The Ramsey Show tears apart a TikToker's HELOC mortgage repayment hack — and Canadian homeowners should pay attention

“I’m very hesitant about it,” Brooke told the hosts. “In fact, my family gives me the name ‘dream crusher’ because I’m just not a risk-taker.”

Warshaw and Delony were squarely in her corner. And if you’re a Canadian homeowner eyeing similar social media strategies, it’s worth understanding their reasoning.

What is a first-lien HELOC — and does it exist in Canada?

In the U.S., a first-lien HELOC is a line of credit that completely replaces an existing mortgage, moving into the primary lien position on the property. Unlike a standard HELOC — which acts as a second mortgage — a first-lien HELOC becomes the main secured debt against the home.

In Canada, this product isn’t offered by major banks in the same form. The closest Canadian equivalent is the readvanceable mortgage, also called a combined loan plan (CLP). Products like TD’s Home Equity FlexLine and CIBC’s Home Power Plan blend a traditional amortizing mortgage with a revolving HELOC component. As borrowers pay down the mortgage portion, available HELOC credit increases.

Critically, Canadian regulators monitor HELOCs closely: The Office of the Superintendent of Financial Institutions (OSFI), Canada’s top banking regulator, caps standalone HELOCs at 65% of a home’s appraised value for federally regulated lenders. Combined mortgage and HELOC products can’t exceed 80% of the home’s value.

Like their U.S. counterparts, Canadian HELOCs carry variable interest rates tied to the lender’s prime rate. As of June 2026, Canada’s prime rate sits at 4.45%, following the Bank of Canada’s decision to hold its overnight rate at 2.25% — its fifth consecutive hold. Most Canadian banks price HELOCs at prime plus a spread — typically prime + 0.50%, putting current rates at approximately 4.95% for well-qualified borrowers.

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‘No possible win’: What The Ramsey Show found wrong with the plan

When Warshaw asked what the purpose of the first-lien HELOC actually was, Brooke was direct: Pay off the house before retirement. The TikToker her husband followed claimed it could be done in three to six years.

“Hey, here’s my big problem number one, Brooke: Your husband’s quote, ‘following a TikToker,’” Delony laughed on the show.

The numbers made the hosts’ skepticism sharper. Brooke’s mortgage carries a 2.75% interest rate. The HELOC she was being pitched came with a current rate of 8% — and it was variable.

“That’s scary,” Warshaw said, when she heard the rate was variable on top of the higher percentage point.

Delony put it plainly: “There’s no way you’re going to get a better interest rate. It’s a credit card at a variable rate that’s higher than your mortgage. Like, there’s no possible win here.”

He also flagged a psychological risk: the temptation to spend from a revolving line of credit. “You’d have to be superhuman to never spend this line of credit,” he said.

“It’s just total madness,” Delony concluded.

The hosts’ advice to Brooke was straightforward: Write out a plan showing exactly how much she and her husband would need to pay each month to retire their mortgage in 72 months — and then ask her husband to run the same numbers on the HELOC, factoring in the possibility that variable rates could rise even more.

Why the math cuts even more clearly for Canadians

The core problem in Brooke’s situation applies directly north of the border: Trading a fixed, low-rate mortgage for a variable, higher-rate product creates more risk, not less — no matter how compelling the social media pitch sounds.

In Canada, the gap between a locked-in fixed mortgage rate and a HELOC is different from The Ramsey Show call, but the underlying logic is the same. Canadian HELOC rates currently sit around 4.95% (prime + 0.50%) — higher than most fixed mortgage rates Canadians locked in over the past several years. And unlike a fixed mortgage, a HELOC rate moves every time the BoC adjusts its overnight rate. As of June 2026, BoC has signalled that rate hikes remain a risk for the second half of the year, driven by energy-price inflation.

There’s also a key structural reality that Canadian borrowers should understand: OSFI’s B-20 guideline means a HELOC can’t replace a mortgage the way a first-lien HELOC does in the U.S. If a Canadian homeowner wants to use a readvanceable mortgage product like TD Home Equity FlexLine, the amortizing mortgage portion still exists — meaning the HELOC component is additive, not a substitute.

And despite holding approximately $6.1 trillion in home equity as of Q3 2025, Canadians’ track record with HELOCs is cause for concern: The FCAC found that more than 25% of HELOC holders pay only the interest or the minimum amount.

What Canadian homeowners should know

If your goal sounds like Brooke’s — to pay off your mortgage before retirement — there are proven strategies that don’t require swapping a stable fixed rate for a variable line of credit.