24 ways to use a HELOC in 2024

This flexible line-of-credit can make many dreams come true

The average cost of a wedding these days is approaching $30,000 – nearly as much as the median annual U.S. wage of $34,000. Not everyone believes they have that kind of money socked away for the joyful day, but many do – right over their heads.

This is because the average homeowner is holding about $185,000 in home equity, and that can be parlayed into a pre-approved line of credit called a home equity line of credit (HELOC). And it may be especially beneficial as interest rates rise.¹

Hold the line. What is a HELOC?

A HELOC is essentially a second mortgage that provides the homeowner a line of credit that is based on the home’s equity. It is different from a traditional home equity loan because the money in a HELOC only becomes debt when the homeowner draws on the line of credit. A home equity loan is a fixed sum the homeowner borrows all at once and then must pay back.²

Because the home is collateral, a HELOC often comes with attractive interest terms, which come in two parts: the withdrawal period and the payment period. During the withdrawal period (often 10 years), any payments are typically interest-only. The principal is added in the payment period.³

22 ways a HELOC can work for you

Due to this structure, a HELOC can be a more affordable, accessible, and flexible alternative to personal loans or credit card debt. And because the line of credit does not become debt until it is used, it serves as a safety net of sorts.

1. Consolidate credit card and loan debt.

If the homeowner has trouble making various debt payments, it may make sense to consolidate them into one longer-term loan.

2. Jumpstart an education.

If expenses sidelined your college studies, or if someone in the household wants to pursue an advanced degree, a HELOC can help you pay as you go, for years.

3. Engage in a wedding plan.

HELOCs are relatively easy to apply for – as long as the homeowner has 15% to 20% equity, a lender will likely say “we do” to a HELOC proposal in a day.

4. Or pay for two weddings.

A holder of a HELOC has access to the funds until the expiration date. So, if a second child plans a wedding a year after the first, it can help with both.

5. Plan a dream event.

All those weddings may inspire the homeowners to renew their own wedding vows with an anniversary party. Big or small, they only have to pay back what they borrow.

6. Take a vacation.

From a weekend getaway to a lifetime adventure in the Galapagos Islands, the HELOC borrower has full control of how much money to withdraw. And the borrower only pays interest on the amount drawn.⁴

7. Prepare for a new family member.

While HELOCs generally have varying interest rates, the borrower may qualify for a fixed rate. That’s one less thing to keep them up at night when the baby arrives.⁵

8. Medical bills.

A new family member means higher health costs. The average health insurance premium for a family of four in 2022 was $1,500, while individual deductibles in 2021 were $1,700.⁶

9. Building for a new lifestyle.

People often expand their homes to include offices or baby rooms. Budgets often exceed expectations. The HELOC’s flexibility has you covered.

10. Start a new business.

A new home office may mean a new business. Plan the budget timeline diligently, however. Once the “draw” period ends, the borrower cannot borrow more money against the HELOC.

11. Purchase a vacation home.

And note that HELOC borrowers don’t have to use the same lender that underwrote their mortgage for that getaway.⁷

12. Handle an emergency.

So, you didn’t plan for that leaky roof, the busted pipes, or the fallen tree. HELOC is here to the rescue.

13. Remodel a bathroom.

A small bathroom remodel can take three to seven weeks to complete.⁸ But the borrower can start making payments even before the new toilet gets its first flush.

14. Modernize the kitchen.

The HELOC doesn’t care if the renovation includes necessary ventilation or those eye-catching crystal cabinet knobs. But choose wisely and don’t go over the credit limit.

15. Improve your curb appeal.

A HELOC line of credit doesn’t stop at the property line, but it does appreciate paying for something that appreciates your home’s value.

16. Dig a new pool.

Invest in the memories now; enjoy the investment for years. And during the HELOC’s draw term, the line of credit can cover maintenance costs.

17. Create a little outdoor break place.

Because small construction projects, like a deck, patio, or porch, can be deceptively pricey – even the DIY ones.

18. Make the basement a man cave.

HELOCs don’t care how they are used. It only matters that they are used responsibly.

19. Construct a "she shed" – wherever she wants it.

Because HELOCs are equal-opportunity lines of credit.

20. Invest for your "older home."

Life expectancy among Americans is now 79 years,⁹ and many want to spend those years in the homes they love. A HELOC can help cover the costs of renovations that will make the home accessible as its owners age, so they can age in place.

21. Put more energy into Mother Earth.

Home efficiency measures, from insulated windows to solar panels, translate to energy savings that can go toward paying down the HELOC loan.

22. Establish a "break glass" fund.

The HELOC’s financial pillow provides invaluable peace of mind when those 4 a.m. “worries” hit. And remember, no payments are due unless money is drawn.

23. Upgrade your home’s technology

Ready to add some of the latest and greatest technology to your home? A HELOC is a fantastic way to convert your home to a smart home, fund a new home theater, or enhance your outdoor entertainment space with a new sound system.

24. Buy that new weekend toy

You can use your HELOC to buy a new boat, RV, or new Utility Task Vehicle (UTV). The flexible funds a HELOC offers allows you to borrow what you need and may offer a better interest rate than other options.

Is a HELOC right for you?

You can control the choice of the home you buy, but what happens inside and outside that home over the life of the mortgage is often unexpected. A HELOC prepares the homeowner to control surprise expenses and responsibly plan expected investments – all 22+ of them.

To learn more about HELOCs, compare loan options, and even apply, click here.