Home Equity Line of Credit (HELOC) (HELOC)
Direct definition
A revolving line of credit secured by your home, letting you draw and repay funds as needed.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
During the draw period (often 10 years), you can borrow up to a credit limit. After that, the line enters repayment. HELOC rates are typically variable and tied to the prime rate.
Why it matters
It's flexible access to equity for renovations, tuition, or short-term needs — with rate risk.
Where you may see it
- Loan Estimate
- Mortgage statement
- Line of credit agreement
A real-world example
Educational and illustrative only
A common misunderstanding
A HELOC is not a lump-sum loan — it's a revolving line you draw from as needed, and interest generally accrues only on what you've drawn.
Frequently asked
Is HELOC interest tax-deductible?+
It can be when funds are used to buy, build, or substantially improve the home securing the loan — consult a tax advisor.
Ask Vabasso AI
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026