A home equity line of credit lets you borrow against your home as you need it, paying interest only on what you use. BC owners use them for renovations, suites and laneway homes, investment down payments, and as a cushion. It's cheap and flexible money, but it's variable, it's easy to leave outstanding for years, and federal rules limit how much of your equity you can reach.
How much you can borrow
Two federal limits apply at banks and other federally regulated lenders:
- The revolving line itself can be at most 65% of your home's value.
- Your mortgage plus the line together can be at most 80%. Many lenders offer the two as one package, where the line grows as you pay the mortgage down.
On a $1,300,000 home with a $520,000 mortgage, 80% of the value is $1,040,000, so up to $520,000 is available. That's also under the 65% cap of $845,000.
You also have to qualify. Lenders test the line as if it were fully drawn, at the stress test rate, usually amortized over 25 years. Your income and debts decide whether you get the full limit.
What it costs
HELOC rates are variable, usually prime plus 0.5 to 1 point. With prime at 4.45% in late September 2026, that's about 4.95% to 5.45%.
Most lines only require interest each month. On $100,000 at 4.95%, that's about $413 a month, with nothing going to principal. Repaying the same $100,000 over 10 years costs about $1,060 a month.
There are usually small setup costs, such as legal fees and an appraisal, and sometimes an annual fee.
HELOC or refinance?
- A HELOC is better for money you'll use in stages, repay within a few years, or may not need at all: renovations, a suite build, a bridge, an emergency fund.
- A refinance into a fixed mortgage is often better for a large amount you'll carry for years. The rate is fixed, the payment includes principal, and the rate can be lower than prime-plus. It may mean a penalty if you break your current mortgage early, so time it for renewal where you can. See the renewal calculator.
- For a secondary suite or laneway home, CMHC's insured refinance can lend up to 90% of the as-improved value. That's far above the 80% limit, but it must be arranged before building. See the laneway calculator.
Using a HELOC to invest
Interest on money borrowed to earn income, such as a rental property's down payment or non-registered investments, is generally tax-deductible. Interest on money used for personal spending isn't.
Keep investment borrowing in its own line or sub-account, and never mix personal spending into it. Tracing is what CRA looks at.
Risks to manage
- Rates move. Each 1-point rise in prime adds about $83 a month per $100,000 on an interest-only line.
- Lines can be reduced or frozen. The lender can lower an undrawn limit, for example if your home's value falls or your finances change.
- Interest-only can last forever. Set up automatic principal payments.
- It's secured on your home. Treat it as mortgage debt, not a credit card.
Questions people ask us
How much can I borrow on a HELOC in BC?
At federally regulated lenders, the line itself can be up to 65% of your home's value, and your mortgage plus the line together up to 80%. On a $1.3 million home with a $520,000 mortgage, that's up to $520,000, subject to qualifying on your income.
What is the HELOC rate in BC?
HELOC rates are variable, usually prime plus 0.5 to 1 point. With prime at 4.45% in late September 2026, that's roughly 4.95% to 5.45%.
Do I need to pass the stress test for a HELOC?
Yes. Lenders qualify you as if the line were fully drawn, at the higher of the rate plus 2 points or 5.25%, usually amortized over 25 years.
Is HELOC interest tax deductible?
Interest on money borrowed to earn income, such as a rental down payment or non-registered investments, is generally deductible. Interest used for personal spending isn't. Keep investment borrowing separate so it can be traced.
Is a HELOC or refinance better?
A HELOC suits money used in stages or repaid within a few years. A fixed refinance often suits a large amount you'll carry for years, because the rate is fixed and principal is repaid, but breaking a mortgage early can cost a penalty.
Can a bank reduce my HELOC limit?
Yes. The lender can lower or freeze an undrawn limit, for example if your home's value falls or your finances change.
778-918-5990
Using equity for a project?
Dan can connect you with lenders and brokers who price HELOCs, refinances and suite financing side by side. Your numbers come along with the message.
