Canada’s Readvanceable Mortgage Comparison · Product Mechanics
Most comparisons
are about rate.
This one is about
how they work.
Five Canadian readvanceable mortgages, compared on what they actually do. Not the rate, which is renegotiated every few years and is not published on this site. The mechanics: how much borrowing room comes back for each dollar of principal repaid, whether the total limit survives the decade, how finely the borrowing can be separated, and what the account costs to run. Two products both described as “readvanceable” can behave very differently, and the difference decides whether a strategy works at all.
New to the structure itself? Start with the readvanceable mortgage guide. Already decided and choosing between products? This is the page. Ready to arrange one? Setting one up covers timing, cost and what happens at renewal.
How do Canadian readvanceable mortgage products actually differ?
On four mechanics, none of which is the rate: the re-advance ratio returned per dollar of principal repaid, whether the total authorized limit reduces over time, how many sub-accounts are available for keeping borrowed money separate, and the monthly cost of running the account. BMO Homeowner ReadiLine, Manulife One, MCAP Fusion, Scotia STEP and TD Home Equity FlexLine differ on all four.
| Product | Re-advance ratio | Does the total limit reduce? | Sub-accounts | Monthly fee |
|---|---|---|---|---|
| BMO Homeowner ReadiLine | 1:1 — each dollar of principal repaid adds a dollar of available revolving credit, subject to the permitted limit | No — repaid principal moves borrowing availability into the revolving line rather than the facility declining | Mortgage or instalment portions plus the revolving line of credit; maximum not publicly specified | $0 monthly product fee disclosed |
| Manulife One | 1:1 on a readvanceable sub-account — each dollar repaid creates a dollar of room in the Main Account | No, for readvanceable debt — repaid principal becomes available through the Main Account | Up to 5 term sub-accounts plus up to 15 tracking sub-accounts | $16.95, or $9.95 aged 60 and over; Manulife may offer qualifying clients a waiver on terms that can change |
| MCAP Fusion | Funded on or after Nov 1, 2023: $1,000 of principal returns $1,000 below 65% combined LTV, and $825 between 65% and 80% | Not published on the product page | Not published on the product page | Not published on the product page |
| Scotia STEP | Not published as a ratio; the limit on a designated ScotiaLine Personal Line of Credit increases automatically as the mortgage is paid down | Yes — the STEP Global Limit decreases monthly by an equal amount over 25 years until it reaches 65% of the home’s value | Up to 3 mortgage solutions plus up to 3 line of credit solutions | None published; “no additional fee” to set up with the mortgage |
| TD Home Equity FlexLine | Not published as a ratio; “as you pay it down, credit becomes available up to the credit limit” | Not published on the product page | A Term Portion and a Revolving Portion; maximum count not published | Not published on the product page |
Listed alphabetically by institution, not ranked. MCAP, Scotia and TD figures are quoted from each lender’s current product page. BMO and Manulife figures were confirmed against those lenders’ product materials by Mike Laracy. Where a lender does not publish something, the cell says so — that is information too, and it tells you which question to ask.
Official product sources: BMO Homeowner ReadiLine · Manulife One and its General Terms · MCAP Fusion Mortgage · Scotia Total Equity Plan · TD Home Equity FlexLine
Why is the re-advance ratio the mechanic that matters most?
Because it decides how much borrowing room a mortgage payment actually returns. BMO Homeowner ReadiLine and Manulife One both re-advance one to one. MCAP publishes a different mechanic: on a Fusion Mortgage funded on or after November 1, 2023, $1,000 of principal returns $1,000 below 65 per cent combined loan-to-value but only $825 between 65 and 80 per cent, with the remaining $175 reducing overall debt and unavailable to draw.
For a homeowner using the room as an emergency reserve, an 82.5 per cent re-advance is a footnote. For a household running cash damming or a tax-deductible mortgage strategy, it is the engine. Those strategies work by re-borrowing the principal each payment returns. If only 82.5 cents of each dollar comes back, the cycle runs slower than the arithmetic on the back of the envelope suggested, and it runs slower during exactly the years when equity is thinnest and the plan is newest.
Three things follow, and none of them appears on a rate sheet:
- A reduced ratio is not a defect. It is a design choice, and above 65 per cent combined borrowing it is a conservative one. It matters enormously to a strategy that depends on the cycle and not at all to a homeowner who will never draw the room.
- The ratio can change as equity builds. The MCAP structure returns the full dollar only once combined borrowing drops below 65 per cent of value. A household starting above that line is in the reduced band until it is not.
- Silence is not a promise. Scotiabank and TD do not publish a ratio. That is not evidence of a full re-advance; it is a question to put to the lender in writing before anything is registered.
A rate is renegotiated every few years. A structure often outlives three of them. Structure outlives rate, and the re-advance ratio is structure.
Does a readvanceable credit limit last forever?
It depends on the product, and the five split cleanly. Scotiabank states that after initial setup the STEP Global Limit decreases monthly by an equal amount over 25 years until it reaches 65 per cent of the home’s value. BMO Homeowner ReadiLine and Manulife One do not reduce the authorized facility that way — repaid principal moves availability into the revolving portion instead. TD and MCAP publish no comparable schedule.
This is among the least-discussed facts in Canadian home equity lending, and for Scotiabank it is published in plain sight. The practical consequences:
- Where a limit reduces, room above 65 per cent is temporary by design. A plan that assumes today’s upper limit will still be there in year twelve needs re-checking against the schedule.
- A reducing limit is not automatically the wrong product. It de-levers the household on a timetable, which is prudent for many borrowers and irrelevant to anyone who never intended to use the upper band.
- Home values move the target. These limits step toward a percentage of value, so an appraisal and a schedule both matter.
- Not published is not the same as does not exist. Where a lender publishes no schedule, ask.
The Financial Consumer Agency of Canada’s guide to home equity lines of credit is the neutral starting point on how these products behave generally, including a lender’s ability to change or demand repayment of a credit line.
What happens to borrowing above 65 per cent of the home’s value?
It has to sit in an amortizing portion rather than in the revolving line. The revolving line of credit is capped at 65 per cent of the home’s value, while total borrowing can generally be structured up to 80 per cent subject to qualification. The two caps are not the same number, and the gap between them behaves differently from product to product.
How the two named products handle that band:
- BMO Homeowner ReadiLine. Debt above the permitted revolving limit stays in a mortgage or instalment portion. It amortizes; it is not revolving room.
- Manulife One. Borrowing above 65 per cent is initially held in a non-readvanceable term sub-account. As principal is repaid, that portion reduces until the structure permits readvanceability, at which point the room becomes available through the Main Account.
The consequence for anyone planning a strategy is the same in both cases and worth saying flatly: a household that borrows to the full 80 per cent does not have 80 per cent of revolving room. The first stretch of the plan is spent amortizing down into the band where the structure starts working as intended. That is not a flaw in the product. It is a reason to be honest about the timeline before the paperwork is signed, and a reason the setup guide keeps returning to equity.
Why do sub-accounts matter more than they sound like they should?
Because separating borrowed money by purpose is what keeps it traceable, and tracing is what tax treatment turns on. Manulife One is the most segmented of the five, with up to five term sub-accounts plus up to fifteen tracking sub-accounts. Scotiabank allows up to three mortgage solutions plus up to three line of credit solutions. TD and BMO do not publish a maximum.
The Canada Revenue Agency’s position on interest deductibility rests on being able to link borrowed money to a specific use, and a single account used for two purposes makes that link difficult to establish. The deductibility page works through the CRA’s own example of what happens when borrowed and personal money share one line of credit: a repayment cannot be directed at the personal portion, and both shrink proportionally.
Which turns an apparently dull product feature into a real constraint:
- One purpose per account is the discipline. The number of accounts a product allows is therefore the number of purposes it can keep clean.
- Tracking sub-accounts are useful even without a strategy. A homeowner who wants to see what a renovation, a vehicle and an investment each cost in interest can separate them without taking on any new structure.
- A product with few segments is not unusable. It simply pushes the record-keeping onto the household, and that record-keeping has to survive being read by someone else years later.
Structure is arranged on the mortgage side. The tax filing position stays with your own accountant.
What should a homeowner ask before choosing one?
Six questions decide the outcome, and none of them is the rate: the re-advance ratio, whether the total limit reduces over time, how many traceable sub-accounts are available, the monthly cost of running the account, the full cost of registration and discharge, and what changing lenders later would involve.
- Re-advance ratioHow many cents of each principal dollar come back as available credit, and does that change with the loan-to-value ratio?
- Limit over timeDoes the total authorized limit reduce on a schedule? Over what period, and down to what percentage?
- SegmentationHow many separate sub-accounts can the plan hold? Separation is what keeps borrowed money traceable.
- Monthly costIs there an account fee? If a waiver is offered, on what conditions, and can those conditions change?
- Setup and exitLender fee, legal, registration and appraisal — and what a discharge would cost later.
- PortabilityHow is it registered, and what would moving to a different lender at renewal actually involve?
Get the answers in writing before anything is registered. The request is entirely normal and no reasonable lender resents it.
The product is the tool. The plan is what matters.
No readvanceable mortgage is good or bad in isolation. Each is a structure with particular mechanics, and the mechanics either serve what a household is trying to do or they do not. The Mortgage Wealth Creator™ framework is the planning layer that decides which — and it regularly concludes that a straightforward mortgage is the right answer.
Read the table again with that in mind and the differences stop looking like a scoreboard. A reducing global limit is a problem for a twenty-year strategy and a non-issue for a reserve. Fifteen tracking sub-accounts are indispensable to a documented plan and pointless to a household that will draw the line once. A monthly account fee is noise against a large structure and a real cost against a small one. An $825 re-advance is a design choice that happens to be conservative in exactly the band where conservatism is warranted.
That is why the framework comes before the product and not after it. The sequence matters: work out what the mortgage is supposed to do over the next fifteen years, then choose the structure that can do it, then talk about rate. Doing it in the other order is how households end up with a sophisticated structure they never use and a monthly fee for the privilege.
Working out which column of this table you are actually in is what a Mortgage Wealth Review™ is for. Often the honest answer is that the existing conventional mortgage is doing its job and nothing needs arranging at all.
Mechanics, not
rate sheets.
The product-level questions that decide whether a structure will actually do what a homeowner expects of it.
See all questionsWhich readvanceable mortgage products are compared here?
Five: BMO Homeowner ReadiLine, Manulife One, MCAP Fusion, Scotia STEP and TD Home Equity FlexLine. They are compared on product mechanics rather than on rate — the re-advance ratio, whether the total authorized limit reduces over time, how many sub-accounts are available, and what the account costs to run each month. Rate is renegotiated every few years; structure often outlives several terms. Other readvanceable products exist in Canada and the same questions apply to all of them.
Do all readvanceable mortgages re-advance dollar for dollar?
No, and the difference is written into the product. BMO Homeowner ReadiLine and Manulife One both re-advance one to one: every dollar of principal repaid creates a dollar of available borrowing room, subject to the permitted revolving limit. MCAP publishes a different mechanic — on a Fusion Mortgage funded on or after November 1, 2023, $1,000 of principal returns $1,000 below 65 per cent combined loan-to-value but only $825 between 65 and 80 per cent, with the remaining $175 reducing overall debt and unavailable to draw. Scotiabank and TD do not publish a ratio on their product pages.
Does a readvanceable mortgage credit limit shrink over time?
It depends on the product, and this is one of the least-discussed differences between them. Scotiabank states that after initial setup the STEP Global Limit decreases monthly by an equal amount over a 25-year period until it reaches 65 per cent of the home’s value. BMO Homeowner ReadiLine and Manulife One do not reduce the authorized limit that way — as principal is repaid, the borrowing availability moves into the revolving portion rather than the overall facility declining. TD and MCAP do not publish a comparable schedule.
How many sub-accounts can a readvanceable mortgage have?
Manulife One is the most segmented of the five: up to five term sub-accounts plus up to fifteen tracking sub-accounts. Scotiabank states a STEP can be divided into up to three mortgage solutions plus up to three line of credit solutions. TD describes a Term Portion and a Revolving Portion without publishing a maximum count, and BMO allows mortgage or instalment portions alongside the revolving line of credit with the maximum not publicly specified. Sub-accounts matter because separating borrowed money by purpose is what keeps it traceable.
Do readvanceable mortgages have a monthly fee?
Some do. Manulife One carries an Unlimited Daily Banking fee of $16.95 a month, or $9.95 for clients aged 60 and over, and Manulife may offer qualifying clients ways to have it waived — waiver conditions are program terms that can change and should not be treated as permanent. BMO Homeowner ReadiLine discloses no monthly product fee. Scotiabank states a STEP can be set up with the mortgage for no additional fee. TD and MCAP do not publish fee information on their product pages. Legal, registration and appraisal costs are separate from any lender fee.
What happens to borrowing above 65 per cent of my home’s value?
It has to sit in an amortizing portion rather than in the revolving line. The revolving line of credit portion of a combined mortgage and credit line is capped at 65 per cent of the home’s value, while total borrowing can generally be structured up to 80 per cent subject to qualification. On BMO Homeowner ReadiLine, debt above the permitted revolving limit stays in a mortgage or instalment portion. On Manulife One, borrowing above 65 per cent is initially held in a non-readvanceable term sub-account, and that portion reduces as principal is repaid until the structure permits readvanceability.
Which readvanceable mortgage is best?
There is no best one, and any page that names a winner is guessing on your behalf. Different structures suit different borrowers. A household running a documented strategy needs segmentation and a full re-advance; a homeowner keeping the room as an emergency reserve may care about neither and mind a monthly fee more. The product is the tool. Which tool fits depends on the plan, the equity, the time horizon and the qualification. Mike Laracy compares structures for Ontario homeowners as a Mortgage Agent Level 1 with Evolv Mortgage Group.
This page is education, not advice. Talk to a qualified tax professional before implementing any tax-related mortgage strategy. Results shown are hypothetical illustrations only. Borrowing to invest involves risk. Read the full disclaimer.