How does paying a HELOC back work?

During the HELOC “draw period”, you can generally make interest-only payments on what you’ve borrowed. Depending on the terms of your HELOC, you may also be able to make payments toward the principal amount, if you choose; however, fees may apply.

You don’t have to withdraw the entire amount of funds — that is the maximum available should you need it. The draw period is usually up to 10 years, depending on the lender and the terms of your agreement.

After the draw period ends, you’ll no longer be able to spend from the HELOC. You’ll enter into the “repayment period”, where you’ll need to pay back the loan. Depending on the terms of your HELOC, this could be over time or due immediately. Typically, the repayment period lasts between 10-20 years, giving homeowners ample time to pay back. Understanding your HELOC’s rate and term structure is key to properly managing your funding.