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What Is a HELOC and Is It Right for You?

A Home Equity Line of Credit (HELOC) lets you tap your home's equity like a flexible credit line. Our AI advisor explains how HELOCs work, helps you compare options, and answers any question — free, in seconds.

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No credit pull · No sign-up · NMLS #1598577

How a HELOC Works

1
Draw Period (usually 10 years)
Borrow as much or as little as you need, up to your credit limit. Pay interest only on what you use. Repay and borrow again — works like a credit card backed by your home.
2
Repayment Period (usually 20 years)
The line closes and you repay the outstanding balance — principal + interest — typically in fixed monthly payments over 20 years.
3
Variable Rate
Most HELOCs have rates tied to the prime rate. When the Fed raises rates, your HELOC rate rises too. Some lenders let you lock a portion at a fixed rate.

HELOC vs. Home Equity Loan

Structure📊 Revolving credit line🏦 Lump sum
Rate type📊 Variable (usually)🏦 Fixed
Best for📊 Ongoing expenses, renovations🏦 One-time large purchase
Payment📊 Interest-only during draw🏦 Principal + interest from day one

Common HELOC Questions

How much can I borrow with a HELOC?→What are current HELOC rates?→HELOC vs home equity loan — which is better?→Can I get a HELOC with bad credit?→Is HELOC interest tax deductible?→What happens to my HELOC if I sell my house?→

HELOC FAQs

How much can I borrow with a HELOC?

Most lenders allow you to borrow up to 85% of your home's value minus what you owe. If your home is worth $500,000 and you owe $300,000, you may qualify for up to $125,000 ($500K × 85% − $300K).

What credit score do I need for a HELOC?

Most lenders require 620–680 minimum. Rates improve significantly at 720+. You'll also need at least 15–20% equity and a debt-to-income ratio below 43%.

Is HELOC interest tax deductible?

HELOC interest may be deductible if used to buy, build, or substantially improve your home. Interest used for other purposes (debt consolidation, vacations) is generally not deductible. Consult a tax advisor for your situation.

What happens to my HELOC if I sell my house?

You must pay off your HELOC at closing. The balance is paid from the sale proceeds before you receive your equity. Plan ahead if you have a large outstanding balance.

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NMLS #1598577 · For informational purposes only · Not financial advice