What are the rules around Home Equity Lines of Credit (HELOCs)?
HELOCs are non-amortizing credit lines secured by residential property.
Key Points
A HELOC lets you borrow money against the equity in your home; reverse mortgages are a separate product and not classified as HELOCs.
Lenders need to manage the risks of HELOCs, and they expect you to eventually pay back the full amount you borrow.
You can generally only borrow up to 65% of your home's value with a HELOC.
If you need to borrow more than 65% of your home's value, that extra amount needs to be paid off with a regular mortgage payment schedule.
Your lender may re-evaluate your HELOC limit if your home's value drops significantly or your financial situation changes a lot.
Technical Research Verification
Our systems synchronized 3 data points and regulatory frameworks to verify this technical brief.
Related Questions
How does the stress test differ for fixed vs. variable in 2026?
Both are stress-tested at the higher of the benchmark (5.25%) or the contract rate + 2%.
Why are 3-year fixed rates dominating the 2026 market?
Borrowers are hesitant to lock in for 5 years at current levels, but find 1-2 year rates too expensive.
Fixed vs. Variable Comparison Table
Fixed locks a 5-year rate with IRD penalty risk; variable floats with prime and typically caps break fees at 3 months interest.
What is the 'IRD' penalty risk for 5-year fixed borrowers?
The Interest Rate Differential (IRD) can cost tens of thousands if you break a fixed mortgage when market rates have dropped.