Illustrated home-equity projection
Projected property value minus projected secured debt
Canada · CAD
Understand Your Equity in a Canadian Home
Estimate your current ownership stake, possible HELOC availability and room for additional amortizing debt secured by your home.
How a change in home value affects equity
Estimated equity after the proposed borrowing and entered mortgage paydown
| Value change | Property value | Secured debt | Home equity | Equity percentage | Combined LTV |
|---|
Year-by-year scenario
Based on the home-value and principal-paydown assumptions entered above
| Year | Property value | Mortgage and other debt | New borrowing | Total secured debt | Home equity | Combined LTV |
|---|
This calculator provides a planning illustration, not an appraisal, credit decision or lending offer. A lender may apply different valuation, income, credit, stress-test, property and product requirements. Borrowing against a home puts the property at risk if the required payments are not made. Future property values are uncertain, and the projection is not a forecast.
Canadian homeowner guide
Understanding the equity in your home
Home equity represents the difference between a property’s estimated market value and the debt currently secured against it. For example, if a home is valued at $650,000 and the outstanding secured debt is $390,000, the estimated gross equity is approximately $260,000.
Gross equity is not the same as available borrowing room. A lender will apply loan‑to‑value limits, review your income and credit history, assess existing payments and determine whether additional debt is manageable. The lender may also rely on an appraisal that differs from your own estimate.
Why the calculator uses 65% and 80%
Canadian federal guidance distinguishes revolving home‑equity credit from total borrowing secured by a residential property. A HELOC may generally reach up to 65% of the property’s lending value. In some combined mortgage‑and‑HELOC plans, total secured borrowing may extend to 80%, but the portion above 65% must be amortizing and non‑readvanceable.
These percentages serve different purposes. The 65% figure relates to the revolving HELOC component, while the 80% figure concerns the combined secured arrangement. Neither percentage guarantees approval; lenders apply their own underwriting rules.
For consumer information, see the Financial Consumer Agency of Canada’s HELOC guide . Combined loan‑plan treatment at federally regulated institutions is addressed in OSFI’s residential mortgage underwriting guidance .
Standalone HELOC
A standalone HELOC is revolving credit secured against the property. Paying down a separate mortgage does not automatically increase the HELOC limit.
Combined mortgage and HELOC
A readvanceable arrangement may increase available revolving credit as eligible mortgage principal is repaid, but only within the authorized plan limit and subject to lender conditions.
Amortizing secured loan
An amortizing loan provides a fixed amount repaid through scheduled principal‑and‑interest payments. Repaid principal is not automatically available to borrow again.
Reverse mortgage
A reverse mortgage is a separate product generally intended for older homeowners. Its eligibility rules and growing loan balance are not modelled by this calculator.
Gross equity and borrowing room are different
Gross equity is based on the debt you currently owe. Undrawn HELOC credit does not reduce that amount because it has not been borrowed. However, an existing authorized HELOC limit can affect room for additional secured borrowing because lenders may consider total committed exposure.
This calculator therefore asks for both the amount currently drawn and the full HELOC limit. It treats the authorized limit conservatively when illustrating borrowing room. Actual lender treatment may differ.
The home‑value sensitivity table helps test how equity could change if property values fall. Lower value generally means less equity and a higher combined loan‑to‑value ratio, even when the debt balance has not changed. For a focused ratio calculation, use the Canada loan‑to‑value calculator .
Payments, changing rates and borrowing costs
Many HELOCs have variable interest rates. When rates rise, the cost of carrying the same balance increases. Some products allow minimum payments that mainly or entirely cover interest, but payment rules vary by lender.
Paying only interest leaves the principal outstanding. An amortizing loan follows a schedule designed to reduce the balance over time. Which option is suitable depends on the borrowing purpose, rate, repayment flexibility and your ability to handle future payment changes.
Additional expenses may include an appraisal, legal work, registration charges, administration fees or discharge costs. Entering estimated costs helps show how the cash received can be lower than the amount borrowed.
Use future projections as scenarios, not predictions
The projection applies the annual home‑value change and yearly principal reduction entered by the user. It does not calculate the exact amortization schedule of an existing mortgage and cannot predict future property prices.
Try several assumptions instead of relying on one optimistic result. Comparing rising‑value, flat‑value and falling‑value scenarios can provide a clearer picture of how much equity might remain under different conditions.
Canadian home equity questions
My home increased in value. Can I borrow the full increase
Not necessarily. A higher appraised value may increase equity, but lenders still apply loan‑to‑value, income, credit and affordability requirements.
Is an unused HELOC limit the same as home equity
No. Home equity is based on property value and outstanding debt. An unused HELOC limit is available credit, but it may reduce room for additional secured borrowing.
Can the whole 80% secured amount be a revolving HELOC
Generally, no. Under federal guidance, the revolving component is limited to 65% of the property’s lending value. Borrowing above that level, up to the applicable combined limit, should be amortizing and non‑readvanceable.
Why might the lender’s property value differ from mine
Lenders may rely on an appraisal, automated valuation or another approved method. Market changes and differences between comparable properties can produce a value above or below your estimate.
Does making the minimum HELOC payment reduce my balance
It depends on the agreement. If the required payment covers only interest, the principal will not decline unless you make an additional payment.
Could I have substantial equity but still be declined
Yes. Equity is only one part of an application. Lenders also consider income, debt obligations, credit history, stress‑test results, property characteristics and internal lending policies.
What happens to my equity if home prices fall
A decline in property value reduces equity and increases the loan‑to‑value ratio unless the secured debt falls by a similar amount. Severe declines can result in negative equity.