Best Line of Credit Rates in Canada (2026)

A personal line of credit is one of the cheaper ways to borrow in Canada, but the rate you get depends mostly on two things: your credit score and whether you can secure the line with your home. Unsecured lines are priced above secured ones, and a home equity line of credit (HELOC) is usually the cheapest because the home backs it. With the prime rate at 4.45%, a rate of prime + 1% comes to about 5.45% and prime + 0.5% to about 4.95%; the spread a lender offers depends on the borrower’s credit, the lender and whether the line is secured.

These rates are negotiable. A lender will often match a competing offer from a credit union or another bank rather than lose the customer, and a borrower who holds a mortgage, chequing account and other products at the same institution has the most leverage, since the bank has the whole relationship to keep. This page is part of the personal loans and lines of credit hub.

What Is a Line of Credit?

A line of credit is a revolving credit facility: a pre-approved limit you can draw from, repay and draw from again. Unlike a personal loan, which pays out a lump sum on a fixed repayment schedule, a line of credit works more like a credit card: you borrow what you need, pay interest only on the amount outstanding, and your available credit comes back as you repay.

That flexibility is both the advantage and the risk. You pay no interest on money you don’t draw, and you can borrow and repay on your own schedule without re-applying. But the minimum payment is often interest only, so the balance doesn’t fall unless you pay more than the minimum. A line of credit used as a permanent float rather than a short-term tool can carry the same balance for years.

Unsecured vs Secured Lines of Credit

Unsecured personal lines of credit need no collateral. The rate depends on your credit history and financial standing, and secured lines typically carry lower rates. Limits are set by each lender: RBC’s unsecured lines start at $5,000, and National Bank’s Integrated line covers $500 to $4,999.

Secured lines of credit are backed by collateral such as the equity in your home (a HELOC) or an investment portfolio, which can mean a higher limit at a lower rate; the trade-off is that the home is at risk on default. HELOC rates by lender, the loan-to-value limits and how a readvanceable mortgage affects switching lenders are covered in best HELOC rates in Canada, and the two products are compared side by side in HELOC vs personal line of credit.

Personal Line of Credit Rates by Lender

The prime rate is 4.45%: the Bank of Canada’s policy rate of 2.25% (last changed in the decision announced October 29, 2025) plus the banks’ usual spread of 2.20 points. Variable line of credit rates are quoted as a spread over prime, so they move whenever prime does.

Credit unions and smaller lenders often quote narrower spreads than the Big 5 banks for borrowers with strong credit, which is why a credit union quote is a useful comparison for a borrower with a score above 720.

Rates are variable and move with prime. Each range runs from the rate for a borrower with an excellent credit profile to the rate for one who just meets the lender’s minimums.

The same lender may offer different spreads over prime to different customers: a published “from” rate goes only to applicants with strong credit, strong income and a low debt-to-income ratio.

Rate by Credit Score

Your credit score moves your line of credit rate more than your income or your choice of lender. A gap of 4 to 5 percentage points in the spread between two borrowers adds $800 to $1,000 a year in interest on a $20,000 balance. Free scores are available from services such as Borrowell and Credit Karma, and full reports from Equifax and TransUnion.

The score factors that change fastest are revolving balances (paying down credit cards and other lines), a clean recent payment record, and few new credit applications in the months before applying. For a borrower just below a tier, a few months of improvement before applying can change the quoted spread.

A Line of Credit vs Other Ways to Borrow

A line of credit trades structure for flexibility: a personal loan has a fixed payment and an end date, while a line of credit lets you set your own pace, including paying interest only. The full three-way comparison, with repayment tables, is in personal loan vs line of credit vs credit card, and the two-way line of credit vs credit card question is covered in the credit cards section.

Interest Cost on $20,000

At today’s prime rate, an example HELOC at prime + 0.5% and an example unsecured line at prime + 3% compare with a typical fixed-rate personal loan and a standard credit card like this:

The table shows interest on an unchanged balance for a year; it doesn’t reduce the debt. Moving a card balance to a line of credit cuts the carrying cost but leaves the principal where it was. Consolidating several debts into one loan or line is covered in debt consolidation loans.

The Minimum Payment Trap

On many lines of credit the minimum payment is the interest for the month. Paying only that leaves the balance exactly where it started, and a modest payment can hide the fact that the debt isn’t shrinking.

Setting an automatic payment at a fixed amount above the minimum turns the line into something closer to a loan. The line of credit calculator works out the daily interest and payments for your own balance and rate.

Getting a Lower Line of Credit Rate

Before applying. A lower spread over prime saves money: each percentage point of spread costs $300 a year on a $30,000 balance, so a gap of 2.5 points is about $750. Keeping credit card utilization below 30% and avoiding several credit applications close together before applying both help.

When applying. A quote from a credit union gives a benchmark to take back to your own bank, and banks often match a competing offer to keep a customer. Holding a mortgage, chequing, savings and investments at one institution can qualify for relationship pricing that isn’t published.

After opening the line. The spread over prime is set in your credit agreement, so it stays the same unless the bank agrees to change it. A borrower whose score has risen can ask for a rate review, quoting the old and new scores.

How to Apply

Most banks take applications for an unsecured line of credit online or in a branch, and some banks give an online decision straight away. A HELOC has more steps, because the lender may need a home appraisal and a lawyer (or notary in Québec) to register the charge on the property.

Documents typically required for an unsecured line of credit:

• Valid government-issued ID
• Proof of income: recent pay stubs or an employment letter if employed, or recent Notices of Assessment if self-employed
• Statements for regular expenses such as mortgage or rent, utilities and taxes, and for other credit you hold

Self-employed applicants show income with tax documents: TD asks for the last two Notices of Assessment, and Scotia accepts a recent Notice of Assessment with the matching T1 General summary. The HELOC application, with its extra property documents, is covered on the HELOC rates page.

When a Line of Credit Fits

A line of credit works best with a clear purpose, a realistic repayment timeline and a rate below the alternative.

Variable Rate Risk

Many lines of credit are variable: RBC’s, for example, rises and falls with its prime rate, and changes in the Bank of Canada’s policy rate lead to similar changes in the prime rate. The 2022 and 2023 rate hikes took the policy rate to 5.00% (announced July 12, 2023), and the prime rate, which banks use as the base for variable-rate pricing, rose with it. Each one-point rise adds $100 a year in interest for every $10,000 owed.

For a balance that will take three to five years to repay, the question is whether a one- or two-point rise would derail the plan; a fixed-rate personal loan removes that risk, sometimes at a slightly higher starting rate. Where rates may go next is covered in the interest rate forecast for Canada, and plans for paying down a line alongside other debts in the debt payoff guide.