Expert tips on navigating Home Equity Lines of Credit. Learn how to draw, spend, and repay with confidence.
Most lenders allow up to 85% LTV (Loan-to-Value).
Based on 80% LTV standard
Unlike a standard loan, a HELOC has two distinct phases. Understanding the transition between these is critical to avoiding payment shock.
Typically 5-10 years. You can borrow as needed and usually only make interest-only payments.
Typically 10-20 years. You can no longer draw funds, and payments include both principal and interest.
HELOC rates are usually tied to the Prime Rate, meaning your payments can fluctuate over time.
Choosing the right product depends on your specific financial goals.
Use a HELOC for ongoing projects where costs are uncertain, so you only pay interest on what you use.
A fixed-rate Home Equity Loan is often better for a one-time lump sum to pay off high-interest debt.