Find the best HELOC mortgage rate in Canada
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Best Home Equity Line of Credit (HELOC) mortgage rates
As of: September 15, 2025 9:19 p.m.
Rate
Provider
Payment
How do payments work on a HELOC?
A HELOC is a type of revolving debt secured by your home. Rather than having a fixed repayment amount, you can make a minimum monthly payment to cover the interest on what you’ve borrowed. To actually pay down the balance, however, you must make extra payments toward the principal. Unlike some other lending products, HELOCs generally have no pre-payment penalties. This means you can pay off as much as you’d like at any time — beyond your interest — allowing you to reduce your overall debt more quickly if you choose.
What happens if I don’t use my HELOC? Can I cancel it?
Yes, most lenders allow you to cancel an unused HELOC at any time by submitting a written request. However, it’s a good idea to review your lender’s terms and conditions first, as some may charge annual or inactivity fees for keeping the account open. If you're not planning to use the credit, close it to avoid unnecessary costs, just make sure there are no penalties or additional steps required by your lender.
What is the HELOC draw period?
The draw period is the initial phase of your HELOC – usually lasting 5 to 10 years – when you can borrow funds up to your credit limit and are only required to make interest payments. Once the draw period ends, your HELOC enters the repayment phase, where you can no longer withdraw funds and must begin paying back both the principal and interest. Be sure to confirm with your lender the specific draw and repayment details for your HELOC.
Why is my HELOC payment going up?
HELOCs are variable-rate loans, meaning their interest rates are tied to Canada’s prime rate, which moves in response to the Bank of Canada’s overnight lending rate. Between March 2022 and July 2023, the Bank raised its policy rate 10 times, pushing the prime rate as high as 7.2%, which led to steep increases in HELOC borrowing costs.
Since mid-2024, however, the Bank of Canada has shifted course. Between June 2024 and March 2025, it delivered seven consecutive cuts, bringing the overnight rate down to 2.75%. That easing cycle was followed by three consecutive holds. In September 2025, policymakers resumed easing with another 25-basis-point cut, lowering the overnight rate to 2.50%. This has reduced the prime rate to 4.70%, offering borrowers relief compared to 2022–2023 highs — though today’s rates remain well above the ultra-low borrowing costs seen during the pandemic. If your HELOC was opened before 2022, your interest rate is likely still significantly higher than it was when you signed—so even though rates have come down, your monthly payments may still feel elevated compared to what you were used to.
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How do you qualify for a HELOC?
Among the most attractive features of a HELOC loan is that you only have to qualify and be approved for it once. Then, you can use the funds in your HELOC anytime you choose. In order to qualify, you’ll need the following:
- At least 20% equity in your home (or a minimum down payment of 20% if purchasing a house through a re-advancable mortgage)
- You would need a credit score of at least 680 to qualify for the best rates, and at least 600 to qualify at all for a HELOC
- Proof of income, such as recent pay stubs or tax documents (e.g., Notice of Assessment)
- A reasonable debt-to-income (DTI) ratio, generally between 40% and 50%, depending on the lender
- Proof of homeownership, including property details and mortgage information (balance, term, amortization)
You’ll also need to pass a stress test, much like you would when trying to obtain a mortgage. You’ll be stress tested at either the qualifying rate of 5.25% set by the Office of the Superintendent of Financial Institutions (OSFI), or your contract rate + 2%, whichever is higher.
How much can I get on a HELOC?
As per the Office of the Superintendent of Financial Institutions (OSFI), you can borrow up to 65% of your home’s value through a HELOC loan in Canada. However, your combined mortgage and HELOC balance can’t exceed 80% of your home’s total value. To find out how much you could access, calculate 80% of your home’s value, subtract your current mortgage balance to get your maximum HELOC borrowing amount. Lastly, make sure the result doesn’t exceed 65% of your home’s total value.
Let’s look at Henry, who owns a home valued at $600,000 and owes $200,000 on his mortgage.
Calculation
Amount
Maximum lending limit (80% of $600,000)
$480,000
Maximum lending limit (80% of $600,000)
$480,000
Maximum lending limit (80% of $600,000)
$480,000
Maximum lending limit (80% of $600,000)
$480,000
WATCH: July 30, 2025 Bank of Canada announcement
Economic updates that impact HELOC rates in Canada
The Canadian housing market had a slow start to 2025, as tariff concerns and economic uncertainty weighed on buyer confidence. As mortgage rates are now stable after seven rate cuts and three rate holds, home sales picked up slightly in June. Anyone shopping for a mortgage rate in Canada right now should be aware of the economic factors below.
CPI update
Inflation in Canada slowed to 1.7% in July, down from 1.9% in June, according to Statistics Canada. The weaker headline number was driven by lower energy costs, particularly gasoline. Pump prices fell 16.1% year over year, along with the removal of the federal carbon tax in April. StatCan noted that without this policy change, CPI would have been 2.5%. Food costs moved higher after easing in June. Grocery prices rose 3.4% in July compared to 2.8% the month prior, with the sharpest increases in coffee (+28.6%) and confectionery (+11.8%). Shelter costs provided little relief. Rents accelerated to 5.1% year over year, up from 4.7% in June, pushing the shelter index higher by 3% — the first gain since February 2024. Mortgage interest costs, however, continued to cool, slowing to 4.8% in July from 5.6% in June, well below the 30.9% peak recorded last summer. Core inflation pressures remain a concern for policymakers, as both CPI-Trim and CPI-Median held close to 3%. While July’s softer headline number has increased the probability of a rate cut at the September 17 announcement, the Bank is likely to wait for the August inflation report before making its final decision.
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Historical home equity line of credit (HELOC) rates
From 2012 – Today
Types of home equity line of credit (HELOC)
In Canada, you can find two main types of HELOCs – combined and stand-alone – each with its own structure and repayment rules.
1. Home equity line of credit (HELOC) combined with a mortgage
Also known as readvanceable mortgage, this product is offered by most major financial institutions in Canada. It combines a traditional mortgage with a HELOC under a single credit limit. Key features:
- You don’t have fixed repayment amounts on your HELOC; you only have to pay interest on the money you’ve used.
- Your mortgage portion follows a set payment schedule with principal and interest.
- Your HELOC limit can increase over time as your home equity grows (up to 65% of your home’s value)
2. Stand-alone home equity line of credit (HELOC)
A stand-alone HELOC is not tied to your mortgage. It’s a revolving line of credit secured against your home, available even if your mortgage is with a different lender. Key features:
- The credit limit can be up to 65% of your home’s market value
- Unlike a combined HELOC, the credit limit of a stand-alone HELOC doesn’t increase as you pay off the principal of the loan.
What are the pros and cons of a home equity line of credit (HELOC)?
A HELOC can be a smart way to access low-interest credit, but it’s not without risks, especially since your home is used as collateral. Here are the top advantages and disadvantages of a HELOC.
Pros:
- Offers easy access to a large amount of credit.
- Lower interest rates than other types of credit, such as credit cards.
- You only pay interest on the amount that you actually use (not the entire amount available to you).
- You can pay back the entire balance at any time without incurring a pre-payment penalty fee.
- It’s a flexible line of credit with no set repayment schedule.
Cons:
- Requires discipline for repaying the loan. Because there is no set repayment schedule you could find yourself in a lot of debt for a long time.
- A HELOC has a variable interest rate, meaning that it fluctuates along with your lender’s prime rate; should the Bank of Canada choose to raise the target for the overnight rate, your HELOC interest rate will rise accordingly.
- Transferring a HELOC to a different lender, if allowed, involves legal and administrative fees
- Since it’s secured by your home, the lender can take possession if you default and can’t work out a repayment plan.
Should I get a HELOC or a personal loan?
If you’re trying to figure out how to pay for something big, like finishing your basement, covering tuition, or clearing up high-interest debt, you might be torn between a HELOC and a personal loan. Both let you borrow money, but they come with very different rules, risks, and repayment styles.
HELOC
Personal Loan
Loan type
Revolving credit – you can borrow, repay, and borrow again as needed
Lump-sum loan with a fixed repayment term
Loan type
Revolving credit – you can borrow, repay, and borrow again as needed
Lump-sum loan with a fixed repayment term
Loan type
Revolving credit – you can borrow, repay, and borrow again as needed
Lump-sum loan with a fixed repayment term
Loan type
Revolving credit – you can borrow, repay, and borrow again as needed
Lump-sum loan with a fixed repayment term
Loan type
Revolving credit – you can borrow, repay, and borrow again as needed
Lump-sum loan with a fixed repayment term
If you’re still unsure between a HELOC and a personal loan, ask yourself:
- Will I need the funds all at once, or over time?
- Am I comfortable with a variable rate that could rise?
- Do I have enough equity in my home?
- Do I need predictable monthly payments?
A HELOC is ideal if you want flexibility, plan to borrow over time, and have at least 20% home equity. A personal loan may suit you better if you need a fixed lump sum, don’t want to use your home as collateral, or prefer a structured repayment plan.
Who has the best HELOC rates and features?
While interest rates are important, they’re just one part of choosing the right HELOC. Features like minimum borrowing amounts, the ability to convert to a fixed rate, or whether you can hold the HELOC in second position can vary by lender. Use the HELOC rates comparison chart below to see how HELOC products from Canada’s Big Banks stack up. Keep in mind: many other lenders also offer HELOCs, so it’s worth shopping around to find the right fit for your financial needs.
HELOC
Minimum amount
Maximum amount (line of credit portion)
Sub-divide lines
Revolving / re-advanceable balance
Monthly fee
Second position
None
65% market value
No
No
Yes
Yes
No
None
65% market value
No
No
Yes
Yes
No
