Mortgage term
HELOC
Definition
A home equity line of credit — a revolving credit line secured against your home, up to 65% of appraised value combined with your mortgage (max 80% total loan-to-value). Priced at prime + a spread. Interest-only payments allowed.
A HELOC sits behind or alongside your mortgage. It's flexible — draw and repay repeatedly — but variable-rate and typically 1%–2% above prime. Combined mortgage + HELOC products (RBC Homeline, Scotia STEP, TD FlexLine) automatically re-allocate paid-down principal into HELOC room.
At renewal, if your mortgage is bundled into a collateral-charge HELOC product, switching lenders is more expensive because both the mortgage and the HELOC must be discharged.