Two lines of credit.
One of them is tied to your house.

A physician line of credit (PLOC) is unsecured: it is approved on your training and career, and no property backs it. A home equity line of credit (HELOC) is secured by your home, can reach up to 65% of the home value, and often carries a lower rate than unsecured credit, but the lender can take the home if it is not repaid and can lower the limit at any time. Use the PLOC while you do not own, and consider a HELOC only once you have the equity, a repayment plan, and a clear reason to put the debt against your house.

Both are revolving credit. You draw what you need, pay interest only on what is drawn, repay, and draw again. The difference is what stands behind the line.

A PLOC is unsecured. A lender approves it because of where your career is heading, which is why a resident with a stipend and student debt can hold one. Nothing is registered against property, so missing payments damages your credit but does not put a house on the line.

A HELOC is secured by your home. The Financial Consumer Agency of Canada puts it plainly: the home is collateral, and if you do not pay back what you owe, the lender may take possession of it. If you sell, the HELOC has to be repaid from the sale. In exchange for that security, HELOCs often carry lower rates than unsecured loans and credit cards.

A PLOC limit is set by the lender based on your training stage and specialty, not on anything you own. A HELOC limit comes from your house.

On a HELOC you may borrow up to 65% of the home's value. There are two kinds. A HELOC combined with a mortgage, sometimes called a readvanceable mortgage, needs at least 20% equity and has to sit with the lender that holds your mortgage; the available credit grows as you pay down principal. A standalone HELOC needs more than 35% equity, can be with a different lender from your mortgage, and does not grow as you pay the mortgage down.

The federal consumer agency uses this example for equity: a home valued at $500,000 with $200,000 left on the mortgage has $300,000 of equity, which is 60% of its value. Its example for total borrowing: on a $250,000 home the usual maximum against the property is $200,000, so with $150,000 owing on the mortgage, $50,000 is left to borrow.

This is where physicians get surprised. Under the physician program rules this site works from, student loans and the professional line of credit count in your debt ratios even when they are not in repayment. The lender ignores your real interest-only payment and counts a payment at the minimum qualifying rate of 5.25% over a 15-year amortization, which is 180 months.

A HELOC balance also counts against your ratios, and so does the HELOC itself when you apply for it: you have to pass the stress test at a bank, which tests payments at the greater of your contract rate plus 2% or 5.25%. How a lender turns a HELOC balance into a monthly figure varies by lender, so ask for the calculation on your own file before you move a balance.

The practical point: moving debt from a PLOC to a HELOC does not make it disappear from your ratios. It changes what secures it and what it costs you, not the fact that a lender will count it.

The PLOC fits when

• You do not own a home yet, or you have little equity. The PLOC is the line you can actually get.
• You want the down payment, closing costs or a cash buffer without registering anything against a property.
• You expect to sell within a few years. A HELOC would add set-up and discharge costs for a short life.

A HELOC can fit when

• You have the equity: 20% for a line combined with your mortgage, more than 35% for a standalone line.
• You carry a balance you will take years to repay and the lower cost is worth securing it against the house.
• You have a written repayment plan. Interest-only payments never pay off the balance.

1. Write down your PLOC balance and what it counts for in the ratios: 5.25% over 180 months.
2. Check your equity. Take your home value, subtract your mortgage balance, and see whether you clear 20% or 35%.
3. Ask the lender for every HELOC fee in writing: appraisal, legal, title search, monthly or administration fees, and the cost to cancel or discharge.
4. Ask how the lender will count the HELOC balance on your next mortgage application or renewal.
5. Plan for a variable rate. Both lines usually follow the lender's prime rate, and a federally regulated lender must tell you in writing within 30 days of a change.
6. Set a repayment schedule that pays more than interest.

If you are an Ontario physician weighing a HELOC against your PLOC, bring both balances and your home value to a call. The math on your file is quick to run, and it settles the question better than a general rule.

Figures in this guide come from the sources below. Each entry shows the date the source published it, or the date it was accessed when the source does not state one. The page carries a review-by date; after November 2027 treat any number as a starting point and check the source.