Loan Amount: $50,000
APR as low as 4.11%
Loan Amount: $100,000
APR as low as 3.03%
Loan Amount: $150,000
APR as low as 3.78%
Loan Amount: $200,000
APR as low as 3.78%

What is a HELOC?

A home equity line of credit, also known as a HELOC, is a line of credit taken out on your home. Similar to a credit card, you may utilize this line of credit for many purposes, including home upgrades, vacations, college tuition, or any other purpose for which you would need money.

A HELOC has two phases: a draw phase and a repayment phase. During the draw phase, you may utilize the line of credit to borrow money, and your monthly payment is calculated from the loan amount and the HELOC interest rate. After the draw phase, you will not be able to tap the line of credit anymore, and begin repaying the loan in monthly installments.

Glossary Terms

Home Equity
Home equity is the difference between the market value of a home and any outstanding mortgage balance(s). A homeowner with a $200,000 property and a... <a href='/glossary/what-is-home-equity' title='See the full definition of Home Equity'>read more</a>
Home Equity Line of Credit
A home equity line of credit (HELOC) is a type of secondary financing that consists of a revolving line of credit secured by a lien junior to a... <a href='/glossary/what-is-home-equity-line-of-credit' title='See the full definition of Home Equity Line of Credit'>read more</a>
The HELOC is revolving line of credit secured by real estate. Borrowers can draw on their available credit line up to its limit, and their monthly... <a href='/glossary/what-is-heloc' title='See the full definition of HELOC'>read more</a>

Understanding Home Equity Lines Of Credit (HELOCs)

A home equity line of credit allows you the flexibility to use your line of credit over a period of years while only making interest payments. Whether you need funds for a wedding, college tuition, home renovations, a vacation, or a second home, use LendingTree's network of lenders to secure a line of credit with the most flexibility and the lowest rate and fees.

Home Equity Line of Credit Calculator

This calculator will provide an estimate of your potential line of credit available to you, based on the data you enter and an 80% LTV ratio.

Appraised Value of Home: $

Balance owed on Mortgage: $

Potential Credit Line: $ 

What If I Have Bad Credit?

Home equity loans and lines of credit are available, even if you have poor credit. In fact, many people use home equity as a way to consolidate debt. Doing this, along with on-time payments, can help improve your personal finances and restore your credit over time.

If your credit is less than stellar, prepare to pay a higher percentage rate on the money you borrow. In addition, remember that the line of credit is taken out against your house, so if anything happens to the point where you can't pay it off, the lender can file to foreclose on your home in order to repay the debt.


Depending on your situation, there may be advantages to getting a home equity line of credit. Advantages include:

  • Lower upfront costs compared to a home equity loan
  • Lower interest rate on borrowed money compared to most credit cards
  • Low or no closing costs (like with a home equity loan)
  • Interest is likely tax deductible for itemized deductions (check with your accountant to make sure you qualify)
  • Tax deductible home equity debt up to $100,000 ($50,000 if married filing separately)


A HELOC is an adjustable-rate mortgage, tied to the prime rate. This means that when the Federal Reserve moves the prime rate, the interest rate of your HELOC will change. A fluctuating interest rate means your payment amounts can go up or down (but mostly up). Disadvantages of a HELOC include:

  • Variable interest rate
  • Early closure fees
  • No interest rate caps

If you are still on the fence about getting a home equity line of credit download LendingTree's guide to home equity:

Your Free Guide To Home Equity