Canadians Are Still Using Their Homes As ATMs, Just Not With HELOCs

Canadians are cooling on home equity line of credit (HELOC) loans, but homes are still being used as ATMs. Filings show the balance of HELOC loans fell slightly in November. Don’t let that fool you into thinking the spree of home equity spending is over though. Households are still borrowing hundreds of millions per month secured by home equity. They’re just using HELOC-like products, instead of HELOCs.

Canadians Owe Over $171 Billion In HELOC Debt

HELOC debt hit $171.6 billion in November, making a negligible decline of $24 million. Steady growth was still present, with the balance 2.9% (+$4.9 billion) higher than last year. We’ll circle back to why this number is relatively small, but first let’s look at how this compares to recent data. 

HELOC Debt Is Slowing In Growth, As Households Use Other Equity Loan Products

HELOC balances are steady but slowing. The 2.9% annual growth rate in November marked a deceleration from the peak reached in August. It might not sound like much, but prior to 2022, balances hadn’t grown this fast since 2013. It’s bigger than usual, but not quite what you’d envision with the talk about home equity leverage.


The difference has to do with the definition of a HELOC. Prior to a few years ago, data on HELOCs wasn’t broken out. This resulted in analysts using the balance of all personal loans secured by home equity. HELOCs now use a strict definition, that happens to exclude  HELOC-type loans.

Home equity loans with fixed repayment schedules, or bundled with mortgages aren’t included. A household might think of these as HELOCs, and they might even be sold as them. However, for the purposes of regulation they’re not the same. That might lead to thinking use is low, but in reality there’s still robust use of home equity loans. People are just picking newer products that might be more attractive to borrowers. 

Canadian Debt Secured By Home Equity

Canadian household debt secured by residential real estate equity.

Source: Bank of Canada; Better Dwelling.

Canadians Owe Over $309 Billion In Home Equity Loans

Personal loans secured by housing saw a slight increase of 0.1% (+$300 million) to reach $309.2 billion in November. Monthly growth was small-ish compared to recent growth. However, the annual rate still came in at a robust 8.6% (+$24.6 billion). For context, these loans are outpacing annual growth for income, savings, or even GDP.

Canadian Debt Secured By Home Equity Growth

The annual growth of household debt secured by residential real estate equity. 

Source: Bank of Canada; Better Dwelling.

HELOC use is technically low, but that doesn’t mean households aren’t indulging in home equity use. Despite higher interest rates, the balance of home equity loans is still surging by hundreds of millions per month. The rise highlights the ongoing trend of using housing as a source of personal funding. 

Canada’s bank regulator recently warned on the rising popularity of home equity loans. They believe the persistent use from some households might be hiding distress. Perpetually carrying a debt can make borrowers vulnerable to shock, amplifying small issues.



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  • Dennis_K 1 year ago

    I wonder how much of the HELOC and HELOC-related debt is against households who already have paid off their mortgage (the latter of which I understand is about 65% of Canadian households) and how much of it is against households that still carry a mortgage?

    To me, it seems that if the borrowing is against only those households who still carry a mortgage (i.e. 35%), then agreed, it’s probably not a good thing, but it’s concentrated within a smaller segment of the population. If the borrowing is against (greater numbers of) households with no (or very little) mortgage, then that’s a bigger problem – it means that even without housing debt, persons are needing more money than they have coming in (or have been able to build up in savings) to sustain themselves – that sounds to me like a systemic issue that would lead to financial instability.

    • Ryan Frouws 1 year ago

      great comment^^^

    • Stu 1 year ago

      How do rates compare between lines of credit and mortgages? Seems like if a property is mortgage-free it would be cheaper to remortgage than to take out a line of credit (although I’m not an expert).

  • Bev Kennedy 1 year ago

    So many stats slip through the cracks.
    Of course many of those using “ersatz Heloc” lending vehicles are under pressure.
    However compared to credit card interest rates this is perhaps an indication of financial literacy.
    Also some parents are helping their kids with tuition costs as well. So exactly where would that funding be coming from considering the all in costs?
    So there are pressures from many directions including post grad loans that don’t waive interest and the rapid escalation of that as well.

  • Igor Savesalot 1 year ago

    Fac…..Heloc for assets is good…Heloc for cosumer garbage like cars…consumer bobbles and dumpster material is bad

  • Found on Google 1 year ago

    What percentage of Canadian homeowners are mortgage-free?

    According to Canadian household debt statistics, only 34% of homeowners have mortgage-free properties.

    • Dennis_K 1 year ago

      If you’re referring to the website madeinca, then yes, I see your 34% value (, however that would appear to make my observation above even more somber — means that despite mortgage debt, the needs to take out HELOC and HELOC-like loans to support household (i.e. consumer) debt is even higher – yikes!

      And seeing that nearly 25% of Canadians surveyed (out of a sample size of 1000) say they needed to take out loans in 2022 to help pay for living costs (see August 2022 article entitled ‘Impact of Inflation: Canada consumer debt spikes as millions struggle with cost of living increase’), that’s getting bad.

      • Dennis_K 1 year ago

        Hmmm …. just found some info in a January 2022 BetterDwelling article that the the percentage of households with outstanding mortgage debt across Canada is just under 30%, as of Q3 in 2021 ( I wonder which values are correct? Maybe we should be looking at this 30% value as an absolute minimum, and it could be higher. Still, increased use of HELOC and HELOC-type loans doesn’t seem to be a good sign.

        • Terrance Yu 1 year ago

          They aren’t contrary. About a third rent, a third own, and a third pretend they own but pay rent to the banks.

          It shouldn’t be higher, it should be lower. People have multiple mortgages, including their investment properties that are usually rented out (or they’re recreational). Not many instances of multiple families claiming they’re homeowners of the same home though.

          • Dennis_K 1 year ago

            Possibly. I found another source of information (National Bank of Canada Housing Affordability Monitor, November 30, 2022), which shows the urban composite home ownership rate in 2021 ranges from 54% (Montreal) up to 71% (Calgary), with most areas being in the 60% range.

            I guess it would be more useful if the outstanding mortgage data was split into principal and non-principal residence categories.

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