Home Equity Loans in Ontario

Equity is the gap between what your home is worth and what you still owe on it. A home equity loan lets you borrow against that gap and receive the money in one payment, rather than as a limit you draw on over time. You then repay it on a fixed schedule, much like any other instalment debt.

How a home equity loan works

You apply with a lender, the property is appraised, and the lender registers a charge against title behind your existing mortgage. That is why it is commonly described as a second mortgage. Because the loan is closed, the amount is advanced once and the terms are set at the start. If you repay it early, you generally cannot pull those funds back out unless you arrange a new borrowing.

What the lender looks at

The lender weighs the appraised value of the property, the remaining balance on your first mortgage, your income, and your other debts. How much you can access is capped by loan-to-value rules: at federally regulated lenders, a home equity line is generally limited to 65% of appraised value, with total secured lending usually capped at 80%, per OSFI Guideline B-20. Lenders also assess whether you can carry the new payment alongside everything else you owe, and the Financial Consumer Agency of Canada explains how mortgage qualification generally works.

Costs to expect

Beyond interest, there are usually one-time costs. These can include an appraisal or property valuation, a title search, registration of the charge, and legal or administrative fees. Some lenders bundle these into the loan; others bill them separately. Ask for a full written disclosure of the cost of borrowing before you commit, and compare it with what unsecured borrowing would cost you.

When a lump sum fits better

• You have a known, one-time expense such as a renovation or a large purchase.
• You want a predictable payment that does not change with interest rates.
• You plan to repay on a set schedule and do not need to redraw funds.
• You want a lower rate than unsecured options and can accept your home as security.

This route puts your home on the line if payments stop. That is a serious step, and it is worth talking through with a licensed professional before you commit. LoanGoose is a loan matching and comparison service, not a lender. The lowest rates are only available to the most qualified applicants.