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How Does a HELOC Work?

A (HELOC) lets you borrow money using your home’s value as collateral. It gives you the flexibility of a credit card, but typically offers lower interest rates and higher borrowing limits. You can take out money as needed during the draw period and only pay interest on what you use. When the draw period ends, any remaining balance turns into a fixed loan with set monthly payments.

Many homeowners use a HELOC to increase their home’s value through renovations or to consolidate high-interest debt into one manageable payment.

What factors affect my monthly payment?

Example rates are based on a primary residence with a borrower credit score of 700. This assumes the borrower has a first mortgage, and the HELOC is a second lien on the property.

• Closing costs: Estimated between $737 and $3,500.
• Variable rate: Based on WSJ Prime + a margin; may change after closing. Minimum APR is 4.25%, and the maximum is 18.00%.
• APR (Annual Percentage Rate): Depends on loan amount, interest rate, loan-to-value (LTV), and credit score.
• Payments: Example quotes include principal and interest only. Actual payments may be higher if taxes and insurance are included.

What are the terms?

• Maximum 80% LTV.
• 10-year interest-only draw period, then converts to a 15-year fixed-rate loan with principal and interest payments based on the rate at conversion.
• $100 annual fee applies.
• **Subject to credit approval **

Rates, terms, and fees may change without notice.

To learn more about the rates and fees that apply to our Home Equity Line of Credit, click to view HELOC Disclosures and What You Should Know About HELOC.