HELOCs and home equity loans
Put your home's equity to work without refinancing
Borrow against the value you've built for renovations, big expenses or investments — as a flexible line of credit or a fixed-rate lump sum — while keeping your current mortgage.
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Two ways to use your equity
Both are second loans secured by your home. Pick the one that matches how you'll spend the money.
HELOC (line of credit)
Borrow what you need, when you need it.
- Variable interest rate
- Draw period, often 10 years
- Interest-only payments possible during the draw period
- Suits ongoing projects and expenses
- Reusable as you pay down the balance
Home equity loan
Get all the funds at once with fixed payments.
- Fixed interest rate
- Predictable monthly payments
- One-time lump sum
- Suits large one-time expenses
- Terms from 10 to 30 years
Common uses for home equity
Home improvements
Debt consolidation
Education and investments
How a HELOC works
- 1
Apply
Share your income, assets and home details.
- 2
Get approved
Your credit limit is set by your available equity and qualifications.
- 3
Draw funds
Borrow what you need, when you need it, during the draw period.
- 4
Repay
Interest-only payments may be allowed while drawing, then principal and interest.
HELOC questions
A HELOC is a revolving line of credit you can draw from as needed, similar to a credit card. A home equity loan provides a lump sum upfront with fixed monthly payments. HELOCs offer more flexibility, while home equity loans provide payment certainty.
Many lenders allow up to about 85% of your home's value, minus what you owe. A $500,000 home with a $200,000 mortgage could support a line of up to $225,000, subject to appraisal and credit.
HELOC rates are usually variable and tied to the prime rate, so they move with the market. Your rate depends on your credit score, combined loan-to-value and the lender. We'll quote current options for your situation.
Generally, yes — home improvements, debt consolidation, education expenses, emergency reserves or investments. Keep in mind the line is secured by your home. Interest may be tax-deductible when the funds are used to buy, build or substantially improve the home; ask your tax advisor how the rules apply to you.
HELOCs typically have a draw period — often 10 years — when you can borrow and repay, followed by a repayment period, often 20 years. During the draw period you may only need to pay interest; during repayment you'll pay principal and interest, so the payment usually rises.
Find out how much equity you can access
Start online and Andrew will compare a HELOC, a home equity loan and a cash-out refinance for your home.