HELOC
HELOC interest-only payment calculator.
HELOCs are interest-only on the drawn balance. Variable rate (Prime + margin) — typically 6.20-6.95% today.
Live math · no calculate button| Canadian semi-annual compounding · OSFI B-20| Ontario + Toronto LTT-aware| Same engine our advisors use
Your inputs
Monthly interest
$269
At 6.45% on $50,000
Annual interest$3,225
Daily accrual$9
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Methodology · Canadian-correct
HELOC interest is tax-deductible only when borrowed funds are used to earn investment income. Consult a CPA. Lenders can adjust the margin or revoke a HELOC if equity erodes.
Mortgage glossary— terms that matter for this calculator
How is HELOC interest calculated in Canada?
HELOC interest accrues on the <strong>drawn balance only</strong>, not the limit. Most Canadian HELOCs use simple monthly interest: <code>drawn_balance × annual_rate ÷ 12</code>. So a $50K draw at 6.45% costs about $269/month in interest. Pay any amount above the interest and you reduce principal; the limit stays available.
What's the difference between HELOC and a mortgage?
A mortgage has a fixed amortization with required principal + interest payments. A HELOC is revolving — interest-only minimums, draw and repay any time, and the variable rate moves with Prime. HELOCs are typically 150-300 bps more expensive than a comparable mortgage rate.
How much HELOC can I qualify for?
Up to <strong>65% LTV stand-alone</strong>, or <strong>80% combined</strong> if paired with a first mortgage as a readvanceable product. Example: on a $900K home with a $400K mortgage, you can access up to $320K of HELOC at 80% combined LTV. We negotiate the margin (Prime + 0.50-1.00%).
Are HELOC interest payments tax-deductible?
Generally only if the borrowed funds are used to earn investment income (dividends, interest, rental income, business income). This is the foundation of the Smith Manoeuvre. Strictly track use of funds — consult a CPA for your specific situation.
Can my HELOC limit be reduced?
Yes — Canadian lenders contractually retain the right to reduce or freeze a HELOC if your home equity drops materially or your credit deteriorates. We disclose this risk upfront. Don't rely on a HELOC as your only emergency fund.