Loan types

HELOC

A home equity line of credit: a revolving, usually variable-rate credit line secured by your home, which you draw from and repay during a draw period before a repayment period begins.

What does HELOC mean?

A HELOC turns your equity into a revolving credit line you can draw from as needed during a draw period — often ten years, interest-only — before a longer repayment period begins. Rates are usually variable, so payments can move with the market. It suits ongoing or uncertain costs like staged renovations, where a lump-sum home-equity loan would be less flexible.

Frequently asked

How does a HELOC work?

It is a revolving credit line secured by your home. During the draw period — often ten years — you borrow what you need up to a limit and usually pay interest only; then a repayment period begins, where you pay the balance down in full, principal and interest.

HELOC vs home equity loan — what is the difference?

A HELOC is a revolving, variable-rate line you draw from as needed; a home equity loan is a fixed-rate lump sum repaid on a set schedule.

Choose a HELOC for ongoing or uncertain costs, a home equity loan for a one-time expense with a known price.

Is HELOC interest tax-deductible?

Only when the funds are used to buy, build, or substantially improve the home securing the loan, and only if you itemize. Using a HELOC to consolidate other debt or cover living costs generally makes the interest non-deductible.