If you own a home in Canada, you're likely curious about how much of your equity you can actually borrow. The answer depends on your home's current value, your outstanding mortgage, and which type of lender you work with.
Understanding your borrowable equity is the first step toward making informed decisions about renovations, debt consolidation, or other major financial goals.
The 80% LTV Rule
Most Canadian lenders cap your total borrowing at 80% of your home's appraised value. This includes your existing first mortgage plus any new home equity borrowing.
The formula is straightforward:
Available equity = (Home value × 80%) − Outstanding mortgage balance
This 80% limit exists because lenders need a cushion to protect their investment if property values decline.
Real-World Borrowing Examples
Here's what the math looks like at different home values across Canada:
Example 1: Starter Home in the Prairies
- Home value: $350,000
- Mortgage balance: $250,000
- Max borrowing (80% LTV): $350,000 × 80% = $280,000
- Available equity: $280,000 − $250,000 = $30,000
Example 2: Suburban Family Home in Ontario
- Home value: $750,000
- Mortgage balance: $400,000
- Max borrowing (80% LTV): $750,000 × 80% = $600,000
- Available equity: $600,000 − $400,000 = $200,000
Example 3: Detached Home in the GTA
- Home value: $1,200,000
- Mortgage balance: $600,000
- Max borrowing (80% LTV): $1,200,000 × 80% = $960,000
- Available equity: $960,000 − $600,000 = $360,000
Example 4: Condo in Vancouver
- Home value: $900,000
- Mortgage balance: $700,000
- Max borrowing (80% LTV): $900,000 × 80% = $720,000
- Available equity: $720,000 − $700,000 = $20,000
What Affects How Much You Can Borrow?
Your Home's Appraised Value
Lenders order an independent appraisal — not your purchase price or property tax assessment. Appraisals sometimes come in lower than expected, which reduces your available equity.
Your Credit Score
Higher credit scores unlock better rates and higher LTV limits with some lenders. With excellent credit, certain B-lenders may allow up to 85% LTV.
Your Income and Debt Ratios
Even if you have equity, you must demonstrate the income to service the additional debt. Lenders use GDS (≤32-39%) and TDS (≤42-44%) ratios.
Property Type
Condos and rural properties may face stricter LTV limits. Some lenders cap condos at 75% LTV.
Lender Type
- Banks: Strict 80% LTV, best rates
- Credit unions: Flexible, sometimes 80-85%
- B-lenders: Up to 85% LTV
- Private lenders: Up to 85-90% LTV, highest rates
Beyond 80%: Higher LTV Options
If you need to borrow beyond 80% LTV, private lenders and certain B-lenders can help — but at a cost.
| LTV Range | Lender Type | Typical Rate | Notes |
|---|---|---|---|
| Up to 80% | A-lenders (banks) | 6.49% – 7.99% | Best rates, strict qualification |
| 80% – 85% | B-lenders | 7.99% – 9.99% | More flexible income rules |
| 85% – 90% | Private lenders | 9.99% – 12.99% | Equity-focused, fast closing |
These higher-LTV loans are typically short-term (1–2 years) with the expectation that you'll refinance to a lower-rate product once circumstances improve.
Next Steps
Knowing your available equity is just the beginning. The right strategy — whether a home equity loan, HELOC, or refinance — depends on how you plan to use the funds and your overall financial picture.
Read our complete guide to home equity loans in Canada
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