Cash-Out Refinance in Canada (2026): How Much Equity Can You Access?
A cash-out refinance turns home equity into a lump sum at mortgage rates. Here's the 80% rule, how to calculate your accessible equity, what it costs, and when it's worth it.
A cash-out refinance turns home equity into a lump sum at mortgage rates. Here's the 80% rule, how to calculate your accessible equity, what it costs, and when it's worth it.
A cash-out refinance is the workhorse of home-equity borrowing in Canada: replace your mortgage with a bigger one and pocket the difference, all at mortgage rates that beat almost any other form of credit. The first question is always "how much can I take out?" Here's exactly how to figure that — and whether it's the right move.
The short answer
In Canada you can refinance up to 80% of your home's appraised value (new to the process? see how refinancing works). Your accessible equity is 80% of the value minus what you still owe. On a $700,000 home with a $350,000 mortgage, 80% is $560,000, so you could access up to about $210,000 in cash — subject to qualifying on income and the stress test. Run your numbers.
How to calculate your accessible equity
- Estimate your home's value (a lender appraisal sets the official figure).
- Multiply by 80% — that's the maximum total you can owe after refinancing.
- Subtract your current mortgage balance — what's left is your accessible cash.
Example: $900,000 value × 80% = $720,000 max; minus a $500,000 mortgage = $220,000 accessible. The refinance calculator does this for you.
What you can use it for
- Debt consolidation — the most common use; swap 20–30% debt for ~5–6% mortgage debt (debt consolidation).
- Renovations that add value.
- Investing — a down payment on a rental property, for example.
- Major expenses — tuition, a business injection, or an emergency.
What it costs
You'll qualify like a new mortgage (income, credit, stress test) and pay appraisal and legal costs. If you're breaking your current term early, the penalty is the big variable — on a fixed mortgage it can be substantial. Always weigh the penalty against the benefit: see should you break your mortgage to refinance. Refinancing at renewal avoids the penalty entirely.
Cash-out refinance vs. HELOC vs. second mortgage
A refinance gives the largest lump sum at the lowest rate but resets your mortgage. A HELOC offers reusable, flexible access at a variable rate. A second mortgage avoids touching a low first-mortgage rate. Compare all three in how to use your home equity and HELOC vs. second mortgage.
What if you need more than 80%?
Standard refinances stop at 80%. Exceptions exist — the spousal buyout program allows up to 95% for a matrimonial buyout, and private lenders may go to ~85% on an equity basis. Otherwise, 80% is the ceiling.
Frequently asked questions
How much equity can I take out when I refinance in Canada?
Up to 80% of your home's appraised value minus your existing mortgage balance, subject to qualifying on income and the stress test.
Is a cash-out refinance a good idea?
It can be excellent for consolidating high-interest debt or value-adding renovations, because mortgage rates are far below other credit. Weigh any break penalty against the benefit first.
Does a cash-out refinance raise my payments?
Your balance grows, so payments can rise — but extending amortization or consolidating high-interest debt can keep or even lower your total monthly outflow. Model it with the refinance calculator.
Can I do a cash-out refinance with bad credit?
Often yes, through alternative or private lenders that lend against equity rather than score (sometimes up to ~85%). See bad-credit options.
Want to know your number? Talk to us — we'll calculate your accessible equity, check any penalty, and show whether a refinance beats a HELOC or second mortgage for your goal.
Mortgage content produced by Mortgage Squad Advisors' team of FSRA-licensed mortgage advisors and reviewed under the supervision of the brokerage's Principal Broker (FSRA Brokerage #13737) before publication.