Second mortgage & HELOC
Second mortgages and HELOCs in Ontario
If your current mortgage has a good rate or a large penalty to break, you may not want to replace it. A home equity line of credit (HELOC) or a second mortgage lets you borrow against your Ontario home and leave the first mortgage alone.
A HELOC from a bank or credit union is usually the least expensive way to borrow against your home without refinancing. The revolving part can be up to 65% of your home's value, and everything secured on the home can be up to 80% (OSFI). A second mortgage is a separate loan behind your first. A second mortgage often comes from an alternative or private lender and costs more, so it suits a shorter, planned period.
When a HELOC or second mortgage fits
A HELOC and a second mortgage both leave your first mortgage in place. Whether one of them fits, and which, depends on your current mortgage, your costs and what your bank will lend.
Your current rate is worth keeping
Breaking a low-rate mortgage before its term ends can cost a large prepayment penalty. We compare the total cost of refinancing, penalty included, with a HELOC or second mortgage beside your current mortgage, which may cost less overall.
Your costs are ongoing or uneven
For renovations in stages, tuition or a business need, a HELOC lets you draw money as you need it. You pay interest only on the amount you have drawn.
Your bank said no to more borrowing
If you don't qualify for a HELOC, a second mortgage from an alternative lender can bridge the gap until you can refinance. The second mortgage costs more, so before you sign we plan with you how you will repay or refinance it.
The kinds of lender we try, in order
We start with the first kind of lender for every client, and move down the ladder only when the kind above can't help yet.
Banks, credit unions, trust companies and monoline lenders
A bank, credit union, trust company or monoline lender usually costs you least. We start here for every client, and compare more than one lender's offer.
How we compare lenders →Alternative ("B") lenders
We look at alternative lenders when your income, credit or property doesn't fit a bank's rules today. Alternative lenders charge higher rates and fees, often for a shorter term, so we plan your move back to a bank.
When an alternative lender fits →Private money, as a short bridge
We look at a private bridge only when no bank or alternative lender can help yet and there's a clear exit. We refer private requests to Stonefield Capital, our private-lending brand.
When private makes sense →
How a HELOC or second mortgage is set up, from your borrowing room to registration
Check your borrowing room
You check your home's value, your mortgage balance and the 65% / 80% limits. The HELOC room tool gives a first estimate of your borrowing room.
Compare the routes
We compare a HELOC from your bank or another lender, a refinance and a second mortgage on cost, flexibility and risk.
Qualify and appraise
The lender checks your income at the stress-test rate and usually appraises the home.
Register the charge and draw funds
Your lawyer registers the new charge. With a HELOC, you draw funds as you need them.
What documents and details do I need to have ready?
You need no documents for the first call. Once we know which documents your lender needs, you share them through a secure application and never by e-mail.
- Latest mortgage statement and property tax bill
- Income documents
- What the money is for (lenders ask)
- Statements for any debts you plan to pay off
Questions about HELOCs and second mortgages
How much can I borrow on a HELOC?
With a federally regulated lender, the revolving part can be up to 65% of your home's value, and your mortgage plus the HELOC up to 80%. Try the HELOC room tool.
Is a second mortgage more expensive than a HELOC?
Usually yes. Second mortgages are behind the first mortgage, so lenders charge more, and alternative or private lenders often add fees. Any fee is disclosed in writing before you commit.
Can a HELOC payment be interest-only?
Many HELOCs allow interest-only payments on the revolving part. Interest-only payments keep the payment low, but the balance does not go down unless you pay more. Set your own repayment plan.
Rules described on this page were checked on 2026-10-23. Every mortgage is subject to lender approval. This page is general information, not financial advice.
More questions about HELOCs and second mortgages
No cost to talk
Ask a mortgage broker to call you back
Tell us what you're planning for a home in Ontario and a good number to reach you. We call back within one business day, usually sooner. We ask for documents only once we know which ones your mortgage needs.
You can also call us at (416) 371-2077.