A Home Equity Line of Credit is revolving credit secured against your home: borrow, repay and re-borrow up to your limit, paying interest only on what you use. In October 2026, the best advertised HELOC rates in Canada sit at about 4.45% (prime + 0%), while most borrowers pay prime + 0.5% to prime + 1% — roughly 4.95–5.45%.
Big-bank HELOCs are typically prime + 1% or more. Rates are variable and move with prime, so the "rate" you sign is really a spread — and spreads are negotiable.
How much can you borrow?
| Structure | Maximum | Example: $800,000 home, $300,000 mortgage |
|---|---|---|
| Standalone HELOC | 65% of home value | Up to $220,000 ($520,000 − $300,000) |
| HELOC + mortgage combined | 80% total (HELOC portion ≤ 65%) | Up to $340,000 total secured borrowing |
The real costs beyond the rate
- Setup costs ($1,100–$2,700): appraisal, legal fees, title insurance and registration — similar to a refinance.
- Interest-only minimums: most HELOCs require interest-only minimum payments, which keeps payments low but leaves the principal untouched for years.
- Variable-rate risk: the rate moves with prime. A 2-point prime rise on a $100,000 balance adds ~$167/month in interest.
- Re-advanceable structures: many HELOCs automatically increase your available credit as you pay down the mortgage — convenient and dangerous in equal measure.
Smart uses vs. traps
Smart: renovations that build equity, debt consolidation from 19.99% credit cards (if you fix the spending), investment-property down payments, emergency backstop. Traps: vacations and lifestyle spending on 25-year amortized debt, covering regular living expenses, and using it because the minimum payment feels small. HELOC interest is only tax-deductible when borrowed for income-producing purposes — personal-use interest is not.
HELOC vs. refinance: near renewal with a small penalty, refinancing into a lower fixed rate usually wins. With a large prepayment penalty, a HELOC often wins on cost alone despite the higher rate.
Frequently asked questions
What is a good HELOC rate in Canada in 2026?
The best advertised rates are about 4.45% (prime + 0%) as of October 2026; most borrowers pay prime + 0.5% to prime + 1% (~4.95–5.45%). Big banks typically charge prime + 1% or more.
How much can I borrow with a HELOC?
Up to 65% of your home’s appraised value standalone, or 80% combined with your mortgage (HELOC portion capped at 65%), minus existing secured debt.
Is HELOC interest tax deductible in Canada?
Only if borrowed for income-producing purposes like investing or rental property. Interest on money used for personal expenses is not deductible.
Should I get a HELOC or refinance?
Near renewal with a small penalty, refinance usually wins on rate. With a large prepayment penalty, a HELOC often wins on total cost.
Sources and methodology
- WOWA: Best Canada HELOC Rates (October 2026)
- Nesto: HELOC vs. Mortgage in Canada
- RateView: HELOC Rates Canada 2026
This article provides general information for planning purposes, not professional advice or a quote. Cost figures are NorthPeak planning estimates unless a source is named; confirm current prices with licensed local contractors and professionals before making decisions.