A HELOC lets you borrow against your home equity up to a set limit, typically up to 80-85% of the home's value minus your existing mortgage. You only pay interest on what you draw.

HELOCs have a draw period (usually 10 years) when you can borrow and only pay interest, followed by a repayment period (usually 20 years) when you pay principal and interest.

Rates are usually variable, tied to the prime rate. HELOC interest may be tax-deductible if used to substantially improve the home.