Why is the standalone limit only 65%?

OSFI tightened HELOC underwriting in 2017 because HELOCs (unlike mortgages) don't amortize — borrowers can carry balances indefinitely with interest-only payments. The lower cap reduces systemic risk.

Like a mortgage: lenders check your income (TDS/GDS), credit score, and the property's appraised value. Most prime lenders want 680+ credit and stable income. The stress test applies to HELOCs too.

What's a typical HELOC rate?

Variable, typically prime + 0.50% to + 1.00%. Always higher than your mortgage rate because they're demand-loans, not amortized debt. Expect to pay roughly 1 percentage point above prime.

Is the interest tax-deductible?

In Canada, HELOC interest is deductible if the borrowed funds are used to earn investment income (rental property, dividend-paying stocks, etc.). HELOC used for a vacation or kitchen reno is not deductible. Track the use carefully — CRA does too.

Can I use a HELOC as a down payment for an investment property?

Yes — common strategy. Down payment from a HELOC counts as an own-source down payment for the new mortgage. Be careful: the HELOC payment counts in your TDS for the new property, and rates can rise.

HELOC · Equity

How much can you pull from your home?

Canadian HELOCs are capped at 65% of home value (standalone) and at 80% combined with your mortgage. This calculator shows how much line you can access today and what the monthly interest-only payment looks like.

Assumptions

Home value

Existing mortgage balance

HELOC balance you plan to draw

HELOC rate

Typically prime + 0.50%. Variable.

Results

Available HELOC

$317,000

Home equity$467,000

Max combined lending (80%)$600,000

Max HELOC standalone (65%)$487,500

Monthly interest payment$290/mo

Foncier the whole deal

This number is one of seventy.

Cap rate is a start. The full Foncier analyzer adds DSCR, IRR, ten-year cashflow projections, scenarios, side-by-side compare, and live community rent comps — for free, on your first three deals.

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How this is calculated

Combined lien (mortgage + HELOC) capped at 80% of home value. HELOC alone capped at 65%. Available HELOC = min(80% × value − mortgage, 65% × value), floored at 0. Monthly interest-only payment = balance × rate ÷ 12.

Worked examples

HELOC availability on common scenarios.

Long-time owner · big equity

$317,000 line available

A $750k home with $283k mortgage. Combined limit 80% × 750 = $600k, minus $283k = $317k. Standalone HELOC capped at 65% × 750 = $487.5k, so the binding limit is the $317k combined. Big equity unlocks big lines.

Equity$467k

80% combined$600k

65% standalone$487k

Available$317k

Recent buyer · small line

$30,000 line available

A $550k home with $410k mortgage. Combined limit 80% × 550 = $440k, minus $410k = $30k. Standalone limit much higher (65% × 550 = $357k) but combined caps it. Available only $30k — equity is mostly the bank's.

Equity$140k

80% combined$440k

65% standalone$357k

Available$30k

HELOC questions

About Canadian HELOCs.

Two limits: standalone HELOC ≤ 65% of home value, combined mortgage+HELOC ≤ 80%. Whichever is lower wins. So a recent buyer with a 90% mortgage gets nothing; a long-time owner with 30% LTV mortgage might tap 35% of home value.

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