What is a readvanceable mortgage?

In Canada, a readvanceable mortgage combines an amortizing mortgage and a home equity line of credit (HELOC) under one registration on your home. As you pay down the mortgage, the available credit on the line can grow. With a federally regulated lender, the total cannot exceed 80% of your home's value, and the revolving line cannot exceed 65%.

How a readvanceable mortgage works

The lender registers one charge on your home for a total amount, often higher than what you first borrow. Inside that charge sit two or more parts:

• An amortizing mortgage, paid down on a schedule like any mortgage. You can often split the mortgage into several portions with different terms or rates.
• A revolving HELOC, which you can draw on and repay.

Each regular payment reduces the mortgage balance. On a readvanceable product, the amount of principal you repay can become available on the HELOC, up to the overall limit. Making repaid principal available again is the "readvance".

Many banks, and some credit unions and monoline lenders, offer readvanceable mortgages under different product names.

The limits on a readvanceable mortgage

OSFI's rules for federally regulated lenders (checked October 2026) apply to the whole package:

1. The revolving HELOC part can be no more than 65% of the home's value.
2. The total, mortgage plus HELOC, can be no more than 80%.
3. Anything above 65% must be on an amortizing portion.

For example, take a home valued at $1,000,000 with a combined limit of $800,000. If your mortgage is $600,000, up to $200,000 is available on the line. As you pay the mortgage down to $550,000, the line's limit can rise toward $250,000, but the line itself can never exceed $650,000.

Why people choose a readvanceable mortgage

• Flexibility: access to equity without re-applying or paying for a new registration each time.
• One registration: fewer legal costs when you want to add or move money between parts.
• Planning: some people use the readvanced room for renovations or investments. Tax treatment is a question for your accountant.

The trade-offs of a readvanceable mortgage

A readvanceable mortgage makes it easy to keep borrowing. Without a plan, the line can quietly absorb every dollar you have paid off, so the total you owe never falls. The HELOC part usually has a variable rate and may require only interest.

Switching lenders can also be more involved. Because the lender registers a larger charge, moving to another lender at renewal usually means a new registration and legal costs. Ask about switching costs before you sign, especially if you like to compare at each renewal.

You still have to qualify for a readvanceable mortgage. The lender generally applies the stress test to the full amount: the greater of the contract rate plus 2 percentage points, or 5.25%.

What to do next

To estimate your HELOC room, try the HELOC room tool; results are estimates only, not an offer or advice. Or use our call-me-back form to talk through whether a readvanceable mortgage suits you.