A home equity line of credit (HELOC) gives you access to the equity you’ve built in your home, allowing you to borrow as needed instead of taking a lump sum upfront. It works a lot like a credit line—you can use what you need, pay it back, and use it again during the draw period, all without having to reapply. Your available equity is simply the difference between your home’s current value and what you still owe on your mortgage.

Depending on the lender, there may be some upfront costs like an appraisal, application, or closing fees. During the draw period, you can typically access funds through checks or a card, and your payments may be interest-only or include principal. If the rate is variable, your payment can fluctuate over time even if your balance stays the same.

Once the draw period ends, the HELOC transitions into the repayment phase. At that point, you’ll begin paying back the remaining balance, usually over a set period, though some structures may require a larger payoff at the end.