Using Home Equity to Finance Renovations in BC: HELOC vs Refinance
Home Equity Financing for BC Renovations
With BC home values among the highest in Canada, most homeowners have substantial equity to leverage for renovation financing. Understanding the two primary options — HELOC and mortgage refinance — helps you choose the right tool for your renovation budget.
HELOC (Home Equity Line of Credit)
What it is: A revolving line of credit secured against your home equity, up to 65% of your home’s value minus your outstanding mortgage balance.
2026 rate: Prime rate + 0–0.5% (approximately 6.5–7.2%)
Best for: Renovations with uncertain total cost (draw as you go), projects with phased payments, or when you’ll pay off quickly.
HELOC Example (Vancouver home, $1.8M value, $600K mortgage)
- Maximum HELOC: ($1.8M × 65%) – $600K = $570,000
- Draw $150,000 for kitchen + primary bathroom renovation
- Pay interest only during construction (~$900/month at 7.2%)
- Convert to repayment schedule after project complete
Mortgage Refinance
What it is: Replacing your existing mortgage with a new, larger mortgage to access equity as cash.
2026 fixed rates: 4.5–5.5% (lower than HELOC)
Best for: Large renovations ($200,000+), when the rate differential justifies break fee costs, or at mortgage renewal.
Cost Comparison: $200K Renovation
| Option | Rate | 5-Year Interest Cost |
|---|---|---|
| HELOC | 7.0% | $70,000 |
| Mortgage refinance | 5.0% | $50,000 |
| Savings | 2.0% | $20,000 savings with refinance |
→ See also: Vancouver Renovation Planning Guide
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