A Home Equity Line of Credit (HELOC) is a type of loan that allows you to borrow against the available equity of your home. Your homes equity is the difference between the appraised value of your home and the amount you owe on your primary mortgage. A HELOC is an "open-end" line of credit that allows you to borrow repeatedly against your home equity. You can borrow as little or as much as you need throughout your draw period, typically 10 years, up to the credit limit you establish at closing. As you repay your outstanding balance, the amount of available credit is replenished, much like a credit card. HELOCs usually have a variable interest rate that changes over time, so your payments may not be the same from month to month. The repayment period is also a fixed term of years, and depending on your lender and your HELOC agreement, you may have to pay back the whole amount you borrowed as soon as the repayment period begins. To qualify for a HELOC, you need to have available equity in your home, meaning that the amount you owe on your home must be less than the value of your home. You can typically borrow up to 85% of the value of your home minus the amount you owe. A HELOC often has a lower interest rate than some other common types of loans, and the interest may be tax-deductible. However, a HELOC is a secured loan tied to your home, so you risk going through foreclosure if you cant make your payments.