HELOCs in UtahUse Your Equity, Keep Your Rate
You've built real equity in your home, but refinancing would mean giving up a mortgage rate you'll never see again. A home equity line of credit lets you borrow against that equity and keep your first mortgage just as it is.
- Keep your current mortgage
- Borrow only what you need
- Compare multiple lenders
What is a HELOC?
A home equity line of credit (HELOC) is a revolving credit line secured by your home, similar to a credit card with a much lower rate. You can draw funds as needed during a draw period, often about 10 years, then repay over a set term. Most HELOCs have variable rates.
Reviewed by Kenny Farshchian, NMLS #1639863Updated
How much could you borrow with a HELOC?
Enter your home's estimated value and what you owe. Lenders cap the total of your mortgage plus the HELOC at a percentage of your home's value, called the combined loan-to-value (CLTV).
Include any other loans secured by the home.
- Total equity today
- $250,000
- Max total borrowing at 85%
- $467,500
This is an estimate. Your actual line depends on an appraisal or valuation, your credit and your income.
For illustration only; not a loan offer or commitment to lend. Maximum CLTV, rates and terms vary by lender and are subject to credit and property approval.
HELOC vs. cash-out refinance vs. home equity loan
| Feature | HELOC | Cash-out refinance | Home equity loan |
|---|---|---|---|
| Your current mortgage | Stays the same | Replaced by a new loan | Stays the same |
| How you get money | Draw as needed | Lump sum at closing | Lump sum at closing |
| Rate | Usually variable | Fixed or adjustable | Usually fixed |
| Closing costs | Often low | Typically 2% to 5% of the loan | Low to moderate |
| Best when | You have a low first-mortgage rate | Rates are lower than your current rate | You want a fixed payment for one project |
Terms vary by lender. We'll compare the real numbers for your situation.
From application to available funds
- 01
Check your equity
Use the calculator above, or we'll estimate your home's value for you.
- 02
Apply once
We compare HELOC options from multiple lenders, including limits, rates and fees.
- 03
Valuation and approval
The lender confirms your home's value and reviews your credit and income.
- 04
Close and draw
Sign your documents and access funds as you need them during the draw period.
Before you open a HELOC
A HELOC is flexible, but it's still debt secured by your home. A clear plan for how you'll use it and repay it keeps it working for you.
- Payments can rise if rates go up, so plan for a higher payment than today's.
- Many HELOCs require only interest payments during the draw period. Paying principal too keeps your balance from lingering.
- Some lenders charge annual fees or require a minimum first draw; we'll point these out when we compare offers.
- Already own a rental or second home? Some lenders offer HELOCs on those too, usually with lower limits.
HELOC Questions From Utah Homeowners
Most lenders let your mortgage plus the HELOC total up to 80% to 90% of your home's value, depending on your credit and the lender. On a $550,000 home with a $300,000 mortgage, an 85% limit would allow a line of about $167,500.
If you have a low rate on your current mortgage, a HELOC usually makes more sense because you keep that rate and only borrow what you need. A cash-out refinance can be better if today's rates are lower than your current rate or you want one fixed payment.
Most HELOCs have a variable rate tied to the prime rate, so your payment can change. Some lenders let you lock part of your balance at a fixed rate.
Lenders look at your equity, credit score, debt-to-income ratio and the home's value, which may be confirmed by an appraisal or an automated valuation. Many lenders look for scores around 680 or higher.
Common uses include home improvements, paying off higher-interest debt, education costs, and a safety cushion for emergencies. Because your home secures the line, it's best used for things that add long-term value.
See how much equity you can use
We'll compare HELOC and cash-out options side by side so you can choose with confidence.