Compare the Best HELOC Lenders in Canada (2025)

The best Home Equity Line of Credit (HELOC) for you isn't just about finding the lowest interest rate—it's about finding a lender whose approval criteria match your unique financial situation. While major banks offer the most competitive rates, they often have strict rules that many homeowners can’t meet.

This comprehensive guide will help you understand the landscape of HELOCs in Ontario for 2025. We will compare HELOCs from the top major banks vs. alternative B lenders vs. private lenders, including their rates, qualification rules, and unique product features. By the end, you'll have a clear understanding of your options, and know exactly where to go to get a HELOC that fits your needs, whether you have a perfect financial profile or a more complex one.

HELOCs with the Major Banks

Major Canadian banks, such as TD, RBC, Scotiabank, BMO, CIBC, and National Bank, offer the lowest HELOC rates on the market. These rates are typically structured as Prime + 0.50%, which, with a Prime Rate of 4.95% as of August 2025, would put the major banks' HELOC rates around 5.45%. This is a significant advantage over other types of credit.

However, these low rates come with very strict rules. Major banks are risk-averse and only lend to homeowners with a near-perfect financial profile. This means you must have:

A Strong Credit Score: Most major banks require a credit score of 680 or higher to be considered for a HELOC.

Low Debt-to-Income Ratios: Your total monthly debt payments (including your mortgage) must not exceed a certain percentage of your gross income, typically limited to 39% Gross Debt Service (GDS) and 44% Total Debt Service (TDS).

An Existing Mortgage: For the best rates, major banks will typically only offer you a HELOC if you already have, or are willing to switch, your primary mortgage to them. These are not stand-alone HELOCs.

If you meet these stringent requirements, a major bank HELOC is your best option for saving money on interest. To help you choose, let's take a closer look at the two market leaders: TD Home Equity FlexLine and Scotiabank STEP.

TD Home Equity FlexLine: Simplicity and Control

The TD Home Equity FlexLine is a two-part mortgage product designed for clarity and ease of use. It is an excellent choice for a homeowner who wants the flexibility of a HELOC without the complexity of managing multiple accounts.

The FlexLine combines a traditional mortgage with a revolving line of credit. As you pay down the principal on your mortgage, your available line of credit automatically increases by the same amount. This creates a powerful, long-term borrowing tool that grows with your home equity over time.

The Revolving Portion: This is your classic HELOC. It has a variable interest rate and allows you to borrow, repay, and borrow again, up to 65% of your home's value. You only pay interest on the money you use, with the option to make interest-only payments.

The Term Portion: This acts just like a standard fixed-rate mortgage. At any time, you can convert a portion of your FlexLine balance into this term portion, giving you the stability of a fixed interest rate and a predictable payment schedule.

The FlexLine is the ideal solution for the average homeowner. You can access your funds easily through online banking, your TD Access Card (debit card), or at a branch.

Scotiabank STEP: Flexibility and Customization

The Scotiabank STEP (Total Equity Plan) is widely considered one of the most flexible and customizable borrowing products on the market. It is designed for the savvy homeowner or investor who needs a truly all-in-one solution for a complex financial life.

Instead of having just two portions, the STEP acts as a borrowing umbrella. It allows you to combine multiple borrowing products under one large borrowing limit (up to 80% of your home's value). You can have a variable-rate mortgage, multiple fixed-rate mortgage portions with different terms, and even multiple HELOC accounts, all managed under one single plan.

The STEP is perfectly suited for a homeowner with a more complex financial life. This includes real estate investors, self-employed individuals, or anyone who needs to separate their borrowing for different purposes. For example, an investor could use one HELOC for renovations on a rental property and a separate one for tax-deductible investments. The STEP is a core tool for advanced strategies like the "Smith Manoeuvre," as it allows for precise management of each borrowed amount.

The biggest difference is the ability to have multiple distinct sub-accounts. This level of customization allows you to manage different financial goals—whether they're renovations, new purchases, or investments—all from one convenient plan.

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The Alternative Path: A Common and Smart Choice

If a major bank isn't the right fit for your HELOC, you're not alone. This isn't about getting "turned down"; it's about understanding that banks and homeowners often have different realities.

For most Canadian homeowners, the best solution lies on a different, more flexible path.

The Bank's Strict Rules

Major banks operate on a rigid, one-size-fits-all set of rules. They are typically unwilling or unable to make exceptions for:

A Self-Employed Entrepreneur

If your income is variable, or you have not been in business for at least two years, a bank may not approve your application.

The Debt Consolidation Candidate

A bank’s computer may automatically reject your application if your debt-to-income ratio is too high, even if a new HELOC would save you thousands by consolidating debt.

A Homeowner with Bruised Credit

Banks have a hard credit score cutoff. If your score is below 680, an underwriter may not even see your application, regardless of your income or home equity.

The good news is that other lenders are in the business of looking at the bigger picture. They specialize in helping homeowners just like you.

Alternative Lenders: When Major Banks Say No

If you don't meet the major banks' strict requirements or don't want to move your existing mortgage, you have excellent alternatives. Subprime or "B-lenders" and private lenders offer flexible HELOC products, often referred to as "stand-alone" HELOCs, that do not require you to switch your mortgage. While their interest rates are higher, their flexible rules make it possible for many homeowners to get approved.

HELOC Rates for B lenders currently range from 7.49% to 14.99%, depending on your financial situation. Here’s a closer look at some of the most popular options.

Home Trust

Home Trust is often considered the easiest lender to get a HELOC from in Ontario. They are uniquely suited to homeowners with higher debt loads or who have faced past financial challenges. Home Trust is very forgiving with credit, often considering applications with credit scores as low as the mid-500s. They also have the most generous debt ratio allowances, approving borrowers whose debt payments make up as much as 60% of their monthly income. This makes their HELOC product an excellent tool for consolidating high-interest debt. You can access funds via a Visa credit card or cheques, making it very convenient.

First National

First National is another strong alternative lender, offering a good balance of flexibility and competitive features. They will consider borrowers with credit scores starting around 580 and allow debt ratios up to 50% for total debt payments. They provide a Mastercard for accessing your funds, which is a simple and convenient way to make purchases or withdraw cash.

Community Trust

Community Trust is an ideal lender for anyone who needs a quick approval and prefers a more direct way of managing their funds. They are very accommodating to borrowers with bruised credit and are flexible with debt ratios. Their most unique feature is how you access funds: you simply call or email them directly, and they will transfer the funds to your bank account for a quick and easy process. There is no physical credit card or cheques provided.

Private Lenders: For Maximum Flexibility

If you don't qualify with a major bank or a B-lender, private lenders are a final option for a HELOC. Private lenders are typically used as a last resort, but they offer the most flexibility. They can approve HELOCs for homeowners with very low credit scores, high debt, or difficult-to-prove income.

Private HELOCs can generally go up to 75% LTV (Loan-to-Value) in a second-position mortgage, which is a higher limit than most other lenders. HELOC rates for private lenders are similar to the alternative lenders (B lenders), starting from around 9% and going up from there. However, this option provides a lifeline for homeowners who need to access their equity and have exhausted all other possibilities.

The Smartest Way to Choose Your HELOC

With so many options, the most effective way to secure a great HELOC is to work with an experienced mortgage broker.

A broker acts as your professional guide, analyzing your financial situation and connecting you with the right lender. They have access to a wide network of lenders, from major banks to private lenders, and can often secure better rates and terms than you could get on your own. They simplify the entire process, ensuring you get the best possible HELOC for your unique needs.

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