Home Equity Calculator Canada 2026
Find out how much equity you have in your home, your current loan-to-value ratio, and the maximum you can borrow through a HELOC under OSFI's 65% and 80% LTV rules.
Your Home Details
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Enter your home value and mortgage balance to see your equity and HELOC limit.
Home Equity
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HELOC Borrowing Capacity (OSFI B-20)
Current LTV
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Loan-to-value ratio
LTV After Full Draw
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If HELOC fully used
Monthly Interest
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On current HELOC balance
Equity as % of Value
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Ownership stake in home
Home Equity and HELOCs in Canada: 2026 Guide
🏠 What Is Home Equity?
Home equity is the portion of your home's value that you own outright — the difference between what your home is worth and what you still owe on your mortgage. If your home is worth $800,000 and you have $350,000 remaining on your mortgage, you have $450,000 in equity. Equity grows in two ways: as you pay down your mortgage principal, and as your home's market value increases over time. You can access this equity without selling by using a home equity line of credit (HELOC) or by refinancing your mortgage.
📏 The Two OSFI LTV Rules
Under OSFI Guideline B-20, Canadian lenders must apply two simultaneous borrowing limits on HELOCs. Your actual borrowing limit is the lesser of both rules:
Rule A — 65% Cap
The standalone HELOC cannot exceed 65% of your home's appraised value. On an $800,000 home, this means a maximum HELOC of $520,000 — regardless of your mortgage balance.
Rule B — 80% Combined
Your mortgage balance plus the HELOC limit cannot exceed 80% of your home's value. On an $800,000 home with a $400,000 mortgage, this limits the HELOC to $240,000.
🔢 Worked Example: How Much Can You Borrow?
Take a homeowner in Ontario with a home appraised at $850,000 and a remaining mortgage balance of $380,000. Their equity is $470,000 — but how much can they actually access through a HELOC?
Even though this homeowner has $470,000 in equity, they can only access $300,000 through a HELOC — 63.8% of their equity. The remaining equity is inaccessible without selling or refinancing. At a 5.70% HELOC rate, interest on the full $300,000 limit costs $17,100 per year if the limit is fully drawn.
💡 Smart Uses of Home Equity — and Ones to Avoid
A HELOC is one of the lowest-cost borrowing tools available to Canadian homeowners — typically 2–4 percentage points cheaper than a personal loan and 15–20 points cheaper than a credit card. But the low rate comes with your home as collateral, which changes the risk profile significantly. Using equity wisely means using it for things that either increase your net worth or replace far more expensive debt.
Generally sensible: Home renovations that add value (kitchens, bathrooms, additions), debt consolidation replacing credit card debt at 19–22%, investing in income-producing assets (with tax deductibility implications), education or professional development with a clear income return.
Generally risky: Vacations, vehicles, consumer purchases, or investing in volatile assets like individual stocks or cryptocurrency with leveraged home equity. The asymmetry is severe — if the investment drops 30%, you still owe the full HELOC balance secured against your home. The 2008–2009 financial crisis saw many Canadian homeowners who had used HELOCs to invest in equities facing simultaneous drops in home values and portfolio values while still owing the full HELOC balance.
📊 HELOC vs. Mortgage Refinance
| HELOC | Mortgage Refinance | |
|---|---|---|
| Maximum LTV | 65% (standalone) | 80% (one-time) |
| Rate type | Variable (prime +) | Fixed or variable |
| Repayment | Interest-only minimum | Principal + interest |
| Flexibility | Revolving — borrow, repay, re-borrow | One-time lump sum |
| Best for | Ongoing access, flexibility | Large one-time needs, rate certainty |
❓ Frequently Asked Questions
How much can I borrow with a HELOC in Canada?
Under OSFI Guideline B-20, the lesser of: 65% of your home's appraised value, or 80% of your home's value minus your outstanding mortgage balance. For example, on a $700,000 home with a $300,000 mortgage: Rule A gives $455,000, Rule B gives $260,000 — so your HELOC limit is $260,000. Your lender will also assess your income, credit score, and debt service ratios before approving.
Is HELOC interest tax deductible in Canada?
HELOC interest is tax deductible only if the borrowed funds are used to earn income — for example, to invest in stocks, bonds, or a rental property. The CRA's "direct tracing" rule requires a clear link between the HELOC draw and the income-producing investment. Interest on HELOC funds used for personal purposes (renovations to your principal residence, vacations, debt consolidation) is not deductible. Consult a tax professional before claiming HELOC interest as a deduction.
What is the current HELOC interest rate in Canada?
Canadian HELOCs are variable-rate products priced at the lender's prime rate plus a spread. With the Bank of Canada's prime rate at 4.95% in 2026, most major bank HELOCs are priced at 5.45%–5.95% (prime + 0.50% to prime + 1.00%). Your actual rate depends on your credit score, LTV ratio, and lender relationship. Borrowers with strong credit and low LTV can often negotiate below the posted spread.
What is the stress test for a HELOC in Canada?
Yes — the mortgage stress test applies to HELOCs at federally regulated lenders. You must qualify at the higher of your contracted HELOC rate plus 2%, or 5.25%. At a 5.45% HELOC rate, the stress test rate would be 7.45%. Note that for qualification purposes, the HELOC payment is calculated as interest-only on the limit (not just the drawn balance), which affects your TDS ratio calculation.
Can a lender reduce or freeze my HELOC?
Yes — Canadian lenders can reduce, freeze, or cancel a HELOC if your home value drops significantly, your credit score deteriorates, your financial situation changes materially, or the lender's internal credit policies change. This happened to many Canadians during the 2008–2009 financial crisis when home values fell in some markets. A HELOC is a credit facility, not a guaranteed right. This is why financial planners caution against using a HELOC as your primary emergency fund — it can disappear precisely when a crisis makes you need it most.
Does accessing my HELOC affect my credit score?
Opening a HELOC results in a hard credit inquiry, which has a small temporary impact on your score. Using the HELOC affects your credit utilization ratio — drawing heavily on the limit relative to the total limit can lower your score. Making minimum interest-only payments on time helps your payment history. Paying down the balance regularly demonstrates responsible use. Most lenders report HELOC balances to Equifax and TransUnion monthly, so your utilization is visible to future lenders.
What happens to my HELOC when I renew my mortgage?
A readvanceable mortgage (like the CIBC Home Power Plan or RBC Homeline Plan) automatically increases your HELOC limit as you pay down your mortgage principal. Each dollar of mortgage principal paid increases your available HELOC room by one dollar, up to the 65% LTV cap. If your HELOC is a standalone product separate from your mortgage, the renewal of your mortgage typically does not directly affect the HELOC terms — though the lender may reassess the combined LTV position at that point.