HELOC Calculator

What the HELOC Calculator does

This calculator sizes a home equity line of credit two ways — standalone at 65% loan-to-value and readvanceable combined with your mortgage at 80% — and then shows what actually drawing on it costs, both today and if prime moves against you.

It also does the thing most lender HELOC calculators skip entirely: it shows what interest-only payments actually cost over a full decade with the balance still sitting there untouched, next to what the same draw would cost if you amortized it instead. That gap is usually the single most useful number on this page.

• Your maximum HELOC limit at 65% standalone or 80% combined readvanceable
• Your HELOC rate at prime plus your spread, and how it compares across three payment structures
• The true 10-year cost of staying interest-only versus amortizing the same draw
• A rate-sensitivity table at prime +1%, +2% and +3% — the real risk on a variable product
• How a readvanceable limit grows automatically as your mortgage principal is repaid

The key variables that move the answer — and how lenders treat them

A HELOC is priced and sized differently from a mortgage, and the two variables below explain almost the entire result.

• HELOC type — standalone lines are capped at 65% loan-to-value on their own, full stop. A readvanceable HELOC bundled with a mortgage can reach 80% combined, but OSFI still caps the revolving HELOC portion within that bundle at 65% of value — the extra 15% has to sit in the amortizing mortgage piece, not the line of credit itself.
• Spread over prime — this is where lenders actually compete, since prime itself is identical everywhere. A thin credit file, high combined LTV or non-traditional income documentation typically pushes the spread up; a strong file at low LTV can see it flat or negative. Ask what spread you are being offered, not just what prime is.
• Repayment approach — interest-only is the default at most lenders and it is also why HELOC balances so rarely shrink on their own. Choosing to pay down a fixed amount of principal each period, or fully amortize, changes almost nothing about qualification but changes everything about whether the balance is ever actually repaid.

How HELOC payments are actually calculated in Canada

This is the detail that trips up the most calculators: HELOCs compound monthly, not semi-annually. A fixed-rate mortgage in Canada is compounded semi-annually by statute, which is why its periodic rate formula is i = (1 + r ÷ 2)^(2 ÷ n) − 1. A HELOC is not a registered mortgage in that sense — it compounds monthly, so its periodic rate is simply the nominal annual rate divided by 12.

Interest-only payment = draw × (rate ÷ 12). An amortizing HELOC payment uses the standard level-payment formula, P × i ÷ (1 − (1 + i)^−N), but with i = rate ÷ 12 rather than the semi-annual conversion — applying the mortgage formula's compounding basis to a HELOC understates the true cost and is one of the most common and most visible errors a mortgage calculator can make.

• HELOC periodic rate: i = rate ÷ 12 (monthly compounding, not semi-annual)
• Interest-only payment: draw × i
• Amortizing payment: draw × i ÷ (1 − (1 + i)^−N)
• Rate = prime + your lender-specific spread, and both float together

What you get from this calculator, and how lenders use these numbers

Every figure here maps to something an underwriter actually checks before approving or increasing a HELOC.

• Maximum HELOC available — the ceiling based on your home value, existing secured debt and the LTV rule that applies to the product type you chose.
• Combined LTV — the number that determines whether you qualify at all, and by how much room is left before hitting 65% or 80%.
• Qualifying basis — most lenders stress-test a HELOC and often qualify it on an amortizing payment rather than the interest-only figure you might actually pay, which is why your approved borrowing capacity can be lower than the interest-only math alone would suggest.
• Rate sensitivity — a HELOC has no rate hold and no fixed term. A move from prime +0 to prime +3 is not hypothetical; it has happened within a single rate cycle before, and this table shows exactly what that does to your payment.

Using your results well

A HELOC costs nothing to have and everything to misuse. Setting one up while you qualify easily — steady income, strong credit, comfortable LTV — and leaving it undrawn is a common and sensible piece of advice, because the interest-only trap only bites once you actually draw on it and let the balance sit.

This calculator deliberately does not give tax advice. Whether HELOC interest is deductible depends entirely on what the borrowed money is used for — funds used to earn investment or business income can qualify for deductibility, funds used for a vacation or a car generally do not, and mixing the two in one line of credit creates a tracing problem that a professional needs to sort out, not a calculator.

• Compare the interest-only and amortizing payments side by side before deciding which one you will actually make
• Check the rate sensitivity table against your own budget, not just today's payment
• If your goal is a specific purpose — renovation, investment, debt consolidation — check the calculator built for that comparison
• Route any question about interest deductibility to your accountant before you draw, not after

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