Estimating Your Available Home Equity in Quebec
Your property equity is a valuable asset that can serve several financial objectives: financing renovations, consolidating high-rate debts, investing in rental property, or building an emergency fund. Before planning how to use it, you must first estimate it correctly. Here is how to proceed in Quebec without immediately resorting to a professional appraiser.
- Home equity
- The difference between your property's current market value and the total balance of all debts secured by it (mortgage, home equity line of credit). Equity increases as you repay your loan and as your property's value appreciates on the market.
Three-step estimation method
- Estimate your property's market value: Start with the municipal assessment roll, available online from your municipality's website. This roll is generally updated every three years in Quebec and may lag behind the market. Adjust 10 to 20% upward to reflect current conditions. Then check recent comparable sales on Centris.ca, filtering by neighbourhood, property type, and similar square footage. Finally, request a value opinion from a local real estate broker, a service generally offered for free.
- Subtract the total mortgage balance: Check your mortgage statement for the exact remaining balance, including principal and accrued interest. If you have a home equity line of credit, add the used balance. The result is your gross equity, the value that truly belongs to you in your property.
- Calculate equity accessible through refinancing: OSFI limits refinancing to 80% of market value. Multiply the estimated value by 0.80, then subtract your current balance. This amount is the maximum equity you can access through conventional mortgage refinancing. For a loan-to-value ratio above 80%, CMHC, Sagen, or Canada Guaranty mortgage insurance would be required, but it is not available for refinancing.
Refinancing vs home equity line of credit
Two main vehicles allow you to access your equity. Mortgage refinancing replaces your current loan with a larger new loan, providing you with a lump sum. The advantage is a potentially lower fixed rate and predictable payments. A home equity line of credit gives you flexible access to your funds, with a variable rate generally set at prime plus 0.50%. You only pay interest on the amount used, making it an excellent tool for occasional needs or an emergency fund.
Factors that influence your accessible equity
- Real estate market appreciation in your area increases value and therefore your equity, but this appreciation is only confirmed at the time of official appraisal by the lender
- Major renovations (kitchen, bathroom, addition) add value, but rarely dollar for dollar: expect to recover 50 to 75% of the cost in added value
- Your regular payments and prepayments reduce the balance and mechanically increase your equity each month
- The lender will require its own appraisal during refinancing, costing $300 to $500, though some lenders accept an automated valuation at no cost
An AMF-certified broker evaluates your accessible equity considering the realistic value of your property, your requalification capacity under OSFI standards, and the costs associated with refinancing. This free analysis gives you a clear picture of your options before making a decision.