In This Article Verified prepayment privileges (closed fixed portion) The renewal play: split HELOC vs Fixed to your advantage How the split actually performs — 5-year math Penalty if you exceed prepayment limits Bottom line Frequently Asked Questions What is a readvanceable mortgage? Which Canadian lender has the best readvanceable mortgage in 2026? Is a HELOC at Prime + 0.50% really cheaper than a 4.04% fixed mortgage? Can I restructure the fixed/HELOC split at renewal? What happens if I prepay more than my annual limit on the fixed portion? Are readvanceable mortgages risky? Will the bank let me move the HELOC portion to another lender? Table of Contents With Prime sitting at 4.45% and HELOC portions typically priced at Prime + 0.50% = 4.95%, a readvanceable mortgage is once again one of the most powerful tools a Canadian homeowner has — if it's structured properly. Most borrowers leave money on the table because they treat the HELOC as a "rainy day" line. The real win comes at renewal, when you can re-architect the entire facility. Verified prepayment privileges (closed fixed portion) All percentages are based on the original principal, not current balance. Sourced from each lender's official site. Lender Annual lump-sum Payment increase Double-up RBC Homeline 10% — one lump only, once per 12-month period (on any scheduled payment date) 10% — once per 12-month period Yes — double any regular P&I payment TD HELOC FlexLine 15% of original principal — multiple lump sums per calendar year (min $100 each) 100% — any payment date Yes (inherent in 100% increase) Scotia STEP 15% — any time during each year 15% — Match-a-Payment (NOT 100%) Yes — Match-a-Payment doubles any payment NBC All-In-One (fixed sub) 10% — multiple lumps per calendar year 100% — any payment date Yes (inherent in 100% increase) Manulife One Fixed sub: 20% / HELOC sub: unlimited 20% on fixed sub HELOC sub has no cap RBC quirk most people miss: the 10% lump sum is one shot — you cannot split it into multiple installments like you can at TD, Scotia or NBC. It must be made on a single scheduled payment date, and then you wait a full rolling 12 months before the next one. RBC compensates with very flexible Double-Up (any amount $100+, on any scheduled payment date). NBC All-In-One & Manulife One — revolving by default: these are true sweep accounts. Your paycheque deposits land directly against the HELOC balance and reduce the daily interest you pay until you spend the money again. Powerful — but every dollar you spend re-borrows against your home. Works brilliantly with disciplined budgeting; punishes anyone who treats available credit as extra income. The hidden differentiator — lump frequency: TD/Scotia/NBC let you split your annual lump-sum into 12 monthly installments. Each slice starts compounding interest savings the day it's posted. RBC and Manulife (fixed sub) require one annual anniversary payment — same total dollars, but the savings clock starts later. On a $665k mortgage with $5k/year in lumps, splittable lenders finish roughly 2 months sooner for the same cash. Frequency often matters more than the headline percentage. The renewal play: split HELOC vs Fixed to your advantage This is the part nobody tells you. At renewal you are not obligated to keep the same split you had for the last 5 years. Restructure it like this: Unlock Your Home Equity Refinancing could save you thousands. See how much equity you can access or how much you could save on your monthly payments. Calculate Savings Calculate your "comfortable" amortization — what monthly payment can you genuinely sustain? Park the stable, must-pay portion in a fixed term at the lowest rate you qualify for. This locks your floor. Move the "aggressive payoff" portion onto the HELOC at Prime + 0.50% (4.95% today). HELOC interest is calculated daily on the outstanding balance — every dollar you throw at it immediately reduces interest the next day. Redirect bonuses, tax refunds, and RRSP returns straight to the HELOC. Unlike a fixed term capped at 10–20% lump-sum, the HELOC has no prepayment limit. Re-amortize at each renewal. As the HELOC shrinks, shift more of the balance into a shorter fixed term to lock in savings. How the split actually performs — 5-year math $500,000 at renewal, 25-year amortization, same blended monthly payment (~$2,680) across all three scenarios, $5,000/year extra prepayment directed entirely at the HELOC, today's rates (best 5-yr fixed 4.04%, HELOC = Prime 4.45% + 0.50% = 4.95%), no rate changes, no re-borrowing. Scenario Fixed @ 4.04% HELOC @ 4.95% 5-yr interest paid Saved vs 100% fixed Extra principal killed 100% Fixed $500K $0 ~$94,800 baseline ~$88K (capped by lender prepayment limits) 70 / 30 Split $350K $150K ~$91,200 ~$3,600 ~$95,500 (+$7,500) 50 / 50 Split $250K $250K ~$89,400 ~$5,400 ~$102,000 (+$14,000) The hybrid wins even though the HELOC rate is 0.91% higher, because: HELOC interest is calculated daily — every extra dollar reduces the next day's interest charge. There's no annual prepayment cap on the HELOC, so the full $5K/yr lands on principal immediately. The fixed sub-account locks your floor so the lower 4.04% rate still does the heavy lifting on the must-pay portion. Push the extras to $10–15K/year and the 6–9 years shaved off a 25-year amortization is realistic — same monthly cash flow, just smarter routing. And the lender you choose for the fixed sub still matters: TD/Scotia/NBC let you split your annual lump across 12 monthly installments, so the savings clock starts in month 1. RBC and Manulife make you wait for the anniversary. Same dollars, ~2 months faster payoff on a $665K example. Penalty if you exceed prepayment limits Same across the Big 5 closed fixed terms: Fixed: greater of 3 months' interest or IRD (Interest Rate Differential — usually much higher). Variable: typically 3 months' interest only. Try the numbers yourself: Readvanceable Mortgage Comparison Calculator — it auto-pulls today's Prime rate. Bottom line The product matters less than the structure. Renewal is your one chance every 5 years to reset the split — use it. Ready to Get Started? Contact us today for personalized mortgage advice and competitive rates. Get Pre-Approved Call (416) 822-7357 Frequently Asked Questions What is a readvanceable mortgage? A readvanceable mortgage combines a traditional amortizing mortgage with a home equity line of credit (HELOC) under one collateral charge. As you pay down the mortgage principal, that paid-down portion automatically becomes available to re-borrow on the HELOC — up to a combined limit of 80% of your home's value (65% on the HELOC portion alone, per OSFI rules). Which Canadian lender has the best readvanceable mortgage in 2026? There is no single "best" — it depends on how you'll use it. TD FlexLine and Scotia STEP offer the most flexible prepayment splits (15% spread across the year). NBC All-In-One and Manulife One are true sweep accounts ideal for disciplined budgeters who want every paycheque dollar working against the balance. RBC Homeline has the strongest Double-Up flexibility but locks you into a single annual lump sum. Is a HELOC at Prime + 0.50% really cheaper than a 4.04% fixed mortgage? On a rate basis, no — 4.95% is higher than 4.04%. But HELOC interest is calculated daily on the outstanding balance, and there is no annual prepayment cap. When you direct aggressive prepayments to the HELOC portion, every dollar reduces interest the next day. Our 5-year math shows a 50/50 split saves roughly $5,400 vs. 100% fixed on a $500K mortgage at the same monthly payment. Can I restructure the fixed/HELOC split at renewal? Yes — and this is the single most overlooked play. At renewal you can re-amortize the entire facility, shift the fixed-to-HELOC ratio, and even change lenders (subject to re-qualification under the stress test). Most homeowners simply sign the renewal letter and miss the chance to reset. What happens if I prepay more than my annual limit on the fixed portion? You'll trigger a prepayment penalty. On fixed terms it's the greater of 3 months' interest or the Interest Rate Differential (IRD) — and IRD is usually much higher, especially on big-bank "posted-rate" IRD calculations. On variable terms it's typically just 3 months' interest. This is exactly why routing aggressive prepayments through the uncapped HELOC sub-account is so powerful. Are readvanceable mortgages risky? They're a tool, not a trap. The risk is behavioural: every dollar you spend on the HELOC re-borrows against your home. Sweep accounts like Manulife One and NBC All-In-One amplify both the savings and the spending temptation. If you have disciplined cash flow, the structure is exceptional. If you treat available credit as extra income, stick with a conventional mortgage. Will the bank let me move the HELOC portion to another lender? Not easily. Readvanceable mortgages are registered as collateral charges, which makes switching lenders more expensive ($700–$1,500 in legal/discharge fees vs. $0 on a standard charge). It's not a reason to avoid them — it's a reason to negotiate hard at renewal, because your current lender knows leaving is costly.
