DibzHELOC rates in Canada (2026): prime, limits and risks
HELOC rates in Canada explained: how prime plus a margin works, the 65% and 80% borrowing limits, interest-only payments, risks and a worked cost example.
A home equity line of credit (HELOC) lets you borrow against your home's value as needed, at a variable rate quoted as the lender's prime rate plus a margin. The chartered banks' prime rate was 4.45% on September 30, 2026, so a HELOC priced at prime plus half a point would cost 4.95%, and at prime plus one point 5.45%. You can only borrow up to 65% of your home's value on the revolving line.
Here's how HELOC rates work, how much you can access and what can go wrong.
What a HELOC is
A HELOC is a revolving line of credit secured by your home. Like a credit card, you draw money when you need it, repay it when you can, and draw again. Unlike a mortgage, there's usually no set repayment schedule: the minimum payment is often just the interest.
HELOCs come in two main forms:
- Stand-alone: a line of credit registered against your home, separate from (or instead of) a mortgage.
- Combined with a mortgage (sometimes called a readvanceable mortgage): one registered charge holds both an amortizing mortgage and a revolving line. As you pay down the mortgage, the room on the line can grow.
How HELOC rates are set
HELOC rates float with prime. Each bank sets its own prime rate, which closely tracks the Bank of Canada's policy rate (in recent years, banks' prime has sat 2.2 points above it). When the Bank cuts or raises, prime usually moves the same day or soon after, and so does your HELOC rate.
Series V80691311. HELOC rates are usually quoted as prime plus a margin, so they moved with it.
Source: Bank of Canada (free at bankofcanada.ca)
Show the numbers
| Prime rate | |
|---|---|
| Sep 2024 | 6.5% |
| Oct 2024 | 6% |
| Nov 2024 | 6% |
| Dec 2024 | 5.5% |
| Jan 2025 | 5.5% |
| Feb 2025 | 5.2% |
| Mar 2025 | 5% |
| Apr 2025 | 5% |
| May 2025 | 5% |
| Jun 2025 | 5% |
| Jul 2025 | 5% |
| Aug 2025 | 5% |
| Sep 2025 | 4.7% |
| Oct 2025 | 4.7% |
| Nov 2025 | 4.5% |
| Dec 2025 | 4.5% |
| Jan 2026 | 4.5% |
| Feb 2026 | 4.5% |
| Mar 2026 | 4.5% |
| Apr 2026 | 4.5% |
| May 2026 | 4.5% |
| Jun 2026 | 4.5% |
| Jul 2026 | 4.5% |
| Aug 2026 | 4.5% |
| Sep 2026 | 4.5% |
Prime fell from 6.45% in September 2024 to 4.45% by November 2025 and was unchanged through September 2026. Every HELOC tied to prime fell by the same two points.
The margin above prime depends on the lender, your credit and your overall relationship. As a general range, HELOCs are often priced around prime plus half a point to prime plus one point, sometimes more. The Bank of Canada doesn't publish an average HELOC rate, so we can't show one.
Compare that with variable-rate mortgages, which are typically priced below prime: the Bank of Canada's estimated variable mortgage rate was 3.58% on October 1, 2026. A HELOC costs more because it's open-ended, has no fixed repayment and can't be insured.
How much you can borrow: the 65% and 80% limits
Federally regulated lenders follow OSFI's Guideline B-20, which limits:
- the revolving (HELOC) portion to 65% of your home's value, and
- all borrowing secured by the home, mortgage plus HELOC, to 80% of its value. Anything above 65% has to be on an amortizing loan with regular principal payments.
Here's how that plays out on a $1,000,000 home:
| Existing mortgage | HELOC maximum | Total at 80% |
|---|---|---|
| $0 | $650,000 | $800,000 (the last $150,000 only as an amortizing loan) |
| $100,000 | $650,000 | $800,000 (the last $50,000 only as an amortizing loan) |
| $500,000 | $300,000 | $800,000 |
| $800,000 | $0 | $800,000 |
These are maximums. A lender also checks your income and debts, and will qualify you at a stress-tested rate.
Interest-only payments: convenient and risky
Most HELOCs only require interest each month. On a $100,000 balance at 4.95% (prime plus 0.5), that's about $413 a month. At 5.45% it's about $454. If prime rose by one point, the 4.95% line would cost about $496.
The catch: paying only interest never reduces the debt. Over ten years at 4.95%, you'd pay roughly $49,500 in interest and still owe the full $100,000. Some borrowers set up their own repayment plan, for example matching what a mortgage payment would be.
Risks to understand
- Rate risk. Your rate moves whenever prime does, with no cap.
- Debt that lingers. Without a required principal payment, balances can stay high for years.
- Callable terms. HELOCs are generally demand loans: the lender can reduce your limit or ask for repayment, for example if your home's value or your finances change.
- Your home is the security. Missed payments can ultimately lead to a forced sale.
- Easy access. A large open limit can make it easy to spend equity on things that don't hold value.
HELOCs vs mortgages: penalties and renewal
A HELOC has no term, so there's no renewal date and no prepayment penalty: you can repay any amount at any time. A combined (readvanceable) product may include fixed or variable mortgage segments that do carry the usual term, penalties and renewal rules. For fixed segments, that's typically the greater of three months' interest or the interest rate differential; for variable segments, three months' interest.
Worked example: a $100,000 renovation
Suppose an Ontario owner with a $1,000,000 home and a $400,000 mortgage draws $100,000 for a renovation at prime plus 0.5 (4.95%):
- Interest-only payment: about $413/month
- If prime rises to 5.45%, making the HELOC rate 5.95%: about $496/month
- After 10 years of interest-only payments: about $49,500 paid in interest, $100,000 still owing
Try our mortgage calculator to compare this with adding the amount to an amortizing mortgage.
Related reading
HELOC rates move with prime, like the 5-year variable and 3-year variable mortgages. Lender pages: RBC, TD, BMO, Scotiabank, CIBC, National Bank, Tangerine.
FAQ
What is the HELOC rate in Canada today?
HELOC rates are set by each lender as prime plus a margin. Prime was 4.45% on September 30, 2026, so prime plus 0.5 would be 4.95% and prime plus 1 would be 5.45%. The Bank of Canada doesn't publish an average HELOC rate.
How much can I borrow with a HELOC in Canada?
With federally regulated lenders, the revolving HELOC portion is limited to 65% of your home's value, and total borrowing secured by the home to 80%. Your income and debts also limit how much you'll be approved for.
Are HELOC payments interest-only?
Usually the minimum payment is just the interest, though you can pay more at any time. Paying only interest means the balance never goes down.
Why are HELOC rates higher than variable mortgage rates?
A HELOC is open-ended, has no fixed repayment schedule and can't carry mortgage default insurance, so lenders charge a margin above prime. Variable mortgages are usually priced below prime.
Is there a penalty for paying off a HELOC?
No. A HELOC has no term, so you can repay it at any time without a prepayment penalty. Fixed or variable mortgage segments inside a combined product follow their own penalty rules.
Rates shown are Bank of Canada averages, not offers. Talk to a licensed mortgage professional before choosing a HELOC.
Dibz is a home search app for the Greater Toronto Area, built on the live TRREB MLS® feed. We write these guides from what we see in the market every day and check every rule and number against official sources, listed at the end of each article. Charts marked "Dibz analysis" are calculated from active MLS® listings on the date shown.
Keep reading
3-year variable mortgage rates in Canada (2026): a shorter float
3-year variable mortgage rates in Canada: how prime-based pricing works, how it compares with fixed terms, trigger rates, penalties and a payment example.
5-year variable mortgage rates in Canada (2026): prime, payments, trigger rates
5-year variable mortgage rates in Canada: how prime sets them, fixed vs adjustable payments, trigger rates, penalties and a worked payment example.
1-year fixed mortgage rates in Canada (2026): how they work
How 1-year fixed mortgage rates in Canada are priced, posted vs actual rates from Bank of Canada data, who a 1-year term suits, penalties and a payment example.