# MCAP Fusion HELOC — verified terms, the limit you can actually draw, and the risks (25 Oct 2026)

## The product, verified from MCAP's own documents
MCAP **Fusion** is a **Combined Loan Plan (CLP)** — a mortgage plus a revolving line of credit registered as
one charge. Key terms, from mcap.com and MCAP's Fusion product sheet:

- **Revolving LOC limit: up to 65% of the home's value.** Combined mortgage + LOC: up to **80%**.
- **Automatically readvanceable.** Principal you pay down on the mortgage becomes available credit:
  - combined LTV **≤ 65%** → readvances **1:1** ($1,000 principal paid = $1,000 more LOC room)
  - combined LTV **65-80%** → readvances at **82.5%** ($1,000 paid = $825 more LOC room; the other $175 is
    locked in as permanent debt reduction)
- **No penalty to pay off the LOC segment at any time.** Interest-only payments allowed on the LOC.
- Mortgage segments keep normal penalties; prepayment privilege is 20% of original principal per year plus a
  20% payment increase.
- **Minimum loan $50,000**; maximum uninsurable $2M in the GTA. Owner-occupied only.
- **Qualification: minimum 650 credit score, GDS/TDS 39%/44%**, and the HELOC limit is qualified at
  **contract rate + 2%** (or the MQR, whichever is higher) — not at the actual rate.

## The number that actually matters — and the mistake to avoid
**Available HELOC = (65% × home value) − current mortgage balance.**

MCAP's own HELOC blog page gets this wrong in its worked example: it states the 65% revolving cap and then
calculates the limit as *(80% × value) − mortgage balance*. Using 80% overstates your room by **15% of your
home's value** — on a $900,000 home that is $135,000 of credit that does not exist, and a plan built on it
fails at the commitment stage. Use 65%.

## Price
- **Prime + 0.50%** is MCAP's Fusion LOC pricing (the launch rate, and the standard structure across
  mainstream lenders). At today's prime of **4.45%** that is **4.95%**.
- **Prime is 4.45%** (Bank of Canada overnight target 2.25% + the standard 220 bp bank spread), unchanged
  since the BoC held on **2 September 2026**.
- **The next BoC decision is 28 October 2026 — three days from now.** If a HELOC at prime + 0.50% is the
  plan, waiting three days costs nothing and could reprice the whole loan. Fixing the rate before that
  announcement is a coin-flip you do not need to take.

## Documents MCAP requires
- **Fully qualified income documentation** (this is a requalification, not a courtesy — T4s/NOAs and
  employment letters, or business financials if self-employed through the clinic corporation).
- **AVM or appraisal** — MCAP orders it after the signed commitment and **covers the cost on funded files**.
- Payout authorization, current mortgage/renewal agreement, **fire insurance particulars**, insurer
  certificate (if the mortgage is insured), and **proof municipal and school taxes are paid and current**.
- Discharge fee covered by MCAP up to $300 on transfers.

## The two things that can sink this plan
1. **Interest deductibility is not automatic.** Under ITA s.20(1)(c) interest is deductible only where the
   borrowed money is used to earn income from a business or property **with a reasonable expectation of
   income** — capital gains do not count (Shell Canada, Ludco, Singleton). Borrowing to buy a leveraged ETF
   chosen for growth is the classic CRA denial fact pattern. If the QLD position pays little or no
   distribution, assume **no deduction** and model the 4.95% as an after-tax cost.
2. **Which QLD is it?** ProShares **Ultra QQQ (QLD)** is US-listed 2x leveraged — not permitted inside a
   TFSA/RRSP, and 2x daily resetting means a 4.95% HELOC against it is leverage on leverage. BetaShares
   **QLD** is ASX-listed and is not available through Questrade or Wealthsimple at all — only a broker with
   ASX access (IBKR, for example) plus AUD FX. That changes the mechanics before the borrowing does.

## What to ask MCAP on the call
1. What is my **actual available limit at 65%** once the current balance is subtracted — in writing?
2. What rate, and is it **prime + 0.50%** or a negotiated spread, and is it fixed or floating?
3. Is the **availment a new charge or an increase to the existing Fusion charge** (this decides whether there
   are legal fees at all)?

Sources: mcap.com Fusion Mortgage product page; MCAP/FCT Fusion product sheet (qualification, documents,
penalties, limits); MCAP HELOC blog page; Bank of Canada policy rate table (2.25%, held 2 Sep 2026, next
announcement 28 Oct 2026).