$300k$1.5M$3M
A Home Equity Line of Credit is the smartest piece of paper a Canadian homeowner can sign. Borrow up to 65% of your home's value at Prime + 0.50% (4.95% APR), only pay interest on what you draw, and unlock tax-deductible interest if you invest the proceeds. 4× cheaper than a personal loan. 75% cheaper than a credit card. The best-kept secret in Canadian personal finance.
Same $25,000 borrowed for one year. Watch the interest cost destroy the alternatives.
Drag the sliders. See exactly how much credit your home gives you — at the lowest rate in Canada.
From renovations to retirement strategy — here are the six smartest uses of home equity, with real math.
Interest only on what's drawn — so $5k for the kitchen Monday and $3k for the bathroom next month accrue only on those balances, not on a $15k upfront loan.
Carrying $30k across credit cards at 19.99%? That's $6,000/yr in interest. A HELOC at 4.95% cuts it to $1,485 — a 75% reduction in carrying cost.
The Smith Maneuver: borrow against your home to invest in income-producing assets. CRA lets you deduct the interest. At a 35% marginal rate, $50k drawn saves $866/yr in taxes alone.
A $100k unused HELOC sits at $0 cost — but it's instantly available when the roof leaks or a job ends. Beats keeping six figures parked in low-interest savings.
Pay each semester as it comes due. Federal/provincial student loans now charge 9%+ on the federal portion (post-2023). HELOC at 4.95% beats that by half.
Vacation, wedding, parental leave top-up — when life calls for a one-time cash injection, a HELOC at 4.95% destroys a personal loan at 12.99% on the same amount.
The CRA allows you to deduct HELOC interest if you use the borrowed money to invest. Draw from your HELOC, buy dividend ETFs or income property, and your interest becomes tax deductible — effectively making your HELOC 3.2% APR after tax savings.
Requires direct investment tracking and proper account separation. Consult a fee-only advisor. Returns not guaranteed; investment values can decline. Strategy works best with 10+ year horizon.
All offer Prime + 0.50% or better (except private equity options for non-prime credit).