What is a good line of credit rate in Canada?

A good unsecured personal line of credit rate in Canada is prime + 1% to prime + 3% (approximately 5.95–7.95% in 2026). Secured lines of credit (backed by your home) offer lower rates of prime + 0.5% to prime + 1%. Your rate depends on your credit score, income, and relationship with the lender.

Is a line of credit better than a personal loan?

A line of credit is better if you need flexible, ongoing access to funds and only want to pay interest on what you use. A personal loan is better for a one-time fixed expense because it has fixed payments, a set repayment timeline, and potentially a lower rate. LOCs require more discipline since the revolving nature can lead to carrying a balance indefinitely.

How do I qualify for a line of credit in Canada?

Most banks require a credit score of 660+ (680+ for the best rates), stable income, a low debt-to-income ratio (under 40%), and clean credit history. Secured LOCs (using home equity) have easier approval since they are backed by collateral, but require sufficient home equity (usually 20%+).

Best Line of Credit Rates in Canada 2026

Best Personal Line of Credit Rates

Unsecured Personal Lines of Credit

Lender	Rate	Minimum Credit Score	Minimum Income	Credit Limit
Desjardins	Prime + 1.0–3.5%	680+	Varies	$5,000–$50,000
National Bank	Prime + 1.0–4.0%	680+	Varies	$5,000–$50,000
Credit unions (avg)	Prime + 1.0–4.0%	660+	Varies	$5,000–$50,000
TD	Prime + 1.5–5.0%	680+	$35,000+	$5,000–$50,000
RBC	Prime + 2.0–5.0%	680+	$35,000+	$5,000–$50,000
BMO	Prime + 2.0–5.5%	680+	$35,000+	$5,000–$50,000
Scotiabank (ScotiaLine)	Prime + 2.0–5.0%	680+	$35,000+	$5,000–$50,000
CIBC	Prime + 2.0–5.5%	680+	$35,000+	$5,000–$50,000
Tangerine	Prime + 1.5–5.0%	700+	Varies	$1,000–$50,000
Simplii	Prime + 2.0–5.0%	680+	Varies	$5,000–$50,000

Prime rate as of March 2026: ~4.95%. Rates are variable and change with the Bank of Canada rate.

Secured Lines of Credit (Home Equity)

Lender	Rate	LTV Maximum	Minimum Equity	Credit Limit
TD (HELOC)	Prime + 0.5–1.0%	65%	35% equity	$10,000–$500,000+
RBC Homeline	Prime + 0.5–1.0%	65%	35% equity	$10,000–$500,000+
BMO Homeowner ReadiLine	Prime + 0.5–1.0%	65%	35% equity	$10,000–$500,000+
Scotiabank STEP	Prime + 0.5–1.0%	65%	35% equity	$10,000–$500,000+
CIBC Home Power	Prime + 0.5–1.0%	65%	35% equity	$10,000–$500,000+
National Bank	Prime + 0.5–1.0%	65%	35% equity	$10,000–$500,000+
Desjardins	Prime + 0.5–0.7%	65%	35% equity	$10,000–$500,000+
Credit unions	Prime + 0.5–1.0%	65–80%	20–35% equity	$10,000–$250,000+

Rate by Credit Score

Credit Score	Unsecured LOC Rate	Secured LOC Rate
760+ (excellent)	Prime + 1.0–2.0%	Prime + 0.5%
720–759 (very good)	Prime + 2.0–3.0%	Prime + 0.5–0.7%
680–719 (good)	Prime + 3.0–5.0%	Prime + 0.7–1.0%
660–679 (fair)	Prime + 5.0–7.0%	Prime + 1.0–1.5%
Below 660	Likely declined	May qualify with strong equity

Line of Credit vs Other Borrowing Options

Feature	Unsecured LOC	Secured LOC (HELOC)	Personal Loan	Credit Card
Typical rate	Prime + 1–5%	Prime + 0.5–1%	6.99–12.99% (fixed)	19.99–22.99%
Rate type	Variable	Variable	Fixed or variable	Fixed
Access to funds	Revolving	Revolving	Lump sum	Revolving
Repayment	Interest-only minimum	Interest-only minimum	Fixed monthly	Minimum payment
Collateral	None	Home equity	None	None
Best for	Flexible ongoing needs	Large borrowing, low rate	One-time fixed expense	Short-term convenience

Interest Cost Comparison: $20,000 Borrowed

Borrowing Option	Rate	Monthly Interest	Annual Interest Cost
HELOC	5.45%	$91	$1,090
Unsecured LOC	7.95%	$133	$1,590
Personal loan (fixed)	9.99%	$167	$1,998
Credit card	20.99%	$350	$4,198
Payday loan equivalent	390%+	$6,500+	N/A (short-term)

How to Get the Best LOC Rate

Strategy	Potential Impact
Have a credit score of 750+	Access best rate tiers
Bank where you have your mortgage	Loyalty negotiating leverage
Ask for rate matching	Banks will often match competitor offers
Consolidate banking (chequing + savings + mortgage)	Bundle discounts
Opt for a secured LOC if you own a home	~2–4% lower rate
Apply at a credit union	Often 0.5–1% lower than Big 5 banks
Negotiate at renewal/review	Annual rate reviews are an opportunity
Maintain a low utilization ratio	Using less than 30% of limit helps maintain rate

LOC Minimum Payments: The Trap

Balance	Interest Rate	Interest-Only Payment	Time to Pay Off (Interest-Only)
$5,000	7.95%	$33/month	Never (balance doesn’t decrease)
$10,000	7.95%	$66/month	Never
$20,000	7.95%	$133/month	Never
$50,000	7.95%	$331/month	Never

Most LOCs only require interest-only payments, meaning you’ll never pay down the balance unless you actively pay more than the minimum. Set up automatic payments above the minimum to pay down principal.

Repayment Schedule: $20,000 at 7.95%

Monthly Payment	Time to Pay Off	Total Interest Paid
$133 (interest only)	Never	Infinite
$250	10 years, 2 months	$10,408
$400	5 years	$4,025
$600	3 years	$2,558
$1,000	1 year, 9 months	$1,516

When to Use a Line of Credit

Good Uses	Bad Uses
Emergency fund backup	Everyday spending
Home renovations (HELOC)	Vacations
Debt consolidation (lower rate)	Keeping up a lifestyle you can’t afford
Bridge financing (short-term)	Investing (unless Smith Manoeuvre strategy)
Self-employed income smoothing	Paying minimum bills on other debts
Education costs	Impulse purchases