A HELOC — home equity line of credit — is revolving credit secured against the equity in your home. It usually charges prime (about 4.45% in 2026) plus a margin, and you only pay interest on what you draw. See where prime sits today on our live rate tracker.
A HELOC lets you borrow, repay and redraw against your home equity up to an approved limit. A standalone HELOC can reach 65% of your home's value, or up to 80% when combined with a mortgage. Rates are variable (prime + a margin, prime ≈4.45% in 2026), and interest-only payments are common. Your home is the collateral. This is not financial advice.
Unlike a mortgage, which advances a fixed sum you repay on a schedule, a HELOC is revolving — much like a credit card, but secured by your property. Once approved for a limit, you can withdraw funds when you need them, repay them, and draw again without reapplying. You are charged interest only on the outstanding balance, not the full limit. Because the debt is secured by real estate, the interest rate is far lower than an unsecured line of credit or credit card, which is why homeowners use HELOCs for renovations, education, or consolidating higher-interest debt.
Federal rules cap how much equity you can tap. A standalone HELOC can go up to 65% of your home's appraised value. If the HELOC is bundled with a mortgage on the same property, the combined mortgage plus HELOC can reach 80% of the value — meaning you must always keep at least 20% equity. For example, on an illustrative $700,000 home, a standalone HELOC could reach about $455,000, while a combined arrangement could total $560,000 across mortgage and line. Your available room shrinks as your mortgage balance grows and expands as you pay it down or as the home appreciates.
HELOCs carry a variable rate priced as prime plus a margin, commonly prime plus half a point. With prime near 4.45% in 2026, many HELOCs sit around 4.95% or higher. Because the rate tracks the Bank of Canada's overnight rate (2.25%), your interest cost changes after each policy decision — the next one is July 15, 2026. If the Bank cuts, your HELOC gets cheaper; if it hikes, your minimum payment climbs. Watch the trend on our rate history page.
Most HELOCs allow interest-only payments on the balance, which keeps minimums low but leaves the principal untouched unless you deliberately pay it down. That flexibility is a double-edged sword: debt can linger for years. The main risks are that your home is collateral, so default can threaten it; the variable rate can rise with prime; and easy access to credit can encourage overspending. A HELOC is a tool, not free money. Before drawing, model the payment under a higher rate using our mortgage calculators, and compare against a refinance if you want a fixed repayment schedule. Keep an eye on the broader picture too — the inflation rate shapes where borrowing costs head next.
A HELOC (home equity line of credit) is revolving credit secured against the equity in your home. You can draw, repay and redraw funds up to an approved limit, and you only pay interest on the balance you use. Rates are variable, usually prime plus a margin (prime is about 4.45% in 2026).
A standalone HELOC can go up to 65% of your home's value. If it is combined with a mortgage, the total of the mortgage plus the HELOC can reach 80% of the home's value, provided you keep at least 20% equity.
HELOCs are variable and priced as prime plus a margin, often prime plus 0.5%. With prime at about 4.45% in 2026, many HELOCs sit near 4.95% or higher. The rate moves whenever the Bank of Canada changes its overnight rate.
Yes. Most HELOCs let you pay interest only on the outstanding balance, which keeps minimum payments low. The catch is that the principal does not shrink unless you choose to pay more, so the debt can linger for years.
Your home is the collateral, so failing to repay can put it at risk. The variable rate means payments rise when prime rises, interest-only options can trap you in long-term debt, and easy access to credit can encourage overspending.