HELOC (Home Equity Line of Credit)
Quick Definition
A revolving credit line secured by your home equity, up to 80% LTV.
Full Explanation
A Home Equity Line of Credit (HELOC) is a revolving credit facility secured against the equity in your home. In Canada, you can borrow up to 65% of your home's appraised value through a standalone HELOC, or up to 80% combined LTV when combining a HELOC with a mortgage. HELOCs typically carry variable interest rates (prime + a spread) and interest-only payment options during the draw period. They are popular for renovations, debt consolidation, or investment. Unlike a mortgage, a HELOC is a revolving facility — you can borrow, repay, and borrow again as needed.
Related Terms
Home Equity
The portion of your home's value you actually own, free of mortgage debt.
Loan-to-Value Ratio (LTV)
The percentage of a property's value financed by a mortgage.
Prime Rate
The base lending rate banks use, tied to the Bank of Canada overnight rate.
Debt Consolidation
Combining multiple debts into a single loan, typically at a lower interest rate.
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