In short
You can borrow up to 80% of your home's value (refinancing), with the revolving portion of a HELOC capped at 65%. As an example, on a $500,000 home with a $300,000 balance: $100,000 usable. Most frequent use: consolidating $30,000 of cards at 20.99% into a 5% mortgage saves nearly $4,800 of interest a year — penalty and fees to deduct, discipline required. The most profitable moment to refinance: renewal, penalty-free.
The two caps to know: 80% and 65%
Your home gained value while you paid down the loan: the gap between its value and your balance is equity — and federal rules let you borrow part of it without selling. It all fits in two numbers. 80%: the total of your borrowings secured by the home — existing mortgage plus new financing — cannot exceed 80% of its appraised value. 65%: the revolving portion of a HELOC (the part you can draw again at will) caps at 65% of the value; between 65% and 80%, the credit must be amortized in regular instalments.
As an example, on a $500,000 home: a combined ceiling of $400,000, a maximum revolving portion of $325,000. With a $300,000 mortgage balance, usable equity is therefore $100,000 through refinancing. What is usable for you is the ceiling minus your balance — hence the calculator below.
Interactive tool
Your usable equity, in 20 seconds
Enter your home's value and your balance: the calculator returns the possible refinance, the maximum revolving line, and the savings from a consolidation.
Savings = current interest on the debts minus the same amounts at a 5% mortgage rate. Excludes the break penalty and legal/appraisal fees — to be quantified file in hand. For guidance only.
Refinancing or HELOC: two tools, two uses
Refinancing replaces your mortgage with a bigger one: a fixed amount paid out at once, regular payments, generally a lower rate than a line. It is the tool for the defined project — a costed renovation, a debt consolidation, the down payment on an income property. The HELOC is revolving credit secured by the home: draw when you want, pay interest only on what you use — but at a variable rate, often higher than a closed loan, and amortization depends on your discipline. It is the tool for flexibility — staged work, a safety cushion.
The combo: many lenders offer mortgage + line under one umbrella, the line re-expanding as the loan amortizes. Powerful, but to be structured around your goals — not around the branch's house product.
The example that pays: debt consolidation
It is the most frequent use case. Take $30,000 spread across credit cards at 20.99%: about $6,300 of interest a year, before repaying a single dollar of principal. The same $30,000 folded into the mortgage at 5%: $1,500 a year. The gap — nearly $4,800 every year — turns payments that were going nowhere into principal repayment.
Two warnings, always. First, the operation has costs (break penalty, legal fees, appraisal) to deduct from the savings — see the next section. Second, it does not "fix" the debt: it moves it to a decent rate. If the cards fill back up afterward, you have made the problem worse by adding a house as collateral.
What the operation costs — and the right moment to do it
Refinancing mid-term triggers your mortgage's break penalty (three months' interest or the rate differential, depending on the contract), plus appraisal and legal fees (lawyer, or notary in Quebec) — generally $1,500 to $2,500 in total. That is why the most profitable moment to refinance is often renewal: no penalty, and everything renegotiates at once — amount, rate, structure.
A refinance also qualifies as a new loan, stress test included: your income must support the full new balance at the higher rate. Quantifying the net gain — savings minus costs, at the right moment — is exactly the kind of trade-off a good mortgage broker works through with you before touching anything.
Frequently asked questions
How much can I borrow against my home's value?
Up to 80% of its appraised value, minus your current mortgage balance. On a $500,000 home, the combined ceiling is $400,000: with a $300,000 balance, about $100,000 is usable. The revolving portion of a HELOC is capped at 65% of the value.
Refinancing or HELOC: what is the difference?
Refinancing replaces your mortgage with a bigger one: fixed amount, regular payments, usually a lower rate. The HELOC is revolving credit secured by the home: you draw as needed and pay interest only on what you use, but at a variable rate and with the discipline on you. Many files combine both.
Is debt consolidation through refinancing worth it?
Often, yes: $30,000 of cards at 20.99% costs about $6,300 of interest a year; the same $30,000 in a 5% mortgage costs $1,500 — nearly a $4,800 annual gap. But you must count the break penalty, legal and appraisal fees — and above all not run the cards back up afterward.
Is there a stress test on refinancing?
Yes: a refinance is a new loan, qualified at the higher rate (your rate + about 2 points). Your income must support the full new balance. An often-overlooked point when people want to refinance precisely because the budget is tight — hence the value of quantifying the file before committing.
Regulatory caps in force in 2026 — rates and rules evolve: confirm the parameters with a licensed professional.
Go further
Have the net gain quantified before you sign
Savings minus penalty, minus fees, at the right moment: that is a professional's calculation. Payotte verifies only one mortgage broker per sector, on facts.
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