HELOCs in Canada: New Rules, Best Rates and Who Qualifies

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A home equity line of credit lets you borrow against the part of your home you already own. It is often cheaper than a card or an unsecured loan.

The trade-off is simple: your home is the collateral. This guide covers the federal rules, how banks price a HELOC and the steps to qualify.

Quick answer: In Canada, a HELOC’s revolving part can reach at most 65% of your home’s value, and a HELOC combined with a mortgage can reach 80%, under OSFI’s Guideline B-20. You need at least 20% equity for a combined plan and more than 35% for a standalone HELOC, and you must pass a stress test at a bank. TD, RBC and Scotiabank all price the revolving part as a variable rate based on their prime rate (4.45% at TD and RBC as of September 2026) and quote your spread after you apply.

Updated on September 23, 2026 · Sources: FCAC, OSFI, TD, RBC, Scotiabank

Key takeaways

You pay interest only on what you draw, and most banks allow interest-only payments. That keeps payments low but never clears the debt.
The rate is variable. When prime rises, your cost rises the same day.
Big banks don’t publish their HELOC spread. You learn it only after a credit review and appraisal.
If you don’t repay, the lender can take your home. FCAC lists this as the main risk.

The rules at a glance

Rule	What it means	Source
Revolving limit	Up to 65% of home value	OSFI B-20
Combined with mortgage	Up to 80% of home value	FCAC
Minimum equity	20% combined; over 35% standalone	FCAC
Stress test	Qualify at a higher rate	FCAC / OSFI

Rules as published by FCAC and OSFI, checked September 23, 2026.

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How to get a HELOC, step by step

Step 1. Work out your available equity

Equity is your home’s value minus what you owe on it. FCAC’s example: a $500,000 home with $200,000 left on the mortgage has $300,000 in equity, or 60%. At an 80% combined limit, total borrowing could reach $400,000, so up to $200,000 of new credit, subject to the 65% cap on the revolving part.

Step 2. Choose standalone or combined

A standalone HELOC is separate from your mortgage and can sit at a different lender. A combined plan, sometimes called a readvanceable mortgage, sits with your mortgage lender: as you pay down principal, your available credit grows. TD’s Home Equity FlexLine, the RBC Homeline Plan and the Scotia Total Equity Plan are all combined products.

Step 3. Check your credit and debt load

Pull both credit reports and fix errors first. Lenders look at your score, income and total debt payments. If card balances are the reason you want a HELOC, list them with their rates; our debt consolidation guide shows how to compare options.

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Step 4. Pass the stress test

FCAC says you must pass a stress test to qualify for a HELOC at a bank. For uninsured lending at federally regulated lenders, OSFI’s minimum qualifying rate is the greater of your contract rate plus 2% or 5.25%.

Step 5. Get an appraisal and legal registration

Expect to show proof of ownership and your mortgage details, get an appraisal, and use a lawyer (or a notary in Québec) to register the charge on your home. Ask each lender who pays these costs.

Step 6. Negotiate the spread and set a limit

Ask for the rate as “prime plus X” in writing. Then ask for a lower limit than you are offered. FCAC notes a bigger limit can tempt you to overspend.

What has changed in the rules

Appropriate products: under the federal consumer protection framework in the Bank Act, banks must offer products that are appropriate for you and tell you if one isn’t.
Switching at renewal: since November 21, 2024, OSFI no longer prescribes the stress test for an uninsured straight switch. OSFI’s wording covers a stand-alone mortgage, so ask how your lender treats a plan bundled with a HELOC.
Loan-to-income limits: since fiscal Q1 2025, OSFI limits how much high loan-to-income lending sits in each bank’s uninsured mortgage portfolio. It applies to portfolios, not to individual borrowers.

Common mistakes

Paying interest only for years. The balance never shrinks.
Using the line for everyday spending. FCAC suggests a clear goal, like repairs or education.
Ignoring rate risk. A one-point rise in prime adds $1,000 a year on a $100,000 balance.
Replacing a fixed mortgage early without checking the prepayment charge.

Tools and offers that help

1. TD Home Equity FlexLine

Revolving portion: variable rate based on the TD Prime Rate (4.45%); minimum payment is interest only.
Term portion: fixed or variable, with regular principal and interest; lets you reach up to 80% of your home’s value.
Offer: up to $5,100 cashback with a new FlexLine that includes a term portion, until December 29, 2026, conditions apply.

Mix a revolving line and fixed-rate term portions.
No published spread over prime.

2. RBC Homeline Plan

Structure: an RBC mortgage plus a Royal Credit Line in one plan.
Limits: borrow up to 80% of your home’s value; the credit line can reach 65% of the appraised value.
Payments: interest-only allowed; repay the line any time with no prepayment charges. The line’s rate moves with RBC’s prime.

Available credit grows as you pay the mortgage down.
Rate not published; minimum payment is interest, fees and any insurance premium.

3. Scotia Total Equity Plan (STEP)

Structure: one application links a mortgage and a ScotiaLine Personal Line of Credit to your equity; up to 3 mortgage components.
Line sizes: ScotiaLine $100,000 to $1,500,000, or $10,000 to $500,000 with an access card.
Cap: revolving credit under STEP stops at 65% of the home’s value.

Split the mortgage between fixed and variable terms.
No published line rate; adding products may need a new application.

If you only need a smaller amount, a low-interest or balance transfer card avoids putting your home on the line. A mortgage rate comparison helps you judge whether a refinance beats a line.

Checklist before you sign

Equity above 20% (combined) or 35% (standalone).
Rate written as prime plus a spread.
Appraisal, legal and discharge fees listed.
A repayment plan with principal, not just interest.
A credit limit you actually need.

How we compared these options

Checked: each bank’s official product page, FCAC and OSFI, on September 23, 2026.
Order: no ranking; banks appear alphabetically. The Quick answer summarizes the rules that apply to all three.
Criteria: structure, limits, payment rules, published pricing and current offers.
Independence: no bank paid for placement.

Not financial advice. Rates and terms checked on September 23, 2026 with each provider’s official page; confirm before applying.

FAQ

What is the maximum I can borrow with a HELOC in Canada?

Up to 65% of your home’s value on the revolving part, and up to 80% in total when combined with a mortgage.

Are HELOC rates fixed or variable?

The revolving part is variable and tied to prime. Combined plans let you lock part of the balance in a fixed-rate term.

Can I get a HELOC with bad credit?

It is harder, because banks check credit and apply a stress test. Watch for lenders offering home-equity loans without a proper review; our fraud and scams guide lists warning signs.

Can a credit union be cheaper?

Sometimes. Some credit unions publish their line rates, which makes comparing easier.

For the full picture, see our hub Best Personal Loans in Canada 2026, our comparison of the best personal loans in Canada and our guide to loans for bad credit in Canada.

Sources

Ieveera SEO is an independent publisher, not a bank or financial advisor; content is for information only and may include paid affiliate links that never affect our rankings — always confirm current rates and terms with the provider. Rates shown in CAD; verify with the issuer.