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For millions of Americans, home equity lines of credit (HELOCs) have been a convenient, low-cost way to borrow. Homeowners use them to pay for home improvements, consolidate debt and finance big-ticket purchases such as cars and college educations. This guide covers what happens when your HELOC comes due and the options for handling the higher payments.
But there’s a problem: a problem of “collective amnesia.”
HELOC recipients tend to forget what happens the moment their draw period ends. The revolving line of credit will evaporate. Worse, the modest monthly payments are likely to skyrocket, sometimes doubling or even tripling in size.
That’s because HELOCs come in two stages.
Stage #1 is the “draw period,” which can last 10 years. During this stage, monthly repayments can be interest-only.
Stage #2, often 10 or 20 years, is the “repayment period” (or “amortization period”). Once this arrives, monthly payments often rise precipitously because they now include both the loan’s interest and principal.
For example, take a HELOC of $30,000 with a three percent interest rate and a 20-year repayment period. The monthly payment could jump from just $75 to $166.
HELOCs opened around 2016 to 2018 with a 10-year draw period reach repayment in 2026 to 2028. Payments can rise sharply at that point.
Check your refinance eligibility. Start here (Nov 4th, 2026)
3 Refinancing Options When Your HELOC Comes Due
Of course, once the amortization begins, you could simply accept that the “other shoe has dropped,” and start making the higher payments.
For many homeowners, this isn’t an attractive option. Instead, they choose one of these three refinancing options. The goal is continued access to credit, a smaller monthly payment, or both.
Apply for a new HELOC
When a HELOC comes due, one option is to get a new HELOC to pay off the old one. This allows you to start over with a new draw period and retain your line of credit for future needs.
Your credit score may have improved since your last application, or interest rates may have declined. If so, you may even qualify for a lower rate. (Most HELOCs come with variable interest rates.)
On the other hand, you will still have to pay off the loan eventually. A new HELOC merely delays the inevitable.
Additionally, you’ll have to qualify under the lender’s current standards, which may be stricter than when you opened your line. In other words, qualifying for a new HELOC is hardly a sure thing.
At a minimum, you’ll probably need to supply financial documentation again. That paperwork can include recent paycheck stubs, W2 statements and tax returns.
You will also need enough equity to qualify. Lenders generally limit the line to a percentage of your home’s appraised value, minus the amount you owe on your mortgage. That percentage varies by lender.
Check your refinance rates. Start here (Nov 4th, 2026)
Get a home equity loan
Unlike a HELOC, a home equity loan is not a revolving credit line, but a lump sum of money.
The advantage of a fixed-rate home equity loan is that your payments never increase. Instead, you pay a fixed monthly sum consisting of both interest and principal for the life of the loan.
Because most home equity loans come with fixed interest rates, your payment is easy to plan around. In addition, home equity loans usually have lower closing costs than regular mortgages.
Refinance into a new primary mortgage
Using this option, you refinance both the HELOC and your first mortgage into a single new loan. As with home equity loans, a new fixed-rate mortgage comes with equal monthly repayments and no sudden increases.
Another advantage is that the interest on first mortgages is often lower than for home equity loans. That’s because of who gets paid first after a default. The first-mortgage lender is the first to be paid back from the proceeds of a home foreclosure sale.
The main disadvantage of this refinance option, though, is higher closing costs.
However, those costs matter less if you plan to stay in the home for a while. The lower interest rate can more than offset them. In that case, your total monthly savings can eventually outweigh the costs of the refinancing.
Can You Extend a HELOC When It Comes Due?
You may not qualify for these refinancing options. The cause might be too little equity in your home, a weak credit score or other financial distress. In that case, there’s one more option you could pursue: ask your lender for a loan modification.
You may find that your monthly payments during the amortization period will be more than you can reasonably afford. If so, contact your mortgage lender as soon as possible. Ask if it can arrange an extended payment schedule or another type of loan modification.
Rather than risk a default on the loan, some lenders may agree to a loan modification. For example, the modification might extend the interest-only period of the HELOC.
Keep in mind, though, that banks and other financial institutions are not obligated to modify their loans. So it’s best to never get yourself into a position where this is your only refinancing option.
Check your refinance eligibility. Start here (Nov 4th, 2026)
