Mortgage

HELOC (Home Equity Line of Credit) A revolving credit line secured by your home equity that you draw from as needed

Priya Shah By Priya Shah, Senior Mortgage Editor · Updated 2026-06-09
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A HELOC is a revolving line of credit secured by the equity in your home, letting you borrow, repay, and borrow again up to your limit. It works in two phases: a draw period, often around 10 years and sometimes with interest-only payment options, followed by a repayment period when you pay down both principal and interest. Most HELOCs carry a variable interest rate, so your payments can rise or fall as rates change. Because it's typically a second lien against your home, the lender can foreclose if you default, just as with your primary mortgage. Your available credit usually depends on your home's value, your remaining mortgage balance, your credit profile, and the lender's terms, which vary by lender and state.
Also Known As
Home equity line Second mortgage line Revolving home equity loan HELOC
Used in Context
  1. She opened a HELOC during the draw period to fund a kitchen remodel, paying interest-only until the repayment phase began.
  2. Because his HELOC carried a variable rate, his monthly payment climbed when interest rates rose.
  3. A homeowner comparing financing options through Dreamy Leads wanted to know how a HELOC's second lien would affect refinancing later.
Related Terms
Mortgage Home Equity Loan A lump-sum second mortgage you repay in fixed monthly payments at a fixed rate Mortgage Cash-Out Refinance Replace your mortgage with a bigger one and pocket the difference from your home equity Mortgage LTV (Loan-to-Value) The percentage of a property's value financed by a mortgage — key to rates and PMI Mortgage Amortization The schedule that shows how each loan payment splits between principal and interest over time
Frequently Asked Questions

How is a HELOC different from a home equity loan?

A HELOC is a revolving line of credit you draw from as needed, usually at a variable rate, with a draw period and later a repayment period. A home equity loan instead gives you a lump sum upfront, typically at a fixed rate, repaid in set installments from the start.

What happens after the HELOC draw period ends?

After the draw period, often around 10 years, you enter the repayment period. You can no longer borrow, and you begin paying down both principal and interest. If you had interest-only payments before, your monthly payment can rise significantly once full repayment starts.

Can I lose my home with a HELOC?

Yes. A HELOC is secured as a second lien against your home, so if you default the lender can pursue foreclosure, similar to your primary mortgage. Because most HELOCs have variable rates, your payment can change, so confirm you can handle higher payments before borrowing.

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