Two limits apply. A standalone HELOC can go to 65% of your home’s value. Combined with a mortgage in a readvanceable package, the total reaches 80% — with the mortgage portion making up the difference above 65%.

On a $900,000 home with $400,000 owing: 80% is $720,000, so roughly $320,000 of credit is available in combination, of which up to $585,000 could sit in HELOC form if there were no mortgage at all.

A HELOC is revolving. You are approved once, draw only what you need, and pay interest solely on the balance you use. Rates float with prime, and payments are typically interest-only. Ideal for staged renovations, an emergency buffer, or irregular self-employed income.

A refinance hands you the whole sum at once at a lower, usually fixed rate with a set amortization. Better for a single large need and for anyone who wants the debt on a schedule.

A second mortgage sits behind your first at a higher rate — for situations where breaking the first mortgage would cost more than the second one does.

A HELOC’s minimum payment covers interest and nothing else. At current prime, $100,000 drawn costs a few hundred dollars a month — and after five years of paying it faithfully, you still owe exactly $100,000.

That flexibility is genuinely useful and genuinely dangerous, and which one it turns out to be depends entirely on whether you set your own repayment schedule. Treat the minimum as a floor, not a plan. Rates also move: because HELOCs float with prime, every Bank of Canada change hits your payment directly, unlike a fixed mortgage.

You must pass the stress test on the HELOC limit, not on what you intend to draw — approved for $200,000 means qualifying as though you owe $200,000. Lenders want reasonable credit, provable income, and an appraisal.

Rate is not the only comparison. Check whether it is standalone or readvanceable, whether there is an annual fee, and what happens at renewal of the attached mortgage. A HELOC bundled into a collateral charge can make switching lenders later harder and more expensive — worth knowing before you sign, not after.