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HELOC: home equity line of credit bids

A HELOC (home equity line of credit) is a revolving credit line secured by your home. In Canada a HELOC can be up to 65% of your home's value, and your HELOC plus mortgage can't exceed 80%. You pay interest only on what you use, at a variable rate tied to prime.

Updated October 7, 2026

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Key takeaways
  • HELOC limit: up to 65% of value; combined with your mortgage, up to 80%.
  • HELOC rates are usually prime plus 0.5% to 1%.
  • Payments can be interest-only, so the balance doesn't shrink unless you pay it down.
  • A readvanceable mortgage combines a mortgage and HELOC; the credit grows as you repay.

How does a HELOC work in Canada?

The lender registers a charge on your home and sets a credit limit. You draw by cheque, transfer or card, repay any time and borrow again. Interest is charged monthly on the balance.

How much equity do I need for a HELOC?

At least 20% equity. Your HELOC limit is the lower of 65% of the home's value and 80% of the value minus your mortgage.

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HELOC vs home equity loan vs refinance

Equity options compared
HELOCHome equity loanRefinance
RateVariable (prime +)Fixed or variableLowest, fixed or variable
PaymentsInterest-only possiblePrincipal + interestPrincipal + interest
Re-borrowYesNoNo
Best forOngoing needsOne lump sumLarge amounts at renewal

Is HELOC interest tax deductible?

Only when you use the money to earn taxable investment or business income. Interest on money used for personal spending isn't deductible. Ask a tax professional about your situation.

Frequently asked questions

Can I get a HELOC with bad credit?

Prime lenders usually want 650+. Some alternative lenders offer equity lines with lower scores at higher rates.

What are HELOC requirements in Canada?

At least 20% equity, qualifying income at the stress-test rate, and acceptable credit.

Is a readvanceable mortgage the same as a HELOC?

It's a mortgage with a HELOC attached under one registration; as you pay the mortgage down, the HELOC limit rises.

MBWritten by the MortgageBids.ca editorial team. Last updated October 7, 2026. General information only; your lender confirms terms for your file.
Sources
  1. FCAC: Home equity lines of credit (checked October 7, 2026)
  2. OSFI: Guideline B-20, residential mortgage underwriting (checked October 7, 2026)

Related

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