Estimate your maximum HELOC limit, available credit, and interest-only monthly payment on your draw amount.
Rates as of Q2 2025 (example — HELOC rates are usually variable)
This calculator estimates your maximum Home Equity Line of Credit (HELOC) limit based on your home's value, existing mortgage balance, and a chosen combined loan-to-value (CLTV) limit, along with your available credit and an estimated interest-only payment on the amount you plan to draw.
Your maximum HELOC limit is based on a percentage of your home's value (the CLTV limit) minus your existing mortgage balance — this is the total additional secured credit a lender might extend. Your draw amount is capped at this limit. The estimated payment shown is interest-only, calculated on the amount you've actually drawn, not your full limit — this reflects how HELOCs are commonly structured, with minimum payments covering interest only.
Formula: Maximum HELOC Limit = (Home Value × CLTV %) − Existing Mortgage Balance. Available Credit = Maximum HELOC Limit − Draw Amount. Estimated Interest-Only Payment = Draw Amount × (Annual Rate ÷ 100) ÷ 12. Combined Loan-to-Value (with draw) = (Existing Mortgage Balance + Draw Amount) ÷ Home Value × 100.
Example: A home valued at CA$600,000 with an existing mortgage balance of CA$350,000 and a 65% CLTV limit gives a maximum HELOC limit of CA$40,000. Drawing CA$30,000 leaves CA$10,000 in available credit, brings the combined loan-to-value to about 63.3%, and results in an estimated interest-only payment of about CA$200/month at an 8% interest rate (example — HELOC rates are usually variable and tied to the prime rate). (Note: this example is for illustration purposes only and does not represent a credit offer.)
A Home Equity Line of Credit (HELOC) is revolving credit secured against your home, allowing you to borrow, repay, and re-borrow up to your approved limit as needed — unlike a home equity loan, which provides a one-time lump sum with fixed payments (see our Home Equity Loan Calculator). HELOC interest rates are almost always variable, typically expressed as the prime rate plus or minus a percentage, meaning your payment can change as the Bank of Canada's policy rate (and the prime rate that follows it) changes. A standalone HELOC is generally limited to 65% of your home's value, but if combined with a mortgage in a "readvanceable" mortgage product (where your HELOC limit increases as you pay down your mortgage), the combined limit can reach up to 80% of your home's value. Many HELOCs allow interest-only minimum payments, which keeps required payments low but means the principal balance doesn't decrease unless you choose to pay more — this can make a HELOC feel deceptively affordable while the balance remains outstanding indefinitely. Since 2012, federal guidelines (OSFI's B-20) have restricted standalone HELOCs to a maximum 65% loan-to-value ratio for federally regulated lenders.
A HELOC is revolving credit - you can draw, repay, and redraw funds up to your limit as needed, with payments often interest-only on the drawn amount. A home equity loan provides a one-time lump sum, repaid through fixed regular payments over a set term, similar to a second mortgage. A HELOC suits flexible or ongoing borrowing needs, while a home equity loan suits a known, one-time expense. See our Home Equity Loan Calculator for the latter.
Federal guidelines for federally regulated lenders in Canada (OSFI's B-20 guideline) cap standalone HELOCs at 65% loan-to-value. If your HELOC is part of a "readvanceable" mortgage product, the combined limit (mortgage plus HELOC) can be higher, up to around 80% of your home's value, as your mortgage balance decreases over time.
Many HELOCs allow you to make interest-only minimum payments on the amount you've drawn, meaning your required payment covers only the interest charged that period, with no reduction to the principal balance. This calculator reflects this common minimum payment structure - if you want to pay down your balance, you would need to pay more than this estimated amount.
HELOC interest rates in Canada are almost always variable, typically quoted as the prime rate plus or minus a percentage (e.g., prime + 0.5%). This means your interest-only payment will change whenever the prime rate changes, which follows changes to the Bank of Canada's policy interest rate - unlike many fixed-rate mortgages, where your rate is locked for your term.
Some homeowners use HELOC strategies (such as the "Smith Manoeuvre") to restructure debt, but these strategies are complex, often involve using borrowed funds for investments to potentially make the interest tax-deductible, and carry meaningful risk if investments underperform or rates rise. These strategies should only be considered with guidance from a qualified financial adviser or tax professional familiar with your full situation.
Generally yes - lenders assess your income, existing debts, and credit when approving a HELOC, and federally regulated lenders apply a similar stress test approach to ensure you could afford payments at a higher interest rate than the current rate. Even if your home has substantial equity, your maximum HELOC limit may be constrained by your income and debt levels, not just your home's value.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute a credit offer or financial advice. The default interest rate is a sample value and HELOC rates are variable, typically based on the prime rate, which changes over time. Combined loan-to-value limits, qualification requirements, and product features vary by lender and are subject to regulatory guidelines that may change. Always obtain a personalised quote from a lender and consult a qualified financial adviser before borrowing against your home.