What Your Home Equity Actually Costs, City by City in Ontario

Equity gets discussed in percentages and lived in dollars. "You can go to 85% combined loan-to-value" means one thing on a $490,000 home in Windsor and something else entirely on a $1,320,000 one in Oakville — and the gap isn't only size. It changes which lender you should be talking to at all.

Two ceilings run the whole thing

80% is the conventional wall. A refinance in Canada caps at 80% of appraised value. Default insurance isn't available on a refinance above that line, so no A or B lender will cross it, no matter how much equity you've built.

85% is roughly where a private second stops. Past the conventional wall, the usual structure is a second mortgage sitting behind your existing first. It's in second position, so it's priced higher, and most private lenders draw their line around 85% combined loan-to-value.

Everything below is arithmetic on those two lines.

Same rules, four very different answers

Take an owner who owes 65% of what their home is worth — a fairly ordinary mid-term position — and apply both ceilings.

Windsor, $490,000 average. Conventional room, about $73,500. A private second reaches roughly $98,000. At this size the fee structure bites hardest: 2–5% on a $98,000 advance is $1,960 to $4,900, against a modest borrowing need. This is the market where the first question should always be whether a B lender can take the file instead.

Ottawa, $680,000 average. About $102,000 conventional, $136,000 private. Mid-range markets are where B and private lenders genuinely compete for the same deal — and where getting both priced is worth the phone call, because the difference across a two-year hold usually runs to thousands.

Toronto, $1,050,000 average. About $157,500 conventional, $210,000 private. Large enough that private lenders take the file seriously, and large enough that a 2–5% fee is $4,200 to $10,500. At this size the exit plan matters more than the headline rate.

Oakville, $1,320,000 average. About $198,000 conventional, $264,000 private. The biggest numbers in the province outside central Toronto — and the biggest fees in absolute terms.

Those run off each city's average price. Yours will differ, and only a lender-ordered appraisal binds. We publish the full computed math per market, cost ranges included: Toronto, Ottawa, Hamilton, Oakville, Windsor and others.

Two things the pattern tells you

Smaller markets should start at the B tier. Percentage fees don't scale down gracefully. On a sub-$100,000 advance, a private lender's fee can eat a real share of the money you're actually borrowing. B lenders at roughly 1–2% over bank rates plus about a 1% fee are usually the better instrument, and they should get priced first.

Bigger markets have more options and more at stake. More private capital chases GTA files, which generally means better terms than a thin regional market. But the fee is a percentage, so the same 3% costs four times more in Oakville than in Windsor. Borrowers negotiate the rate; the fee and the term length are what actually decide total cost.

Before you borrow against equity at all

A private second is one of four ways to reach your equity, and it's rarely the cheapest. A refinance, a HELOC, a second mortgage and a private equity loan each suit different situations — our comparison of all four is the place to start rather than assuming.

If a refinance does the job inside the 80% ceiling and you'd qualify, do that. The reasons to go past it are real and specific: you need more than 80%, you need it faster than an institution moves, or you wouldn't currently pass qualification. If none of those apply, the more expensive instrument is just more expensive. How second mortgages actually work covers the middle ground.

Whichever route you take, every rate and every fee has to be disclosed to you in writing before you commit. In Ontario, private mortgages are dealt only by mortgage agents holding a Level 2 licence or by mortgage brokers. If a cost turns up for the first time on the commitment document, that's the moment to stop and ask what else is in there.