pay best, and whether a line is genuinely the right shape for what you are doing. Ramin Hallaji takes these calls personally, around shift work.
The limits, thresholds, pricing mechanics and warnings on this page are the Financial Consumer Agency of Canada’s. We have deliberately not reproduced their worked rate example — it illustrates the maths at one moment, and prime moves. How an individual lender reads officer pay is described in general terms only.
- Financial Consumer Agency of Canada — Home equity line of credit — Last updated 15 October 2025
- Financial Consumer Agency of Canada — Borrowing against home equity — Last updated 15 October 2025