Short answer: A refinance replaces your mortgage with a bigger one, up to 80% of your home's value, and suits a one-time, known need such as consolidating debt, because you get a lump sum on a regular amortizing payment. A HELOC (home equity line of credit) lets you borrow, repay and re-borrow up to 65% of your home's value on its own, or up to 80% when combined with a mortgage. It suits staged or uncertain spending, such as a renovation in phases. Both require you to pass the federal stress test, and breaking your current mortgage early to refinance can trigger a prepayment penalty, so timing it near renewal often lowers the cost.
Side by side
| Refinance | HELOC (standalone) | HELOC combined with a mortgage (readvanceable) | |
|---|---|---|---|
| Maximum borrowing | Up to 80% of value (total of all secured debt) | Up to 65% of value | Up to 80% total; the revolving line itself up to 65% |
| How you get the money | One lump sum | Draw as needed | Draw as needed; available credit grows as you pay down the mortgage |
| Typical rate type | Fixed or variable mortgage rate | Variable, usually tied to the lender's prime rate | Mortgage portion fixed or variable; line variable |
| Payments | Principal and interest | Lender may allow interest-only | Mortgage: principal and interest; line: often interest-only |
| Penalty risk | Breaking your current term mid-way can cost 3 months' interest or an interest rate differential (IRD) | None on your existing mortgage if it stays in place | Usually means moving or restructuring the mortgage, so check penalties |
| Qualifying | Stress test on the new, larger mortgage | Stress test; more than 35% equity needed | Stress test; at least 20% equity needed |
| Costs | Appraisal, legal fees, possible penalty | Appraisal, legal/registration, possible admin fees | Appraisal, legal/registration |
| Usually suits | Known lump-sum need, debt consolidation | Phased renovations, an emergency buffer | Ongoing flexibility with a long-term mortgage |
Sources: FCAC, Home equity lines of credit (65% HELOC limit; more than 35% equity for a standalone HELOC, 20% for a HELOC combined with a mortgage; stress test at banks); FCAC, Borrowing against home equity (you may usually borrow up to 80% of your home's value); Bank Act, section 418 (federally regulated banks generally cannot refinance above 80% unless the loan is insured or guaranteed); OSFI, minimum qualifying rate; FCAC, Mortgage fees: Prepayment penalties.
Worked example: a typical Calgary detached home
Using CREB's October 2026 detached benchmark price of $735,100 (CREB, November 2, 2026) and a remaining mortgage of $400,000:
| Refinance to 80% | Standalone HELOC (65% cap) | Readvanceable (80% total) | |
|---|---|---|---|
| Maximum total secured borrowing | $588,080 | $477,815 | $588,080 |
| Less existing mortgage | $400,000 | $400,000 | $400,000 |
| Equity you could access (before costs) | about $188,080 | about $77,815 | about $188,080 (as a line) |
These are ceilings, not approvals. The lender's appraisal sets the value, and you still have to qualify on income at the stress-test rate. Penalties, legal and appraisal fees reduce the cash you actually receive from a refinance. For today's posted mortgage rates, see current mortgage rates in Alberta. This example does not use or quote a specific rate.
How to choose: four questions
- Do you know the exact amount you need? Yes, and it's a one-time need: a refinance usually fits. Unsure or spread over months: a HELOC usually fits.
- When does your current term end? Close to renewal, a refinance can avoid most or all of the penalty. Mid-term, compare the penalty with the cost of a HELOC behind your existing mortgage. See how refinance penalties work in Alberta and mortgage renewal in Alberta.
- Will you pay it down? Interest-only HELOC payments never retire the balance. FCAC suggests setting a repayment schedule and asking for a lower limit if you might overspend (FCAC).
- How exposed are you to rate changes? HELOC rates usually move with the lender's prime rate, and prime usually follows the Bank of Canada. The Bank raised its policy rate by 0.25 points to 2.50% on October 28, 2026, and its next scheduled decision is December 9, 2026 (Bank of Canada).
Compare a HELOC and a refinance on your own numbers, or read how a private second mortgage compares if you want to leave a first mortgage in place.
Next steps
- Start your pre-approval online (secure Pineapple application, opens in a new tab)
- Book a 30-minute phone call
- Book a 1-hour appointment
- Call or text 403-438-0761
A pre-approval is not a guarantee of final mortgage approval. Buying or refinancing in Calgary? See Calgary mortgage services, or John's local sites for Airdrie, Olds and Mountain View County, Red Deer and Edmonton.
John Antle, Sub Mortgage Broker - Team Lead, Pineapple National Inc.
General information only, not personalized financial or mortgage advice. Please speak with a licensed mortgage professional about your situation. Figures are examples based on the sources and assumptions shown and will differ for your situation. They are not an offer, a quote or a guarantee of approval. Every mortgage is subject to lender approval.
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