A home equity line of credit (HELOC) is a revolving form of credit secured by your property. You can borrow as little or as much as you need, up to your approved credit line and you pay interest only on the amount that you borrow. You can take advantage of flexible repayment terms, and you can use the credit again as you pay down the balance.

Here are some of the most commonly asked questions about HELOCs.

Frequently asked questions

A HELOC is well suited for large, recurring expenses, such as your child’s college tuition or a remodeling project that may last several years. HELOCs also are ideal for unexpected home emergencies or medical expenses.

Your equity is the share of your home that you own versus what you owe the lender on your mortgage. For example, if your home is worth $300,000 and you have a mortgage balance of $150,000, your equity in the home is $150,000.

HELOC funds are borrowed during a “draw period,” typically 10 years. Once the 10-year draw period ends, any outstanding balance will be converted into a principal-plus-interest loan for a 20-year repayment period.

U.S. Bank offers a Fixed Rate Option that allows you to convert all or any portion of your credit line balance into an installment loan with a fixed interest rate and a fixed payment schedule.

You don’t have to pay off your home equity line or other liens in order to list your home for sale. At your home’s sale closing, any creditors holding liens on your home’s title will be paid off from the proceeds of the sale.

There are no application fees or closing costs to open your U.S. Bank HELOC account.

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Disclosures

U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

The Consumer Pricing Information disclosure lists fees, terms and conditions that apply to U.S. Bank personal checking and savings accounts and can be obtained by visiting a branch or calling 800-872-2657.

Home Equity Line of Credit: The Annual Percentage Rate (APR) is variable and is based upon an index plus a margin. The APR will vary with Prime Rate (the index) as published in the Wall Street Journal. As of November 8, 2024, the variable rate for Home Equity Lines of Credit ranged from 8.20% APR to 11.85% APR. Rates may vary due to a change in the Prime Rate, a credit limit below $50,000, a loan-to-value (LTV) above 60% and/or a credit score less than 730. A U.S. Bank personal checking account is required to receive the lowest rate, but is not required for loan approval. Clients in certain states are eligible to receive the preferred rate without having a U.S. Bank personal checking account. The rate will never exceed 18% APR, or applicable state law, or below 3.25% APR. Choosing an interest-only repayment may cause your monthly payment to increase, possibly substantially, once your credit line transitions into the repayment period. Repayment options may vary based on credit qualifications. Interest-only repayment may be unavailable. Loans are subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Credit line may be reduced or additional extensions of credit limited if certain circumstances occur.

An early closure fee of 1% of the original line amount, maximum $500, will apply if the line is paid off and closed within the first 30 months. Property insurance is required. Other restrictions may apply. An annual fee of up to $75 may apply after the first year and is waived or discounted with an existing U.S. Bank Platinum Checking Package or with enrollment in our Smart Rewards Program. Annual fees are assessed based on the tier in our Smart Rewards Program on your HELOC anniversary date. Please refer to your Smart Rewards terms and conditions for more information on tier assignment.

Home Equity Line of Credit – Fixed Rate Option: A maximum of three active Fixed Rate Options are permitted on a Home Equity Line of Credit. Property insurance is required. Other restrictions may apply.

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.