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Glossary Finance

HELOC

A HELOC (home equity line of credit) is a revolving credit line secured by your home, with a draw period followed by a repayment period.

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In more detail

The rate is usually variable. On $50,000 at 8%, the interest-only payment during a 10-year draw period is $333.33; the following 15-year repayment raises it to $477.83. Because the home is collateral, default risks foreclosure.

Try these tools

HELOC Calculator

Use this HELOC calculator to estimate your draw period and repayment period monthly payments, total interest paid.

See also

  • Glossary Equity
    Equity is the part of an asset you truly own: its current value minus what you still owe against it.
  • Glossary Loan-to-value ratio (LTV)
    The loan-to-value ratio (LTV) is the loan amount divided by the value of the asset securing it, a key measure of lender risk.
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