U.S. Mortgage Index

Home equity line of credit

Also called HELOC

Definition

A home equity line of credit is a revolving credit line secured by a home. Borrowers may draw, repay, and draw again up to the available limit during the draw period. HELOC is the usual acronym.

In plain English

A HELOC is not a one-time lump-sum loan. It is a line of credit tied to the home. During the period the contract allows draws, the borrower can use available credit, pay it down, and use it again. A home equity loan, by contrast, is typically a closed-end amount borrowed at once. Both can be secured by the same property. They are not the same product.

Technical definition

Consumer glossaries describe a HELOC as a line of credit secured by the borrower’s home. HELOC is the acronym for this product, not a different product.

Why it matters

Profiles and product language often say HELOC. Readers need the expanded concept and a clean split from a home equity loan.

Example

Casey opens a HELOC, draws funds for a renovation, later pays the balance down, and then draws again within the remaining available credit. That revolving pattern is the line-of-credit idea, not a second first mortgage.

Commonly confused with

Sources reviewed

Important note

HELOC is the usual acronym for a home equity line of credit, not a different product.