Should You Use a HELOC to Pay Off Your Mortgage?
Paying off your mortgage early is a financial goal shared by many homeowners. One strategy that often enters the conversation is using a HELOC—a Home Equity Line of Credit—to help achieve this goal. But is this a smart move? The answer isn't a simple yes or no. This blog post explores the pros, cons, and nuances of using a HELOC to pay off your mortgage. You'll learn how the strategy works, what risks to consider, and whether it's right for your financial situation. What Is a HELOC? A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by the equity in your home. Unlike a traditional loan, a HELOC allows you to borrow as needed up to a predetermined limit and repay it over time, similar to a credit card. Key features of a HELOC: Variable interest rates (although some lenders offer fixed-rate options) Draw period (usually 5–10 years) followed by a repayment period Flexible repayment options during the draw period Interest may be tax-deduc...
