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Summary: A home equity line of credit (HELOC) lets Ontario homeowners borrow against their home equity on a revolving basis, usually up to 65% of the home's value on its own, or 80% combined with a mortgage. It is secured by a collateral charge registered on your title, so a lawyer is involved in setting it up and discharging it.
Homeowners reach for a HELOC to fund a renovation, consolidate higher-interest debt, or keep cash on hand, drawing and repaying as they go rather than taking a lump sum. Because it is secured against your home, it carries a lower rate than unsecured credit, but it also puts your property on the line, which is why the paperwork runs through a real estate lawyer.
What is a HELOC?
A home equity line of credit is a revolving loan secured against the equity in your home. You are approved for a credit limit, then borrow, repay, and re-borrow up to that limit, paying interest only on the amount you actually use. Rates are usually variable, tied to your lender's prime rate.
The practical features are what set a HELOC apart from a regular mortgage:
Revolving credit. Draw and repay repeatedly up to your limit, like a credit card secured by your home.
Interest-only minimums. The required payment can be as low as the monthly interest, though paying only that keeps the balance from shrinking.
Variable rate. Most HELOCs float with the lender's prime rate, so payments rise and fall as rates change.
Readvanceable option. Tied to a mortgage with the same lender, your available credit grows as you pay down the mortgage principal.
How much can you borrow with a HELOC in Ontario?
A standalone HELOC can go up to 65% of your home's appraised value. When it is combined with a mortgage, your total borrowing against the home is capped at 80% of its value. These limits come from federal lending rules, not an individual lender's preference.
On a home worth $800,000, a standalone HELOC tops out around $520,000 (65%). If you still owe $400,000 on your mortgage, your total borrowing is capped at $640,000 (80%), leaving roughly $240,000 of HELOC room. Approval also depends on your income, credit, and the mortgage stress test, so the limit is a ceiling, not a guarantee.
Why is a HELOC registered as a collateral charge on title?
A HELOC is secured by a collateral charge registered against your property, which a lawyer registers on title. Unlike a standard mortgage charge registered for a fixed amount, a collateral charge is often registered for more than you borrow, up to 125% of the home's value, and can secure other debts you hold with the same lender.
That structure has trade-offs worth understanding before you sign:
It is flexible. The lender can re-advance funds up to the registered amount without registering a new charge each time.
It can be harder to leave. Many lenders will not take over another lender's collateral charge, so switching at renewal can mean discharging the existing charge and registering a new one, which adds legal cost.
It secures more than the HELOC. Because it can cover all your obligations with that lender, discharging it requires the lender to confirm nothing else is outstanding.
HELOC vs refinancing vs a second mortgage
A HELOC is one of three common ways to tap home equity in Ontario. Which one fits depends on whether you want flexible access, the lowest rate, or a fixed lump sum.
HELOC | Mortgage refinance | Second mortgage | |
How you get the money | Revolving limit, drawn as needed | Lump sum in a new, larger mortgage | Lump sum from a second lender |
Rate | Variable, prime-based | Usually the lowest of the three | Higher than a first mortgage |
Registered as | Collateral charge | Standard or collateral charge | Charge behind your first mortgage |
Best for | Ongoing or uncertain costs | Locking a rate on a large amount | Borrowing when refinancing is not an option |
What does a lawyer do for a HELOC in Ontario?
Because a HELOC is registered on title, a real estate lawyer handles the registration when you set it up and the discharge when you close it or sell. It is the same title work behind any charge on your home, and it is a good reason to think about who you want handling your file.
Review the lender's instructions. The lawyer confirms the credit limit, the amount to be registered, and the terms the lender wants on title.
Confirm your identity and title. They verify you own the property and that title is clear enough to register the charge.
Register the collateral charge. The charge is registered on title electronically through Teraview, the provincial land registration system.
Advise on independent legal advice if needed. If someone on title is not a borrower, the lender may require them to get independent legal advice before signing.
Discharge it later. When you pay out the HELOC or sell the home, the lawyer arranges the discharge of the collateral charge from title.
Registering or discharging a charge carries legal fees plus a registration cost, and a collateral-charge discharge can take extra work because the lender has to confirm no other debts are secured by it.
Frequently asked questions
Is a HELOC the same as a second mortgage?
Not quite. Both are secured against your home alongside or behind your first mortgage, but a HELOC is revolving credit you draw as needed, while a second mortgage is a one-time lump sum with fixed payments.
How much can I borrow on a HELOC in Ontario?
Up to 65% of your home's value on a standalone HELOC, or up to 80% of the value when it is combined with a mortgage. Your income, credit, and the stress test also affect what you are approved for.
Do I need a lawyer to set up a HELOC?
Yes. A HELOC is registered as a charge on your property title, and in Ontario that registration is handled by a lawyer, just like a mortgage.
Does a HELOC make it harder to switch lenders?
It can. HELOCs use collateral charges, and many lenders will not simply take over a collateral charge, so you may need to discharge it and register a new one, which adds legal cost.
What happens to my HELOC when I sell my home?
It has to be paid out and discharged from title on closing. Your lawyer arranges the payout to the lender and registers the discharge as part of the sale.
Can I have a HELOC and a mortgage at the same time?
Yes. Many homeowners do, often as a readvanceable mortgage where the two are combined, but your total borrowing against the home is still capped at 80% of its value.
About the author
Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.
At Ownright, we focus entirely on Ontario residential real estate law. We help homeowners with purchase closings, refinancing, and sales, including registering and discharging the charges behind mortgages and home equity lines of credit, all through a digital platform backed by licensed Ontario lawyers. You can start your closing online or get in touch with any questions.
Legal references: Land Registration Reform Act, R.S.O. 1990, c. L.4 (electronic charge registration through Teraview); Office of the Superintendent of Financial Institutions (OSFI) Guideline B-20 and the 65% loan-to-value limit on home equity lines of credit; Financial Consumer Agency of Canada guidance on home equity lines of credit.
Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.
