Home equity calculator for a cottage

See how much equity in your home you could use toward a cottage down payment through a HELOC or refinance, using current Canadian lending limits.

Your numbers

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Example rate. You can change it.
Equity you could use$460,000

Your home could cover the full 20% down payment of $130,000 on this cottage.

Through a home equity line (HELOC)$460,000
Interest only on that line, per month$1,725
Through a refinance$460,000
Payment on the refinance, per month (25 years)$2,546
20% down on the cottage$130,000
In lender terms

Federally regulated lenders cap total borrowing on your home at 80% of its value. The revolving part, the line of credit you can draw and repay, is capped at 65%. Anything between 65% and 80% has to be a regular mortgage that pays down.

Estimate only. Example rate 4.50%. Not a mortgage offer.

Plan my equity for a cottage

How this works

Most cottage buyers already own a home with equity in it. Lenders let you borrow up to 80% of its value in total, minus what you owe.

A home equity line of credit can go to 65% of the value. Past that, up to 80%, the extra has to be a regular mortgage that pays down. The calculator shows both routes and how much of a 20% cottage down payment they cover.

A worked example

A $1,100,000 home with $420,000 owing can borrow up to 80% of its value, which leaves $460,000 of usable equity. That covers the full 20% down payment of $130,000 on a $650,000 cottage.

What the numbers assume

  • Total borrowing up to 80% of your home value, through a refinance.
  • The revolving line of credit part is capped at 65% of the home value.
  • Existing line of credit balances use up room first.
  • Line of credit cost is interest only at the rate shown. Refinance payment is over 25 years.
  • Your home value is your estimate. A lender will order an appraisal.

Common questions

Can I use a HELOC for a cottage down payment?
Yes. It is one of the most common ways to buy a cottage. The lender on the cottage counts the line of credit payment when they qualify you.
How much equity can I take out of my home?
Up to 80% of the value minus what you owe. A line of credit alone can go to 65% of the value.
HELOC or refinance for a cottage?
A line of credit is flexible and you only pay interest on what you use. A refinance can reach more money and pays down on a schedule. Your current mortgage terms and penalty often decide it.
Will my home lender approve the cottage?
They are separate decisions. The equity comes from your home, and the cottage mortgage is approved on the cottage and your income.

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