A home equity line of credit (HELOC) is revolving credit secured by a charge against the borrower's home, functioning much like a large credit line rather than a conventional amortizing loan: the borrower can draw funds up to an approved limit, repay some or all of it, and redraw again, generally paying interest only on the amount actually outstanding at any time. This flexibility is the whole appeal — a HELOC suits ongoing or unpredictable borrowing needs (renovations done in stages, investment opportunities, a financial cushion) far better than a fixed-term loan sized for a single, known expense.
A standalone HELOC can be arranged independently, but it is frequently bundled together with a mortgage as part of a combined product, which is where re-advanceable mortgages come in.
A re-advanceable mortgage pairs a standard amortizing mortgage with a HELOC under one umbrella facility, structured so that the available HELOC limit automatically grows as the mortgage principal is paid down — the borrower's equity is, in effect, continuously unlocked and made available to redraw as they build it, without needing to reapply or requalify each time. This is a genuinely useful structure for a client who wants to use their home equity as an ongoing financial tool over time — funding renovations, investments, or other borrowing needs — rather than accessing equity only once through a traditional refinance.
OSFI refers to this structure as a Combined Loan Plan (CLP) in its regulatory guidance, and it is worth knowing that term, since it may appear in lender or regulatory documentation even though "re-advanceable mortgage" is the more common name in the consumer-facing market.
Because a revolving, continuously available credit facility secured against a home carries a specific risk — it can extend and deepen a borrower's overall indebtedness in a way a normal amortizing loan does not, since the borrower can keep redrawing rather than steadily paying down — OSFI's Guideline B-20 restricts how these combined structures can be built. The revolving HELOC portion of a combined loan plan is capped at 65% loan-to-value. The overall combined facility, including both the amortizing mortgage and the HELOC portion together, is capped at 80% loan-to-value, which is the general maximum for uninsured mortgage lending in any case.
Critically, any lending in the structure above the 65% threshold must be both amortizing and non-readvanceable — meaning that portion behaves like an ordinary mortgage segment that shrinks with payments and cannot be redrawn once repaid, rather than being available for continuous re-borrowing the way the portion up to 65% is. As principal is paid down on that upper segment, the overall authorized limit of the combined facility is reduced correspondingly, until the whole structure sits at or below the 65% revolving threshold.
In practice, a client putting 20% down and structuring a re-advanceable mortgage at federally regulated institutions will typically see their HELOC component capped at 65% loan-to-value from the outset, with the remaining amortizing portion between 65% and 80% loan-to-value structured as a standard, non-revolving mortgage segment. A client wanting the largest possible revolving credit line available immediately, rather than one that grows only as they pay down principal, needs to understand this limit going in — it is a regulatory constraint on federally regulated lenders, not a negotiable lender preference, and provincially regulated credit unions and other lenders outside OSFI's direct oversight can, in some cases, structure things somewhat differently, which is worth confirming file by file rather than assuming the federal rule applies everywhere.
A client wants to structure a re-advanceable mortgage at 80% loan-to-value with the full amount available as an immediately revolving HELOC. What does OSFI's guidance say about this structure at a federally regulated lender?
OSFI's Combined Loan Plan guidance draws a specific line at 65% LTV for the revolving component — lending above that, up to the overall 80% uninsured maximum, must be amortizing and non-readvanceable rather than available as an immediately revolving credit line. The structure is not prohibited outright, and the 65% cap is specifically about the revolving HELOC feature, not a blanket restatement of the 80% uninsured ceiling that already applies generally — conflating the two misses the actual constraint this module is teaching.
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