Key Takeaways 80% of your home's appraised value The formula is straightforward: Max borrowing (80% LTV): Max borrowing (80% LTV): On paper you can access 80% LTV. In practice, qualifying income and credit are the real gate. The mistake most Canadians make: Calculating "available equity" without running it through the OSFI stress test. The bank won't lend on appraised value alone. What changed in 2026 (and why it matters now) Available equity = (Appraised value × 80%) − existing mortgage balance. Approved equity = whatever your income and credit qualify for under stress test, whichever is lower. 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. --- ## FAQ **Can I borrow against my home if I just bought it?** Yes, but you'll need to have at least 20% equity. If you put 20% down and values haven't changed, you may have little available equity initially. **Does the lender use my purchase price or current value?** Current appraised value. If your home has appreciated, you may have more equity than you think. **Can I borrow equity from a rental property?** Yes, but expect slightly higher rates (0.5–1% premium) and stricter qualification requirements. **How do I find out my home's current value?** A licensed appraiser provides the most accurate value ($300–$500). For a free estimate, check your municipal property assessment or online valuation tools, though these are less accurate. --- ## 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 Find out how much equity you can actually access Free, no-commitment equity analysis. We show you HELOC, refinance, and second-mortgage options side by side. Get My Equity Options Ready to Get Started? Contact us today for personalized mortgage advice and competitive rates. Get Pre-Approved Call (416) 822-7357 Frequently Asked Questions Can I borrow 80% LTV without income? A-lenders: no. Alternative/private: yes, at higher rates.
