Active Mortgage · Guide
Home equity lines of credit (HELOCs) in Canada
A home equity line of credit lets you borrow against the equity in your home as you need it, rather than taking a lump sum. Used carefully, it can be a flexible tool. Here's how it works and what to watch for.
How a HELOC works
A HELOC is a revolving line of credit secured by your home. You can draw on it, repay it and draw again, up to your limit. Interest is charged only on what you use, and minimum payments are often interest-only, so the balance doesn't shrink unless you pay it down.
It may stand alone or be combined with your mortgage in a single product, sometimes called a re-advanceable mortgage, where available credit grows as you pay down the mortgage.
How much you can access
Limits depend on your home's value, what you owe, your income and credit. Regulations cap the revolving portion and the combined total of mortgage plus line of credit: [PLACEHOLDER: current HELOC revolving limit and combined loan-to-value limits].
Common uses
Homeowners use HELOCs for renovations, emergencies, consolidating higher-interest debt, or as a down payment source for another property. Some investors use a HELOC for investment purposes; get tax advice before doing so.
Costs and risks
HELOC rates are typically variable and tied to prime. Because it's easy to draw and minimum payments can be low, balances can linger for years. A HELOC is secured by your home, so falling behind has serious consequences. Have a plan to repay what you borrow.
If you need a larger lump sum or want a fixed rate, refinancing may be better. Our brokers can compare a HELOC with a refinance for your situation.
Using a HELOC responsibly
Treat a HELOC like a loan with a plan, not like spare cash. Decide in advance how much you'll draw and how you'll repay it, and consider setting up a regular payment above the minimum. If you're using it to consolidate debt, closing or lowering limits on the cards you've paid off can stop balances from creeping back.
How our brokers can help
Active Mortgage is a team of brokers working with a range of lenders. We can review your situation, explain the options that apply to you and compare real offers side by side. There's no cost to talk with us, and you're never under pressure to proceed.
Common questions
Is a HELOC the same as a second mortgage?
Not necessarily. A HELOC is a revolving line; a second mortgage is usually a lump-sum loan with set payments.
Does a HELOC have a fixed rate?
Usually not; HELOCs are typically variable. Some combined products let you lock portions into fixed terms.
Can I get a HELOC from a different lender than my mortgage?
Sometimes, depending on how your mortgage is registered. A broker can explain your options.
Related tools and services
Ready to talk it through?
Book a free call with our team or start a pre-application when you're ready.