Line of Credit Calculator (Canada)
This line of credit calculator for Canada shows the interest-only payment on a HELOC or LOC, the payment with principal added, and months to pay it off.
What it does
The Line of Credit Calculator shows the interest-only monthly payment on a Canadian HELOC or personal line of credit, the larger amortizing payment once you add principal, and how many months a fixed principal top-up takes to clear the balance.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
interest-only = balance x rate / 12; amortizing = interest-only + principal; each month: balance = balance + balance x (rate / 12) - amortizing, repeated until balance = 0
How it works
It converts your annual rate to a monthly rate and multiplies it by the drawn balance to find the interest-only payment. Adding your chosen principal gives the amortizing payment, and the tool then simulates the balance month by month until it reaches zero.
Where it is used
- Seeing the minimum interest-only cost of carrying a HELOC balance
- Working out how fast a fixed principal top-up clears the line
- Comparing interest-only carrying cost with a real repayment plan
Worked example
Carrying CA$60,000.00 at 6% costs … a month in interest alone. Adding CA$500.00 of principal lifts the payment to … and clears the balance in … months.
Because the lender usually asks only for the interest each month, a line of credit balance can sit unchanged for years. The calculator shows three numbers: the interest-only payment that keeps the account current, the larger payment once you add principal, and how many months that payment takes to clear the debt.
How the calculator works
Enter the balance drawn, the annual rate and the extra principal you plan to pay each month. The tool divides the annual rate by twelve, multiplies by the balance for the interest-only payment, and adds your principal for the full payment. It then steps through the balance month by month, adding interest and subtracting your payment, until it reaches zero, counting the months and totalling the interest.
Interest-only versus paying down principal
The interest-only payment covers the cost of the money but leaves the balance untouched. On $60,000 at 6% it is $300 a month, and paying it forever leaves you owing the full $60,000, at a cost of $3,600 a year. Add $500 of principal and the payment becomes $800, of which $500 reduces the balance in the first month. As the balance falls, interest shrinks, more of each payment goes to principal, and the payoff speeds up.
A worked example
$60,000 drawn on a HELOC at 6% with $500 of principal a month: the payment is $800, the balance clears in 95 months (just under eight years), and total interest is about $15,389, so you repay about $75,389 in all. With the default inputs, $50,000 at 8% with the same $500 of principal ($833.33 a month), the balance clears in 77 months with about $14,066 of interest. Raising the principal payment shortens the timeline and cuts interest sharply.
Why lines of credit are usually variable-rate
Most Canadian lines of credit, and almost all HELOCs, are priced at the lender’s prime rate plus a margin, so the rate moves when the Bank of Canada changes its policy rate. A line at 6% today could cost 7.5% after a couple of increases, raising the interest-only payment and slowing any payoff plan. Test a comfortable rate and a stress-test rate.
Secured and unsecured lines
A home equity line of credit is secured against your home, usually carries a lower rate, and is limited by OSFI rules to 65% of the property’s value as a revolving facility. An unsecured personal line of credit charges more because the lender has no collateral. Disclosure and cost-of-borrowing rules fall partly under provincial consumer protection law, so the notices you receive can differ by province.
Using a line of credit responsibly
Because you can redraw what you repay, it is tempting to treat a HELOC as permanent and pay only interest, which keeps the account current but exposes you to years of interest and to rising rates. Treat the line like a loan: choose a principal amount you can sustain, set it as an automatic payment, and avoid redrawing unless necessary.
Common mistakes
- Mistaking an account that is current for progress; the balance falls only when you pay more than the interest.
- Redrawing what you repay.
- Planning only at today’s rate.
- Ignoring annual, setup or appraisal fees.
Assumptions and limitations
This is a planning estimate. It assumes a constant rate, a fixed payment and interest charged monthly on the balance. Real lines of credit are usually variable, minimum payments are set by the lender, and fees are not modelled. Treat the results as a guide to how quickly a steady payment clears the balance, not a lender’s statement.
About This Tool: Line of Credit Calculator Canada
Line of credit calculator Canada: use this tool to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
What is the interest-only payment on a line of credit?
Why does an interest-only line of credit never get paid off?
How is a HELOC different from a mortgage?
What interest rate should I enter?
Does this calculator include fees?
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