HELOC Rates Canada After Prime Rose To 4.70%

HELOC rates in Canada are variable and priced off the lender's prime rate, which rose to 4.70% on October 29, 2026 after the Bank of Canada hiked its policy rate to 2.50% the day before. FCAC gives example premiums of prime plus 0.5% to 2%, which works out to about 5.20% to 6.70% at today's prime. Interest is charged only on the amount drawn, so a $50,000 draw at 5.20% costs $216.67 a month in interest alone.

HELOC Rates In Canada After Prime Rose To 4.70%

A HELOC has no rate of its own in the fixed-rate sense. The lender quotes its prime rate plus a premium, and the rate moves every time prime moves. RBC, TD, BMO, Scotiabank and CIBC all raised prime from 4.45% to 4.70% effective October 29, 2026, each bank announcing the move on October 28 after the Bank of Canada raised the overnight target from 2.25% to 2.50%. Prime now sits 2.20 points above the overnight target.

No bank's actual HELOC spread is published on this page, because the banks do not publish it as a standard rate table the way they post mortgage specials. What FCAC publishes is the structure: prime plus a premium, with examples ranging from +0.5% to +2%. Applied to today's prime, that range looks like this:

These are FCAC example premiums, not quotes from any named lender. Your actual spread depends on the lender, the product and your file. That is exactly the kind of number a licensed mortgage broker can shop across lenders; if you want yours priced, request cheaper rates and ask specifically what prime-minus or prime-plus spread a broker can get on a secured readvanceable line against your home value.

How HELOC Interest Is Charged

Interest on a HELOC is charged only on the amount drawn, not on the approved limit, and interest-only minimum payments are common. The math is simple: divide the annual rate by 12 and multiply by the drawn balance.

Two cautions. First, interest-only is the minimum, not the whole cost: the principal stays on the line until you repay it, and the interest cost moves with prime. Second, if a HELOC portion is set up as an amortizing loan rather than a revolving line, the payment table applies instead. At 5.20% a $400,000 amortizing loan over 25 years costs $2,372.17 a month, against $2,315.05 at 4.95%, the old prime-plus-0.50% equivalent. The difference between those two cells, $57.12 a month, is what the October hike added to that amortizing structure.

Before comparing any of this to your own situation, check how much room you actually have. Enter your home value and mortgage balance below.

The calculator shows the same two ceilings the lenders use, described next.

How Much You Can Borrow On A HELOC

Two federal limits govern a HELOC at a federally regulated lender, set out in OSFI's B-20 guideline:

• 65% ceiling on the revolving portion. The HELOC itself, the part you can draw and repay freely, cannot exceed 65% of the home's value.
• 80% ceiling on the total. The HELOC plus any amortizing mortgage together cannot exceed 80% of the home's value. Lending above 65% must sit in the amortizing portion, not the revolving line.

Equity rules of thumb from FCAC: a standalone HELOC generally needs more than 35% equity in the home, and a combined mortgage-plus-line product generally needs more than 20%.

What The October Hike Did To A HELOC

HELOCs priced off those banks' prime repriced overnight. When the five big banks moved prime from 4.45% to 4.70% effective October 29, a line at prime plus 0.50% went from 4.95% to 5.20%. On a $100,000 draw, the interest-only minimum moved from $412.50 to $433.33 a month, an increase of $20.83. On a $50,000 draw, the increase is $10.42 a month, from $206.25 to $216.67.

Prime has travelled a long way to get here. The Bank of Canada series shows prime peaked at 7.20% in July 2023, fell to 4.70% by September 2025, sat at 4.45% from late 2025 until October 29, 2026, and returned to 4.70% with this move. Prime held at 4.95% from March to September 2025, so anyone who set up a HELOC that summer is now paying less than they started at, and anyone who opened one during the 4.45% months just absorbed a 0.25-point increase.

More increases are possible but nothing is settled. The Bank of Canada said on October 28 that a further increase may be needed and that it will proceed carefully. BMO expects another 25 basis point hike in January 2027, Desjardins expects one more hike with data-dependent timing, and CIBC sees likely one more hike and not above 2.75%, according to press reports after the decision. The next Bank of Canada decision is December 9, 2026. Those are attributed views, not ours; track the schedule on the announcement date list.

HELOC Or Refinance

A HELOC and a refinance both turn equity into cash, but they price differently. The HELOC carries prime plus a premium, moves with prime, and charges interest only on what you draw. A refinance blends everything into one mortgage, which can be fixed or variable, and amortizes from day one.

The refinance ceiling is the same 80% of home value at federally regulated lenders, uninsured. Two costs differ. The stress test applies to a refinance: you qualify at the higher of the contract rate plus 2 points or 5.25%. Breaking the current term mid-way also triggers a prepayment penalty, which on a fixed mortgage is usually the greater of three months' interest or the interest rate differential, and big banks often compute the IRD against posted rates, which tends to produce larger penalties. If your term is nearly up, the penalty question may disappear; the penalty calculator works through both methods.

For a rough comparison using the payment table, suppose you need $400,000 and a refinance lands at a 3-year fixed around the levels borrowers reported on the rate board in late October, such as 4.44%. That amortizing loan over 25 years costs $2,200.57 a month, principal and interest included. A $400,000 interest-only HELOC draw at 5.20% costs $1,733.33 a month, but none of it reduces principal. That comparison is a cash flow comparison only: the HELOC looks cheaper month to month and costs more in interest over time if the balance just sits there, because no principal is being repaid. The trade-off is explained further in the fixed or variable guide, and the refinance page covers the other side of the comparison.

Getting The Best HELOC Rate

What you are shopping is the spread over prime, since prime is the same 4.70% everywhere at the big banks. A line at prime plus 0.50% beats a line at prime plus 1.50% by 1.00 point, which on a $100,000 draw is $83.33 a month in interest, every month, until you repay it. The board's variable quotes give a sense of the negotiating room that exists on prime-based products generally: on October 28, one borrower reported a broker quote at prime minus 1.10%, a 3.35% variable quoted against the old 4.45% prime, and on October 26 Scotiabank was reported holding a 5-year variable at 3.6% on a 120-day hold, also against 4.45% prime. Those are mortgages, not HELOCs, but they show that prime-based pricing is negotiable and that quoted discounts float when prime moves.

Your HELOC pricing depends on how much equity you hold, whether the product is standalone or combined, and the lender's appetite for readvanceable files. When you request cheaper rates, tell the broker the size of the draw you actually need and ask them to price the HELOC spread and a refinance alternative side by side, including the stress test and any penalty on your current term.

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