A HELOC gives you a revolving line of credit backed by your home equity. Draw funds when you need them, repay and draw again — like a credit card, but at mortgage rates.
HELOC at a Glance
HOW IT WORKS
A HELOC works in two phases — a draw period where you access funds, and a repayment period where you pay back what you borrowed.
Access your credit line whenever you need it. Draw $5,000 for a bathroom remodel, then $20,000 for a kitchen — or draw the entire amount at once. You only pay interest on what you've borrowed.
Example: $100,000 HELOC, drew $40,000
Monthly payment: interest on $40,000 only (~$200–$250/mo at 6%)
After the draw period ends, you can no longer draw funds. The outstanding balance becomes a fully amortizing loan — you pay both principal and interest over the repayment term.
Example: $40,000 balance, 20-year repayment
Monthly payment: ~$290/mo (principal + interest at 6%)
USE CASES
A HELOC is ideal for ongoing or unpredictable expenses — where you need flexibility rather than a lump sum.
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Perfect for multi-phase projects where you need to draw funds over time — kitchen first, then bathrooms, then landscaping. Pay as you go instead of borrowing the full amount upfront.
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Draw tuition each semester as needed rather than borrowing the full 4-year cost. Pay interest only on what's used, and rates are far lower than student loans.
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Pay off high-interest credit cards at mortgage rates. A $30,000 credit card at 22% APR vs a HELOC at 7% saves over $4,000/year in interest.
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Open a HELOC now and only use it if you need it. There's no cost to have an unused credit line — just peace of mind knowing funds are available.
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Use your HELOC as a down payment on a rental property. Leverage your existing equity to grow your real estate portfolio without liquidating savings.
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Fund business startup costs, equipment, or expansion using your home equity at rates far below a business line of credit or SBA loan.
COMPARISON
Not sure which is right for you? We'll run both scenarios and show you exactly which saves more money in your situation.
85%
Max LTV Available
10yr
Typical Draw Period
$12B+
Loans Funded
4.9★
Customer Rating
FAQ
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