How Much Equity You Can Access
Your equity is simple: what your home is worth, minus what you still owe on it. But you can't borrow all of it. Lenders cap total borrowing at a maximum LTV (loan-to-value — how much you're borrowing compared to your home's value). For most paths, that ceiling is 80% of your home's value, counting everything secured against the property.
Worked example: your home is worth $900,000 and you owe $500,000. 80% of $900,000 is $720,000. Subtract the $500,000 you owe, and up to $220,000 could be unlocked through an 80% refinance. Other paths use the same math with different ceilings — a HELOC's revolving portion stops at 65% of value.
Two numbers decide everything from here: how much you need, and how much room your equity gives you. Our refinance calculator runs this math with your own figures in under a minute.
The Four Paths, Side by Side
Every home equity product in Ontario is one of these four. Here's the whole map on one table:
| Path | How It Works | Max Borrowing | Key Trade-Off |
|---|---|---|---|
| Cash-out refinance | Replace your mortgage with a bigger one; take the difference in cash | Up to 80% of home value | Lowest rates, but breaking your current mortgage mid-term may trigger a penalty |
| HELOC (home equity line of credit) | Revolving credit line — draw, repay, draw again; interest-only payments allowed | 65% of value revolving; 80% combined with your mortgage | Maximum flexibility, but needs full bank income and credit qualification |
| Second mortgage | A separate loan behind your existing mortgage, which stays untouched | Usually 80–85% of value combined | Fast, keeps your first mortgage intact; rates typically 8–13% |
| Private equity loan | Approval based on your equity, not your credit or income paperwork | Typically up to 75–80% of value | Fastest to fund; highest cost — rates often 9–13% plus lender and brokerage fees |
Notice the pattern: as you move down the table, approval gets easier and faster, and the price goes up. The skill is picking the highest row on this table that will actually say yes to your file — read more on refinancing and second mortgages if one of those looks like your fit.
What Each Path Really Costs
Rates alone don't tell the story — fees and penalties change the ranking. Here is the full cost picture, with nothing left for the fine print:
| Path | Typical Rate | Fees | Watch For |
|---|---|---|---|
| Cash-out refinance | Regular first-mortgage rates — the lowest of the four | Legal & appraisal (~$2,000–$3,000) | Break penalty on your current mortgage if you're mid-term — get it quoted before deciding |
| HELOC | Prime + roughly 0.5–1% | Setup/legal costs, sometimes waived | Interest-only minimums make it easy to carry a balance for years |
| Second mortgage | Roughly 8–13%, shown as a range | Lender fee ~2–4% + brokerage fee, always disclosed in writing | Short 1-year terms — plan the renewal or exit up front |
| Private equity loan | Roughly 9–13%, shown as a range | Lender fee ~2–4% + brokerage fee, always disclosed in writing | Highest total cost — built as a short bridge, not a destination |
All figures are estimates and vary by file — a licensed mortgage agent confirms your exact rate, every fee, and any break penalty in writing before you sign anything. If part of the money is for an income property or a business, the tax treatment of the interest can differ — that's a question for your accountant.
Which Path Fits Which Situation
Match your situation, not the product marketing:
One rule ties the last two together: if credit or urgency pushes you into a private or second mortgage, take it with a 12-month exit plan — a written path back to a bank-rate product once your credit heals or the deadline passes. The higher cost is acceptable precisely because it's temporary.
Risks — and the Exit Plan for the Higher-Cost Paths
Every one of these loans is secured by your home, so borrow with eyes open:
- Payments must fit today's budget, not a hoped-for one. Missed payments on any equity loan put the home itself at risk.
- HELOC drift: interest-only minimums feel painless, which is how balances quietly sit unpaid for years. Set your own repayment schedule.
- Renewal risk on 1-year terms: second and private mortgages come up for renewal fast. If nothing has changed in your file by then, you pay the premium again.
That's why the higher-cost paths come with an exit plan from day one, not at renewal: months 0–6, keep every payment on time and let your credit rebuild; months 6–12, resolve what blocked the bank — clear collections, season income, reduce card balances; at the 12-month mark, a licensed mortgage agent re-shops the file to B lenders and banks, and the expensive loan gets refinanced into a normal one. A private or second mortgage taken without that plan is how a bridge becomes a trap.
How RATECORE Helps
RATECORE is a comparison platform, not a lender. Tell us your situation once — about two minutes, no credit check — and we match you with a licensed mortgage agent who compares all four paths against your actual numbers: the break penalty, the fees, the rates as real ranges. Every cost goes in writing before you decide anything, and if a cheaper path fits, that's the one you'll hear about first.