If you're a homeowner in Ontario and you’ve built up equity in your home, you might have access to a powerful financial tool that many people don’t even realize they have: a Home Equity Line of Credit, or HELOC for short.

Whether you’re planning a renovation, looking to consolidate debt, or just want some financial breathing room, a HELOC can give you flexible access to the money you’ve already invested in your home. But what is it exactly? How does it work? And how does it compare to a mortgage or home equity loan?

In this guide, we’ll walk through everything you need to know, including how to use a HELOC calculator, how it fits into your broader home equity financing options, and what to watch out for.

What Is a Home Equity Line of Credit?

A Home Equity Line of Credit (HELOC) is a revolving line of credit that uses your home’s equity as collateral. It works a bit like a credit card, but with much lower interest rates because it’s secured by your home.

Once you're approved for a HELOC, the bank or lender gives you a credit limit that you can borrow from at any time. You don’t need to take all the money at once. Instead, you can borrow as much—or as little—as you need, when you need it. You only pay interest on the amount you've actually borrowed, not the full limit.

This makes a HELOC one of the most flexible borrowing options available to homeowners in Canada.

How Does a Home Equity Line of Credit Work?

To get a HELOC, lenders evaluate a few key things: your home's current market value, the balance remaining on your mortgage, your income, and your credit score. Based on these factors, they’ll determine how much equity you can access.

Generally, you can borrow up to 65%–80% of your home’s value, minus your existing mortgage.

For example, imagine your home is valued at $800,000 and you still owe $400,000 on your mortgage. If the lender allows you to borrow up to 80% of your home’s value ($640,000), you may be eligible for a HELOC of up to $240,000 (that’s $640,000 minus your $400,000 mortgage).

Once the HELOC is set up, you can access funds whenever you need them—online, at an ATM, or through your banking app. Minimum monthly payments usually cover just the interest, though you’re allowed to pay off more (or the full balance) at any time without penalty.

Main features of a HELOC include:

It’s a revolving credit line, meaning you can reuse it as you repay.

You only pay interest on the amount you’ve used.

Most HELOCs have variable interest rates tied to the lender’s prime rate.

Your home is used as security, which helps lower the rate—but also adds risk if you don’t repay

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Home Equity Line of Credit vs. Mortgage

One of the biggest points of confusion is how a HELOC differs from a traditional mortgage.

Here’s the key difference: a mortgage is a lump-sum loan you use to buy or refinance a home. You repay it on a set schedule (usually monthly) with fixed payments that include both principal and interest.

A HELOC, on the other hand, is more flexible. It doesn’t give you a lump sum up front. Instead, you get ongoing access to a credit line that you can draw from when needed. You can borrow and repay at your own pace, and you typically only pay interest on what you use.

A traditional mortgage is ideal when you’re buying a home and need structured, predictable payments. A HELOC is better for when you already own a home and want flexible borrowing options for things like renovations, emergencies, or debt consolidation.

In simple terms:

A mortgage is a one-time loan with regular payments and a long-term commitment.

A HELOC is an open line of credit with more freedom and less structure.

Home Equity Loan vs. Line of Credit

It’s easy to confuse a HELOC with a home equity loan—but they function quite differently.

A home equity loan (often called a second mortgage) gives you a one-time lump sum that you repay with regular, fixed payments over a set period. It’s a good option when you know exactly how much money you need up front.

A HELOC, by contrast, gives you access to a credit line that you can dip into as needed. You’re not locked into a specific amount or repayment schedule (beyond the interest). It’s perfect for people who want flexibility and don’t know exactly how much they’ll need or when they’ll need it.

Here’s the difference in plain terms:

A home equity loan gives you a lump sum at a fixed interest rate, with structured monthly payments.

A HELOC gives you ongoing access to funds with interest-only minimum payments and variable rates.

If you’re tackling a one-time project, like a roof replacement or major renovation, a home equity loan might be your best bet. But if your financial needs are ongoing or unpredictable—like funding a small business, paying for tuition, or handling emergencies—a HELOC gives you more flexibility.

Home Equity Line of Credit Payment Calculator

A big advantage of a HELOC is the flexibility—it lets you borrow what you need, when you need it. But that same flexibility can make it hard to predict how much you’ll owe from month to month.

That’s why we recommend starting with the HELOC calculator on 360Lending.ca. It’s a quick, quiz-style tool that helps you figure out two key things:

How much you could borrow based on your home value and mortgage balance

What your payments might look like at different interest rates

Instead of making you guess at the math, the calculator gives you a range of monthly payment estimates depending on how much you draw from your HELOC and what rate you qualify for. This is especially helpful for homeowners comparing debt consolidation options or budgeting for a renovation.

For example, if you’re thinking of borrowing $50,000, the calculator might show how your monthly interest payments could vary at rates like 6%, 7%, or 8%. That way, you can prepare for changes in interest rates and get a clearer picture of how much flexibility your HELOC will give you.

It’s a fast and easy way to explore your options—without committing to anything.

What Can You Use a HELOC For?

The beauty of a HELOC is its flexibility. While technically you can use it for almost anything, it’s best suited for situations where you’re improving your financial health or investing in your property.

Common uses for a home equity line of credit include:

Debt consolidation: Replace high-interest credit cards or personal loans with one lower-rate balance

Home improvements: Upgrade your kitchen, add a bathroom, or improve energy efficiency

Education expenses: Cover tuition, books, or student housing

Emergency funding: Keep funds available for job loss, medical bills, or urgent repairs

Business investment: Use equity to start or grow your own business

That said, just because a HELOC gives you access to cash doesn’t mean you should treat it like free money. Since your home is the collateral, any missed payments can put your property at risk. Use your line of credit wisely, and always have a repayment plan.

Pros and Cons of Using a HELOC to Pay Off Debt

One of the most popular uses for a HELOC is debt consolidation. And for good reason: high-interest credit card debt or personal loans can eat away at your finances, and replacing them with a lower-interest HELOC can dramatically reduce your monthly payments.

Advantages:

Lower interest rates: HELOC rates are often 3–6% lower than credit cards or personal loans.

One simple monthly payment: Consolidate multiple debts into a single balance.

Improved cash flow: Minimum interest-only payments can reduce short-term pressure.

Flexible repayment: You can pay it off on your schedule—or all at once if your situation improves.

Risks to Consider:

Using your home as security: Unlike unsecured debt, a HELOC is secured against your home. Missed payments could lead to default enforcement.

Interest rates can rise: Some HELOCs have variable rates, so your monthly interest cost can increase.

Temptation to re-borrow: Since it’s revolving credit, it’s easy to rack up a balance again if you’re not careful.

Bottom line? A HELOC can be a smart way to reduce debt and improve cash flow—but only if you treat it like a short-term tool and have a clear repayment plan.

How to Apply for a HELOC in Ontario

If you're ready to explore a HELOC, you might be wondering where to start. While some homeowners go directly to their bank, working with a mortgage brokerage like 360Lending gives you access to a wider range of options—and can save you time, money, and hassle.

Unlike banks, which only offer their own HELOC products, mortgage brokers work with multiple lenders across Canada, including major banks, credit unions, and alternative lenders. That means we can compare offers and find the one that best fits your needs and your financial profile.

Here’s what the process typically looks like when applying for a HELOC through a mortgage brokerage:

1. Quick Discovery Call or Online Assessment

We’ll start by learning about your goals: Are you consolidating debt? Renovating your home? Setting up a financial safety net? This helps us figure out whether a HELOC is the right fit—or if another form of home equity financing would serve you better.

From there, we’ll ask for a few basic details, like:

Your current home value (a rough estimate is fine to start)

Mortgage balance

Income and employment status

Credit history

You can do this online or over the phone—whichever is easier for you.

2. Equity and Eligibility Review

Once we have the basic info, we’ll calculate your estimated borrowing power. Using a HELOC calculator, we can quickly estimate how much equity is available and what type of monthly payments to expect.

We'll also assess which lenders are most likely to approve your application based on your credit score, income stability, and loan-to-value ratio (LTV). If you’re self-employed or have less-than-perfect credit, this is where a broker really makes a difference—we know which lenders are flexible and what documentation they'll accept.

3. Application Preparation and Submission

Here’s where we make your life easier.

Instead of applying to multiple lenders yourself (and risking multiple credit checks), we handle the paperwork and submission for you. We’ll gather the required documents and send your application to the lender that offers the best combination of approval likelihood, interest rate, and terms.

Required documents usually include:

Government-issued ID

Proof of income (pay stubs, tax returns, bank statements)

Recent mortgage statement

Property tax bill

Home insurance documents

Credit report (we’ll request this for you)

We’ll also help schedule any appraisals, if required, and walk you through every step.

4. Lender Review and Offer

Once submitted, the lender reviews your file and sends back their offer—this includes your approved credit limit, interest rate, and terms.

We’ll go over the offer together and make sure you understand:

How the rate is determined

Any conditions or fees (e.g., legal or administrative)

Whether the HELOC is standalone or combined with your existing mortgage

You’ll never be pressured into accepting something that doesn’t work for you. If needed, we can also request changes or explore other lenders.

5. Legal Signing and Funding

Once you accept an offer, we’ll coordinate with a lawyer or title company to finalize the documents. This typically involves reviewing the loan agreement and signing the final paperwork.

After closing, the lender sets up your new HELOC account, and you’ll have access to your funds—usually within a few days.

The whole process, from start to finish, can take anywhere from 1 to 3 weeks, depending on how quickly documents are submitted and whether an appraisal is needed.

Other Ways to Access Your Home Equity

A HELOC is just one of several ways to tap into the value of your home. Depending on your financial goals, borrowing preferences, and credit profile, there may be other home equity solutions that better suit your needs.

At 360Lending, we work with dozens of lenders—including major banks, credit unions, and private lenders—to help homeowners explore a variety of options. These include:

Home equity loans (second mortgages):

If you need a lump sum for something like a renovation or large expense—and prefer fixed payments over time—a home equity loan might be a better fit. It’s ideal for borrowers who want predictability or have bruised credit.

Mortgage refinancing:

If your current mortgage is up for renewal or you’re looking to restructure your finances, refinancing may allow you to borrow additional funds at a competitive rate by blending it into a new mortgage.

Combined HELOC and mortgage products:

Some lenders offer products that bundle a traditional mortgage with a HELOC, giving you both structured payments and flexible access to funds. This option may also be easier to qualify for during mortgage renewal.

No matter your situation, we’ll help you weigh the pros and cons of each option and find a solution that aligns with your goals. Whether it’s flexibility, lower payments, or long-term savings, we’ll guide you to the home equity product that makes the most sense for you.

Try Our HELOC Calculator

Curious about how much you could borrow—and what your monthly payments might look like? The HELOC calculator on 360Lending.ca makes it easy to find out.

In just a few quick steps, our quiz-style tool helps you estimate your borrowing power based on your home’s value and mortgage balance. It also shows you what your monthly interest payments could be across a range of interest rates, so you can plan ahead with confidence.

For example, if your home is worth $700,000 and you owe $350,000 on your mortgage, you may be eligible to borrow up to $210,000—depending on lender guidelines and your financial profile. The calculator will walk you through these details and show how your monthly payments might vary at different rates, like 6%, 7%, or 8%.

Whether you’re thinking about consolidating debt or funding a renovation, this is a great first step to understand your options—no commitment required. Try it now and see what your equity can do for you.

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