HELOC Payment Calculator

Calculate payments and interest costs for your Home Equity Line of Credit.

HELOC Details

$

Monthly Payment

$312.50

Payment TypeInterest Only
Total Interest (Year 1)$3,750

Understanding HELOCs in Canada

A Home Equity Line of Credit (HELOC) lets you borrow against your home equity as needed. Think of it like a credit card secured by your home, with much lower interest rates.

How HELOCs Work

  • Credit Limit: Up to 65% of home value minus mortgage (max 80% total debt)
  • Interest Rate: Variable, typically Prime + 0.5% to 1%
  • Minimum Payment: Interest-only monthly
  • Flexibility: Borrow and repay as needed, pay interest only on what you use
  • Access: Online banking, checks, or credit card

HELOC vs Home Equity Loan

HELOC: Revolving credit line, variable rate, interest-only payments, borrow as needed

Home Equity Loan: One-time lump sum, fixed rate, fixed payments including principal, closed loan

Common Uses

  • Home renovations and improvements
  • Debt consolidation at lower rates
  • Emergency fund access
  • Investment opportunities
  • Education expenses

Risks and Considerations

Variable Rates: Payments increase when Prime rate rises

Home as Collateral: Default could result in losing your home

Discipline Required: Easy access can lead to overspending

Interest-Only Trap: You don't reduce principal with minimum payments

Disclaimer

This calculator provides estimates only. Actual HELOC terms, rates, and payments vary by lender. Interest rates are variable and can change. Consult with mortgage professionals before borrowing against home equity.

FAQ

What is a HELOC?

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home equity. You can borrow up to 65% of your home's value minus your mortgage, typically at prime rate plus 0.5-1%.

How do HELOC payments work?

Most HELOCs require interest-only minimum payments monthly. You can pay more to reduce principal. Interest is calculated daily on your outstanding balance at a variable rate.

What's the difference between HELOC and home equity loan?

HELOCs are revolving credit lines with variable rates and interest-only payments. Home equity loans are fixed-amount loans with fixed rates and fixed payments including principal.

How much can I borrow with a HELOC?

In Canada, you can borrow up to 65% of your home's appraised value minus your existing mortgage. Total debt (mortgage + HELOC) cannot exceed 80% of home value.

Are HELOC interest payments tax deductible?

HELOC interest is only tax deductible if you use the funds for income-producing investments. Personal use (renovations, vacations, etc.) is not deductible in Canada.