How to Get a HELOC: Requirements, Process, and What to Watch For

Bottom line: To get a HELOC you typically need 20% equity (80% combined loan-to-value), a credit score of 620+, verifiable income, and a debt-to-income ratio below 43%. The application takes 2–6 weeks. The key risk is the variable rate: HELOC rates move with the prime rate and can rise significantly if the Fed raises rates.

Quick answer

To get a HELOC, you need three things most lenders check first: at least 15 to 20% equity remaining after the line is added (80 to 85% combined loan-to-value), a credit score of 620 or higher (best pricing at 700+), and a debt-to-income ratio below 43%. The process runs 2 to 6 weeks: application, appraisal, underwriting, closing, then a 3-day rescission period before you can draw. The average HELOC rate tracked on this site currently runs near 8.20% APR, and because it is variable, your rate moves whenever the prime rate does. Compare your existing lender against 2 to 3 competitors before signing.

A HELOC (Home Equity Line of Credit) is a revolving credit line secured by your home. Unlike a mortgage or home equity loan, you do not receive a lump sum. You get approved for a maximum credit limit and draw from it as needed during the draw period, typically 10 years. Current benchmark rates are on our HELOC and home equity page, and our when to use a HELOC vs. home equity loan guide covers the fixed-vs-variable trade-off in depth.

HELOC Requirements

Home equity: Most lenders allow borrowing up to 80–85% of your home's appraised value, minus your existing mortgage balance. This is the Combined Loan-to-Value (CLTV) ratio.

Example: Home appraised at $600,000. Existing mortgage balance: $380,000.

80% of $600,000 = $480,000
Maximum HELOC: $480,000 − $380,000 = $100,000

Credit score: Minimum 620 for most lenders; best rates at 700+. Some lenders require 680–700 minimum.

DTI: Most lenders want total DTI below 43% (including the new HELOC payment, typically calculated at the full draw amount for qualification purposes). Not sure where you stand? Our debt-to-income ratio guide explains the calculation, and the DTI calculator runs your numbers in a minute.

Income: Standard verification, including W-2s, tax returns, and pay stubs. Must demonstrate ability to repay.

Property: Primary residence and second homes qualify at the best terms. Investment properties may qualify at higher rates or lower CLTV limits; see our investment property HELOC guide for those rules. Condos may face additional restrictions.

How the HELOC Application Works

Step 1: Gather documents Same documentation as a mortgage application: pay stubs, W-2s, tax returns, bank statements, mortgage statement showing current balance.

Step 2: Apply Apply with your existing mortgage lender first, since they already have your home and loan on file, which can simplify appraisal and processing. Also compare rates from 2–3 other lenders, as rates vary. As of today, the average HELOC rate tracked on this site runs near 8.20% APR, against a prime rate of 6.75% APR.

Step 3: Appraisal Most HELOCs require a property appraisal ($300–600) to establish current market value. Some lenders offer automated valuations (AVMs) that skip the in-person appraisal for lower LTVs.

Step 4: Underwriting Typically 2–6 weeks. Lender verifies income, employment, credit, and property value. Faster than a first mortgage but similar review.

Step 5: Closing HELOC closings are simpler than purchase mortgage closings, typically a short signing appointment. Closing costs are often lower or waived by lenders to win the business.

Step 6: Draw period begins After a 3-day right-of-rescission period (federally mandated by the Truth in Lending Act for home equity products on primary residences), you can draw from the line.

Key Takeaways

HELOC rates are variable and tied to the prime rate (which moves with the Federal Reserve funds rate). In 2022-2023, the prime rate rose from 3.25% to 8.5%, so a HELOC at prime+0.5% went from 3.75% to 9%. Budget for rate increases when planning HELOC-funded projects.
Many HELOCs have a minimum draw requirement and annual or inactivity fees. Read the terms before signing. Some lenders charge fees if you do not draw within 90 days of opening or if the line sits unused for 12+ months.
The repayment period shock is the most common HELOC surprise: at the end of the 10-year draw period, the fully amortizing repayment begins. A $100,000 HELOC balance at 8% transitioning from interest-only draw-period payments ($667/month) to a 20-year amortizing payment ($836/month) increases by $169/month overnight. Model this before drawing large balances near the end of the draw period.

HELOC Draw Period vs. Repayment Period

Draw period (typically 10 years): You can borrow, repay, and borrow again up to your credit limit. Most HELOCs require only interest payments during this period, though you can pay principal voluntarily.

Repayment period (typically 20 years): The line closes to new draws. Your remaining balance amortizes in equal monthly payments over the repayment period. Payments increase because principal repayment is now required.

HELOC vs. Cash-Out Refinance

If you need a large lump sum rather than a flexible line, compare a HELOC against a cash-out refinance:

Cash-out refinance: Replaces your first mortgage. Fixed rate. One loan. Higher closing costs. Better if first mortgage rates are high and you want to lower the overall rate while accessing equity. Our refinance guide covers the process.
HELOC: Sits behind your first mortgage. Variable rate. Two loans. Lower closing costs. Better if your first mortgage rate is already good and you want equity access without disturbing it.

To compare a HELOC against a fixed-rate lump sum on your actual numbers, run the HELOC vs home equity loan calculator or model payments with the HELOC payment calculator.

SwitchWize rule of thumb

Size the line to the project, not to the maximum the lender approves. Qualify with a payment you could still afford if the rate rose 3 percentage points, because the prime rate has moved that much in a single tightening cycle before.

Which move fits your situation

Ongoing or phased expense, good first-mortgage rate

Best next move: Apply for a HELOC
Why: Flexible draws and low closing costs without disturbing your mortgage.

One known expense, want payment certainty

Best next move: Price a home equity loan
Why: Fixed rate and level payments beat variable-rate uncertainty.

First mortgage rate above today's market

Best next move: Compare a cash-out refinance
Why: You can lower the overall rate while accessing equity in one loan.

Credit score below 680 or DTI near 43%

Best next move: Improve the numbers first
Why: Pay down balances before applying; pricing improves sharply above 700.

Nearing the end of an existing draw period

Best next move: Model the amortizing payment now
Why: The repayment-period jump is the most common HELOC surprise.

Situation	Best next move	Why
Ongoing or phased expense, good first-mortgage rate	Apply for a HELOC	Flexible draws and low closing costs without disturbing your mortgage.
One known expense, want payment certainty	Price a home equity loan	Fixed rate and level payments beat variable-rate uncertainty.
First mortgage rate above today's market	Compare a cash-out refinance	You can lower the overall rate while accessing equity in one loan.
Credit score below 680 or DTI near 43%	Improve the numbers first	Pay down balances before applying; pricing improves sharply above 700.
Nearing the end of an existing draw period	Model the amortizing payment now	The repayment-period jump is the most common HELOC surprise.

If you are not sure home equity is even your best lever, Money Map can rank it against your savings, card, and mortgage gaps in one pass.

Quick answers

What credit score do I need for a HELOC? Most lenders require at least 620, with the best rates at 700 or higher. Some set the floor at 680 to 700.

How much equity do I need? Enough to stay under the lender's combined loan-to-value cap, usually 80 to 85%. In practice that means keeping 15 to 20% equity after the line is added.

How long does getting a HELOC take? Typically 2 to 6 weeks through underwriting, plus a federally required 3-day rescission period on primary residences before you can draw.

Are HELOC rates fixed? No. Nearly all HELOCs are variable and priced off the prime rate, which follows the federal funds rate. Some lenders offer fixed-rate conversion on drawn balances.

Sources

Consumer Financial Protection Bureau, Truth in Lending Act (Regulation Z) for the right of rescission and home equity lending rules.
Consumer Financial Protection Bureau, what is a HELOC for borrower guidance.
Federal Reserve consumer resources for how the prime rate follows Fed policy.

Rates referenced on this page were verified on July 9, 2026. Live figures may update automatically through SwitchWize rate tokens. HELOC rates, terms, and availability vary by lender and are subject to change with Federal Reserve rate decisions. This article is educational information, not individualized financial advice.

What to Do Now

Estimate your maximum line: 80% of your home's value minus your current mortgage balance.

Check your DTI against the 43% cap before any lender does.

Compare current HELOC rates from your existing lender and 2 to 3 competitors.

Frequently Asked Questions

What credit score do you need for a HELOC?

Most lenders require a minimum of 620, with the best rates going to borrowers at 700 or higher. Some lenders set a higher floor of 680-700.

How much equity do you need to get a HELOC?

Most lenders allow borrowing up to 80-85% combined loan-to-value, meaning you typically need at least 15-20% equity remaining after the HELOC is added to your existing mortgage balance.

How long does it take to get a HELOC?

Underwriting typically takes 2 to 6 weeks, followed by a federally mandated 3-day right-of-rescission period on primary residences before you can draw from the line.

Is a HELOC or a home equity loan better?

A HELOC gives you a flexible, variable-rate line of credit you draw from as needed, while a home equity loan gives you a lump sum at a fixed rate. A HELOC suits ongoing or uncertain expenses; a fixed-rate home equity loan suits a single known expense where you want payment certainty.

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