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Every home equity product converts unsecured or absent debt into debt secured against your home. A missed payment then has a path to foreclosure it did not previously have. Federal rules cap combined mortgage and home-equity borrowing at 80 percent of the home's value, and a standalone HELOC at 65 percent.
In Ontario, charges are registered under the Land Titles system through Teraview, and the discharge process is electronic and comparatively fast.
| Applies | Yes |
|---|---|
| Structure | Tiered: 0.5% to first $55,000; 1.0% to $250,000; 1.5% to $400,000; 2.0% to $2,000,000; 2.5% above |
| Fthb Rebate | Up to $4,000 provincial |
| Note | Toronto adds a municipal LTT at matching rates, so Toronto buyers pay roughly double. Toronto first-time buyers get a further rebate up to $4,475. Toronto introduced higher luxury brackets above $3M in April 2026. |
| Confidence | VERIFIED-MULTI |
Every lender listed here also appears on our home equity loans in Canada page, which explains how much equity you can borrow, what the lenders check and what a loan costs over its term. This page lists the same lenders for homeowners in Ontario.
The amount you as a homeowner can borrow via a home equity loan depends on the value of your home and any other loans (such as a mortgage) you have against it. Generally speaking you can borrow up to 85% of your home's value. Ontario's average house price is just over $900,000, so in theory you could borrow up to $765,000. However, if you have a mortgage already (let's say worth $365,000, the average new mortgage size in Ontario), then the amount of borrowing room you have left for a new home equity loan is $400,000. Most lenders also have upper limits on how much you can borrow.
If you're one of Ontario's 5 million or so homeowners, and are considering borrowing money against the equity in your home, you have several options. Home equity loans and home equity lines of credit (HELOCs) are sometimes confused, but they are different. A home equity loan provides you with an upfront lump sum, for which you make fixed payments for the life of the loan. A HELOC is like a credit card secured against your home – you can only borrow up to the maximum amount allowed, but this can be taken out in smaller sums, as and when you need it. And because of this, a HELOC does not have a fixed repayment schedule.
If you're considering leveraging the equity in your home in Ontario, understanding the eligibility requirements is essential. Typically, obtaining a home equity loan or an equity line of credit isn't overly complex, but there are standard criteria you'll need to meet. First and foremost, all applicants must be at least 18 years old, which is the legal age for entering into contractual agreements in Ontario. In addition to age, you'll need to provide proof of identity and address, a standard protocol for most financial transactions.
An active bank account is also a necessity. This account is where your home equity line or loan funds will be disbursed, and where your repayments will be deducted. Ownership of the home you're drawing equity from is, understandably, a non-negotiable requirement. After all, the equity you're accessing is directly tied to the value of this property.
However, while these requirements might seem straightforward, the depth of the approval goes beyond basic criteria. For many lenders, diving into the specifics of your financial health is an integral part of determining your eligibility. For instance, a second mortgage or a home equity product typically necessitates a credit check. Lenders will assess your credit score, ensuring it meets their minimum threshold. Your debt-to-income ratio will also be evaluated to ascertain your ability to manage and repay the borrowed amount, taking into consideration your existing financial obligations.
Furthermore, a home appraisal is often mandated. This assessment ensures that the value of your home aligns with the amount you're aiming to borrow. Your employment and the associated income will be scrutinized as well, offering lenders insight into your financial stability. Lastly, lenders will dive deep into understanding your existing equity levels, comparing your home's current value to any outstanding balance.
In essence, while the path to obtaining a home equity product in Ontario can be straightforward for homeowners who meet all criteria, it's a journey that requires preparedness and a thorough understanding of the entire process.
Variable interest rates on Ontario home equity loans can be as low as 2%, but the average is just under 6%. The exact rate you pay will depend on the lender you go to, your financial circumstances, and the property in question. It's important to remember though that interest charges are not the only cost associated with taking out a home equity loan; you also need to take into account fees, which may include: 1. Home appraisal fees 2. Loan origination fees 3. Late payment fees 4. Early repayment fees 5. Closing fees 6. Legal fees
Ontario homeowners considering tapping into their property's value with a home equity loan should weigh the pros and cons to make an informed decision. These loans, which include products like the equity line of credit and home equity line, offer both enticing benefits and potential pitfalls:
Pros:
Predictability: Home equity loans often come with fixed interest rates, leading to consistent and predictable monthly repayments.
Attractive Interest Rates: Typically, these loans have lower interest rates compared to other financing options like credit cards or unsecured personal loans.
Tax Benefits: Under certain conditions, the interest payments on a home equity loan may be tax-deductible, offering potential savings.
Flexible Use of Funds: The borrowed amount can be utilized for various purposes, from home renovations to debt consolidation or even pursuing educational endeavors.
Extended Loan Duration: Home equity loans in Ontario often provide long loan terms, giving borrowers ample time for repayment.
Cons:
Additional Financial Commitment: If you have an existing mortgage, taking out a home equity loan means you'll be obligated to make monthly repayments on both loans.
Potential Risk to Your Home: Defaulting on a home equity loan can put your property in jeopardy, as lenders may have the right to take possession if payments are not made.
Liability After Home Sale: If circumstances force you to sell your property at a loss, you'll still be responsible for repaying the outstanding loan balance.
Equity Prerequisite: Your eligibility largely depends on the amount of equity you've built in your home. If you haven’t accumulated enough equity, you might not qualify.
