Protected HELOC® vs HELOC: Which Is Better for Canadians 60+?
For many Canadians age 60 and over, accessing home equity is one of the best ways to create financial flexibility without selling your home. Two options often compared are a traditional Home Equity Line of Credit (HELOC) and the Protected HELOC®.
While both allow you to borrow against your home, they work very differently. This guide explains the key differences so you can decide which option fits your retirement lifestyle best.
What Is a Traditional HELOC?
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured against your home. It works like a credit card with a large limit: you can borrow, repay, and borrow again.
Key features of a standard HELOC:
Requires monthly interest payments
Interest rate is variable and tied to prime
Full recourse: if your home value doesn’t cover the loan, the bank can pursue other assets
The bank can reduce, freeze, or recall your HELOC at any time
Subject to renewals and re-qualification at the end of each term
Readvanceable: if you pay down the balance, your limit refreshes
What Is the Protected HELOC®?
The Protected HELOC® is a new option designed specifically for Canadians 60+. It combines the flexibility of a HELOC with the security of contractual guarantees.
Key features of the Protected HELOC®:
No required monthly payments — pay full interest, partial, or nothing at all
Fixed-rate lock-ins for up to 5 years at best available rates
Non-recourse with no-negative-equity guarantee — your estate will never owe more than the fair market value of the home
Borrowing limit is protected for life as long as you meet obligations (taxes, insurance, upkeep)
Readvanceable: your approved limit refreshes if you pay down
Cannot be recalled, frozen, or reduced if obligations are met
Pre-approval form in 90 seconds, answer in 24 hours, funds in 21 days
Why This Matters for Canadians 60+
In retirement, banks often see you as a “higher risk” borrower because income is lower. This makes traditional HELOCs less reliable:
You may fail re-qualification at renewal.
The bank can reduce or freeze your limit, often when you need it most.
Monthly interest payments strain cash flow.
The Protected HELOC® solves these issues by guaranteeing your approved limit for life and allowing you to choose when and how to make payments.
Real-Life Example
Bank HELOC: John and Susan (67, Ontario) had a $250,000 HELOC. At renewal, their bank required re-qualification. Because their income had dropped in retirement, their limit was cut to $125,000.
Protected HELOC®: If they had a Protected HELOC® with a $250,000 limit, that limit would remain contractually guaranteed for as long as they lived in their home and met obligations.
Key Takeaways
A bank HELOC can work well before retirement but becomes riskier at age 60+.
The Protected HELOC® offers flexibility, security, and peace of mind for older homeowners.
Both are readvanceable, but only the Protected HELOC® guarantees your borrowing limit for life.
Frequently Asked Questions
Does the Protected HELOC® affect CPP, OAS, or GIS?
No. All withdrawals are tax-free and not counted as income.
Can the bank reduce my Protected HELOC® limit?
No. Once approved, your borrowing limit is contractually protected as long as you meet obligations.
Do I have to make payments every month?
No. You can choose to pay full interest, partial interest, or no payments at all.
What happens if my home value drops?
The no-negative-equity guarantee means you or your estate will never owe more than the fair market value of your home at sale.
Next Step
Download the free Protected HELOC® Guide to see how Canadians 60+ are using this option to:
Eliminate debt or mortgage payments
Cover everyday expenses or healthcare
Support children or grandchildren
Avoid selling investments during market downturns
