How much equity can I take out of my home?
Usually up to 80% of your home's appraised value, minus everything you owe against it. That cap comes from the Bank Act for uninsured loans. A HELOC's revolving part can be at most 65% of value (OSFI B-20). On a $1,000,000 home with a $400,000 mortgage, that's $400,000 by refinancing or a $400,000 HELOC, before penalties, costs and the income test.
The two limits
- 80% in total. Bank Act s. 418 stops banks lending more than 80% of value on a home without insurance, counting any prior mortgages. FCAC: "You may usually borrow up to 80% of your home's value."
- 65% for a HELOC. OSFI's B-20 caps the revolving (non-amortizing) part at 65% of value; borrowing above that must amortize.
Worked table
| Appraised value | Owing $0 | Owing $200,000 | Owing $400,000 |
|---|---|---|---|
| $500,000 | $400,000 / $325,000 | $200,000 / $200,000 | $0 / $0 |
| $750,000 | $600,000 / $487,500 | $400,000 / $400,000 | $200,000 / $200,000 |
| $1,000,000 | $800,000 / $650,000 | $600,000 / $600,000 | $400,000 / $400,000 |
| $1,500,000 | $1,200,000 / $975,000 | $1,000,000 / $975,000 | $800,000 / $800,000 |
Your income also has to qualify
Lenders test the new payment at the qualifying rate, the greater of your rate plus 2 points or 5.25% (OSFI). At today's 4.58% average new 5-year rate that's 6.58%. A household earning $120,000 with no other debts and $4,800 of property tax qualifies for about $503,942 over 25 years, whatever the home is worth. See the stress test on a refinance.
Penalties and costs
Refinancing mid-term with a fixed rate usually costs the higher of three months' interest or the interest-rate differential. On $400,000 at 5% with three years left and a 4% comparable rate, that's $12,000. Add the appraisal and legal fees (we estimate $1,650).
Refinance or HELOC?
A refinance pays out everything at one rate and amortizes; it can trigger a penalty. A HELOC sits behind your mortgage, avoids the penalty and charges only on what you use, at a variable rate. If you need the money gradually or are mid-term, a HELOC often costs less; if you want a fixed plan to repay, a refinance at renewal is cleaner.
Frequently asked questions
Can I take out more than 80% of my home's value?
Not with a federally regulated lender without mortgage insurance, and insured refinances aren't allowed, except the insured refinance to add housing units (up to 90% of the finished value). Some private lenders go higher at much higher cost.
Do I need an appraisal to take out equity?
Usually. FCAC notes you may need an appraisal; lenders sometimes accept an automated valuation for low loan-to-value requests.
Primary sources
- Justice Laws — Bank Act, s. 418: 80% limit on uninsured residential loans (including refinances) (effective September 1, 2026). Checked .
- OSFI — Guideline B-20: Residential mortgage underwriting (HELOC 65%, appraisals, AVMs) (effective October 31, 2017). Checked .
- Financial Consumer Agency of Canada — Borrowing money using home equity (effective October 15, 2025). Checked .
- OSFI — Minimum qualifying rate for uninsured mortgages (effective January 29, 2026). Checked .
- Financial Consumer Agency of Canada — Reduce mortgage prepayment penalties (effective October 15, 2025). Checked .
- Justice Laws — Eligible Mortgage Loan Regulations (SOR/2012-281), s. 6.1: insured loans to add housing units (effective January 15, 2025). Checked .