What Is Home Equity?

Home equity = current market value - remaining mortgage balance. A $600,000 home with a $350,000 mortgage has $250,000 in equity. Lenders typically allow you to borrow up to 80% of home value, meaning you can access equity up to 20% above your current mortgage.

HELOC vs Home Equity Loan

• HELOC: Revolving credit, flexible withdrawals, variable rate, best for ongoing access
• Home equity loan: Fixed amount, fixed rate, scheduled payments, best for large one-time needs

HELOC Rates and Limits

Most Canadian lenders charge prime + 0.5% for HELOCs. If prime is 5%, your HELOC rate is 5.5%. You can borrow up to 80% of home value minus existing mortgage debt. Interest on HELOCs is NOT tax-deductible in Canada.