How much equity can I take out of my home?

In Canada, you can generally refinance up to 80% of your home's appraised value with a bank or other federally regulated lender. The equity you can take out is that amount minus what you already owe. You also have to qualify for the larger payment under the stress test, and the lender makes the final decision.

How the 80% limit works

Equity is your home's value minus everything secured against it. Loan-to-value (LTV) is your total mortgage debt as a share of the value. OSFI's rules cap an uninsured mortgage at 80% LTV for federally regulated lenders such as the banks, and that cap is the ceiling for a refinance (source: osfi-bsif.gc.ca, checked October 2026).

The home value in that limit is the lender's appraised value, not your own estimate or a listing nearby. If the appraisal comes in lower than you hoped, the equity available falls with it.

A worked example of taking out equity

Your home appraises at $900,000 and you owe $450,000.

1. 80% of $900,000 is $720,000, the most a federally regulated lender will lend in total.
2. Subtract your current balance: $720,000 minus $450,000 leaves $270,000 of equity you could access.
3. From that, subtract the costs: any prepayment penalty for breaking your current mortgage early, legal fees and an appraisal.

If you are mid-term, the prepayment penalty can be significant. The penalty is usually the higher of three months' interest or the interest rate differential (IRD), which compares your rate with the lender's current rate for your remaining term (source: Financial Consumer Agency of Canada). Your contract governs. The penalty estimator gives a rough figure before you decide.

Qualifying for the larger mortgage

Having the equity is half the test. A bigger mortgage means a bigger payment. The lender checks that you can carry the bigger payment at the qualifying rate: the greater of your contract rate plus 2 percentage points, or 5.25%. Your housing costs and other debts must fit the lender's limits. If the refinance pays off high-interest debt, lenders generally treat those debts as gone, which can help your ratios.

Ways to take out equity, in order

Banks, credit unions and monoline lenders. A full refinance up to 80% is the standard route. Some provincially regulated credit unions set their own limits.

A home equity line of credit (HELOC) is the other institutional option. The revolving part is capped at 65% of value; anything above that, up to 80% in total, must be on an amortizing mortgage.

Alternative lenders and second mortgages may help if your income or credit does not fit a bank's rules, usually at a higher cost and with fees. Private money is a short bridge only, not a long-term plan.

What to do next

To estimate your own numbers, try the refinance equity tool; results are estimates only, not an offer or advice. Or use our call-me-back form and we will walk through your options.