A Home Equity Line of Credit May Be the Ideal Solution
Is there a major home renovation you’d love to start? Looking to refinance debt? No matter your reason, the equity already in your home may be the perfect option for you, providing affordable access to additional funds whenever you need them.
A home equity line of credit is secured by your home and provides access to funds to use for a variety of purposes. It offers flexibility and is useful for projects with multiple purchases.
- Convenient and easy access to available funds.
- Typically lower interest rates than other types of credit, such as credit cards.
- The option to lock-in a portion of your outstanding balance at a fixed rate.1
- No application fees.
Frequently Asked Questions (FAQs)
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Question
What are the differences between a home equity loan and a home equity line of credit (HELOC)?
AnswerDetermining whether a home equity loan or a HELOC is the better option for you depends on your needs and repayment goals. A home equity line of credit provides ongoing access to funds with flexible repayment options. A home equity loan provides a one-time disbursement of funds at a fixed rate.
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Question
How much can I borrow with a home equity line of credit?
AnswerWell qualified applicants may borrow up to $700,000 depending on the equity in their home, credit rating and other factors.
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Question
How long are home equity line of credit terms?
AnswerHome equity lines of credit feature an initial 15–year interest only draw period followed by a 15–year repayment period for any outstanding balance.
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Question
Are any discounts available with home equity lines of credit?
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Question
Is interest paid on a home equity loan or a home equity line of credit (HELOC) deductible?
AnswerIt depends.
For tax years 2018 through 2025, if home equity loans or lines of credit secured by your main home or second home are used to buy, build, or substantially improve the residence, interest you pay on the borrowed funds is classified as home acquisition debt and may be deductible interest on your taxes, subject to certain dollar limitations. However, interest on the same debt used to pay personal living expenses, such as credit card debts, is not deductible. Please be sure to consult your tax adviser regarding your tax deductibility.