Home Equity Line of Credit (HELOC)
A flexible, revolving line of credit secured by your home's equity. Borrow what you need, when you need it.
Check Home Equity Line of Credit (HELOC) RatesWhat is a Home Equity Line of Credit (HELOC)?
A HELOC functions much like a credit card. You are approved for a maximum credit limit based on your home's equity. During the "draw period" (usually 10 years), you can withdraw funds as needed and only pay interest on what you borrow.
After the draw period ends, the "repayment period" begins (usually 10-20 years), during which you can no longer borrow money and must pay back the principal and interest.
Who is this for?
Homeowners facing ongoing expenses, like a multi-stage home renovation or college tuition, who want the flexibility to borrow in increments.
Pros
- Only pay interest on the money you actually draw
- Funds are available whenever you need them during the draw period
- Lower interest rates than credit cards
- Keeps your primary mortgage (and its low rate) untouched
Cons
- Interest rates are variable and can increase
- Your home is collateral and at risk if you default
- Payments can jump significantly when the repayment period begins
- Lenders can freeze or reduce your line of credit if home values drop
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