[{"data":1,"prerenderedAt":526},["ShallowReactive",2],{"site-navigation":3,"jd-power-global":82,"2fs8ugpQUf":92,"yjQJTi4ga8":108,"fQDr0Bh6mC":122,"p2i1fz5AsO":137,"sCwnKnaTPC":149,"IanxyxYi0B":163,"130ucomFyV":176,"KSTjiWrNFl":188,"8FzliH2Rpq":202,"global-floating-disclosure":216,"Vw0lEbnNvj":224,"spanish-language-disclosure":234,"disclosure-default":241,"SEeE09FmpH":247,"J1MihCHS9H":275,"xho8uxunJy":291,"HChAl58WXr":301,"yM8qDLXsXg":311,"l2-cards-undefined":71,"article-cards-undefined":71,"nCyq0Dnzl9":336,"$y7DCzaVwVh":346,"article-cards-home-loans/heloc-as-down-payment-second-home-home-loans/heloc-vs-cash-out-refinance-home-loans/fed-rate-impact-heloc-home-equity":353},{"_path":4,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"bottomSiteNavigationLinks":8,"mainSiteNavigationLinks":28,"footerSiteNavigationLinks":34,"socialLinks":53,"headerNavigation":64,"_id":77,"_type":78,"title":79,"_source":80,"_file":81,"_extension":78},"/settings/site-navigation","settings",false,"",[9,12,15,18,21,24],{"text":10,"to":11},"Calculators","/calculators",{"text":13,"to":14},"Rates","/rates",{"text":16,"to":17},"Buy","/home-buying",{"text":19,"to":20},"Refinance","/refinancing",{"hideFromSiteMap":6,"text":22,"to":23},"Equity","/equity",{"text":25,"to":26,"hideFromSiteMap":27},"Education & Tools","/education-and-tools",true,[29,30,31,32,33],{"text":10,"to":11},{"text":13,"to":14},{"text":16,"to":17},{"text":19,"to":20},{"text":22,"to":23},[35,38,41,44,47,50],{"text":36,"to":37},"Citi.com","https://www.citi.com",{"text":39,"to":40},"Sitemap","/sitemap",{"text":42,"to":43},"Accessibility","https://online.citi.com/US/JRS/portal/template.do?ID=Accessibility",{"text":45,"to":46},"Privacy Policy","https://online.citi.com/US/JRS/portal/template.do?ID=Privacy",{"text":48,"to":49},"Terms & Conditions","https://online.citi.com/US/nga/termsdisclaimer/termsdisclaimerhome",{"text":51,"to":52},"Do Not Sell or Share My Personal Information","https://online.citi.com/US/ag/dataprivacyhub/cpra/home",[54,57,61],{"to":55,"text":56,"icon":56},"https://www.facebook.com/citibank","Facebook",{"to":58,"text":59,"icon":60},"https://x.com/Citibank","X, formally known as Twitter","X",{"to":62,"text":63,"icon":63},"https://www.youtube.com/citi","YouTube",{"utilityNavigation":65},[66,72],{"link":67,"variant":70,"icon":71},{"text":68,"to":69},"Apply now","#dragonflyapp","primary",null,{"link":73,"variant":76},{"text":74,"to":75},"{{tracking_code}}","tel:{{tracking_code}}","primary-outline","content:settings:site-navigation.json","json","Site Navigation","content","settings/site-navigation.json",{"title":83,"subtext":7,"portraitImage":84,"imageAlt":85,"imageWidth":86,"background":87,"borderRadius":88,"maxWidth":89,"paddingTopBottom":90,"paddingLeftRight":90,"gap":90,"variant":91},"Citi is #1 in Customer Satisfaction with Mortgage Origination - ***[J.D. Power 2025 Award](https://www.jdpower.com/business/awards)***","/media/jdpower-trophy.png","J.D. Power 2025 Trophy",48,"var(--brand-default)",0,650,16,"default",{"data":93,"body":95,"excerpt":-1,"toc":105},{"title":7,"description":94},"What is equity in a home? Learn what it is and how it can help you cover renovations, debt consolidation and expenses.",{"type":96,"children":97},"root",[98],{"type":99,"tag":100,"props":101,"children":102},"element","p",{},[103],{"type":104,"value":94},"text",{"title":7,"searchDepth":106,"depth":106,"links":107},2,[],{"data":109,"body":110,"excerpt":-1,"toc":120},{"title":7,"description":7},{"type":96,"children":111},[112],{"type":99,"tag":113,"props":114,"children":119},"three-up-card-grid-v2",{":cards":115,"background-color":7,"body":116,"headline":117,"image-position":118},"[{\"backgroundColor\":\"\",\"headline\":\"Upgrade your home\",\"body\":\"Tackle repairs or start the renovation you’ve been considering—all while potentially adding long-term value.\"},{\"backgroundColor\":\"\",\"headline\":\"Consolidate debt\",\"body\":\"Roll high-interest balances into one simple payment to help you save on interest and improve financial health. \"},{\"backgroundColor\":\"\",\"headline\":\"Cover big expenses\",\"body\":\"Use equity for home repairs, ongoing needs or surprise costs—often at a lower rate than other borrowing options.\"}]","As you pay down the mortgage and your home value rises, you build equity—the part you truly own. You can typically borrow up to 80% of your home’s value, minus what you still owe on your loan.","What is home equity and how can it help you?","left",[],{"title":7,"searchDepth":106,"depth":106,"links":121},[],{"data":123,"body":124,"excerpt":-1,"toc":135},{"title":7,"description":7},{"type":96,"children":125},[126],{"type":99,"tag":127,"props":128,"children":134},"limited-cta-card-grid",{":cards":129,":cta":130,"body":131,"headline":132,"theme":133},"[{\"headline\":\"Explore home equity lines of credit (HELOCs) \",\"body\":\"Draw funds as needed, not all at once, to cover ongoing costs like big renovations.\",\"link\":\"/home-loans/heloc\",\"ctaText\":\"Learn More\",\"ctaType\":\"text-arrow\",\"ariaLabel\":\"\"},{\"headline\":\"Learn about cash-out refinance options \",\"body\":\"Replace your mortgage with a larger one and pocket the difference in cash.\",\"link\":\"/refinancing/articles/cash-out\",\"ctaText\":\"Learn More\",\"ctaType\":\"text-arrow\",\"ariaLabel\":\"\"}]","{\"text\":\"Connect with a Citi Specialist\",\"to\":\"/contact\"}","When you need funds, Citi gives you many options.","Discover ways to access equity ","light",[],{"title":7,"searchDepth":106,"depth":106,"links":136},[],{"data":138,"body":139,"excerpt":-1,"toc":147},{"title":7,"description":7},{"type":96,"children":140},[141],{"type":99,"tag":142,"props":143,"children":146},"header-block",{"body":144,"headline":145},"Use these mortgage calculators to compare borrowing options and ensure your finances are ready for the next step.","See how home equity options stack up",[],{"title":7,"searchDepth":106,"depth":106,"links":148},[],{"data":150,"body":151,"excerpt":-1,"toc":161},{"title":7,"description":7},{"type":96,"children":152},[153],{"type":99,"tag":154,"props":155,"children":160},"calculator",{":show-jd-power":156,"calculator-type":157,"headline":158,"subhead":159},"false","HELOC","Estimate your HELOC payment","See what your monthly HELOC bill could be and remember, you only pay for the amount you actually borrow—not the total credit limit.",[],{"title":7,"searchDepth":106,"depth":106,"links":162},[],{"data":164,"body":165,"excerpt":-1,"toc":174},{"title":7,"description":7},{"type":96,"children":166},[167],{"type":99,"tag":168,"props":169,"children":173},"cta-card-grid-v2",{":cards":170,":column3-support":171,":pencil-bar":172},"[{\"ctaType\":\"arrow\",\"backgroundColor\":\"\",\"headline\":\"Cash-Out Refinance Calculator \",\"body\":\"How much can I borrow by refinancing?\",\"link\":\"/calculators/cash-out-refinance\"},{\"ctaType\":\"arrow\",\"backgroundColor\":\"\",\"headline\":\"Debt-to-Income Calculator\",\"body\":\"How much of my income goes toward debt each month?\",\"link\":\"/calculators/debt-to-income-ratio\"},{\"ctaType\":\"arrow\",\"backgroundColor\":\"\",\"headline\":\"Today’s Mortgage Rates Calculator \",\"body\":\"How do the latest rates look? \",\"link\":\"/rates\"}]","true","{\"icon\":\"Coin\",\"body\":\"Prefer not to use home equity? **[Explore Citi’s personal installment loans](https://www.citi.com/personal-loans?affcode=MOR&intc=pil_borrow_mortgage_heloc&ISN=24806)**\"}",[],{"title":7,"searchDepth":106,"depth":106,"links":175},[],{"data":177,"body":178,"excerpt":-1,"toc":186},{"title":7,"description":7},{"type":96,"children":179},[180],{"type":99,"tag":181,"props":182,"children":185},"connect-v2",{":cta":130,"body":183,"headline":184},"Let's find the best fit for your budget and how you plan to use the funds.","Get help weighing your equity options",[],{"title":7,"searchDepth":106,"depth":106,"links":187},[],{"data":189,"body":190,"excerpt":-1,"toc":200},{"title":7,"description":7},{"type":96,"children":191},[192],{"type":99,"tag":193,"props":194,"children":199},"info",{":cta":195,"body":196,"headline":197,"icon":198},"{\"text\":\"See how refinancing can help you\",\"to\":\"/refinancing\"}","See how refinancing can help you lower payments, shorten your loan term or get a lump sum of cash.","Thinking about refinancing to a new rate and term?","flying-cash",[],{"title":7,"searchDepth":106,"depth":106,"links":201},[],{"data":203,"body":204,"excerpt":-1,"toc":214},{"title":7,"description":7},{"type":96,"children":205},[206],{"type":99,"tag":113,"props":207,"children":213},{":articles":208,"alert-icon":209,"background-color":210,"headline":211,"image-alignment":212,"image-position":118},"[\"home-loans/heloc-as-down-payment-second-home\",\"home-loans/heloc-vs-cash-out-refinance\",\"home-loans/fed-rate-impact-heloc-home-equity\"]","bell","dark","Make the most of your home equity","top",[],{"title":7,"searchDepth":106,"depth":106,"links":215},[],{"_path":217,"_dir":218,"_draft":6,"_partial":6,"_locale":7,"slug":219,"content":220,"_id":221,"_type":78,"title":222,"_source":80,"_file":223,"_extension":78},"/disclosures/global-floating-disclosure","disclosures","global-floating-disclosure","This page provides general information regarding mortgage loans or home equity lines of credit. Citi’s offerings and lending guidelines may differ.","content:disclosures:global-floating-disclosure.json","Global Floating Disclosure","disclosures/global-floating-disclosure.json",{"data":225,"body":226,"excerpt":-1,"toc":232},{"title":7,"description":220},{"type":96,"children":227},[228],{"type":99,"tag":100,"props":229,"children":230},{},[231],{"type":104,"value":220},{"title":7,"searchDepth":106,"depth":106,"links":233},[],{"_path":235,"_dir":218,"_draft":6,"_partial":6,"_locale":7,"content":236,"slug":237,"_id":238,"_type":78,"title":239,"_source":80,"_file":240,"_extension":78},"/disclosures/spanish-language-disclosure","\u003Csup>†\u003C/sup>Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.\n\n\u003Cspan lang=\"es\">Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.\u003C/span>","spanish-language-disclosure","content:disclosures:spanish-language-disclosure.json","Spanish Language Disclosure","disclosures/spanish-language-disclosure.json",{"_path":242,"_dir":218,"_draft":6,"_partial":6,"_locale":7,"slug":91,"content":243,"_id":244,"_type":78,"title":245,"_source":80,"_file":246,"_extension":78},"/disclosures/default","This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.\n\nTerms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.","content:disclosures:default.json","Default","disclosures/default.json",{"data":248,"body":250,"excerpt":-1,"toc":273},{"title":7,"description":249},"†Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":96,"children":251},[252,263],{"type":99,"tag":100,"props":253,"children":254},{},[255,261],{"type":99,"tag":256,"props":257,"children":258},"sup",{},[259],{"type":104,"value":260},"†",{"type":104,"value":262},"Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":99,"tag":100,"props":264,"children":265},{},[266],{"type":99,"tag":267,"props":268,"children":270},"span",{"lang":269},"es",[271],{"type":104,"value":272},"Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.",{"title":7,"searchDepth":106,"depth":106,"links":274},[],{"data":276,"body":278,"excerpt":-1,"toc":289},{"title":7,"description":277},"This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.",{"type":96,"children":279},[280,284],{"type":99,"tag":100,"props":281,"children":282},{},[283],{"type":104,"value":277},{"type":99,"tag":100,"props":285,"children":286},{},[287],{"type":104,"value":288},"Terms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.",{"title":7,"searchDepth":106,"depth":106,"links":290},[],{"data":292,"body":293,"excerpt":-1,"toc":299},{"title":7,"description":196},{"type":96,"children":294},[295],{"type":99,"tag":100,"props":296,"children":297},{},[298],{"type":104,"value":196},{"title":7,"searchDepth":106,"depth":106,"links":300},[],{"data":302,"body":303,"excerpt":-1,"toc":309},{"title":7,"description":144},{"type":96,"children":304},[305],{"type":99,"tag":100,"props":306,"children":307},{},[308],{"type":104,"value":144},{"title":7,"searchDepth":106,"depth":106,"links":310},[],{"data":312,"body":314,"excerpt":-1,"toc":334},{"title":7,"description":313},"Prefer not to use home equity? Explore Citi’s personal installment loans",{"type":96,"children":315},[316],{"type":99,"tag":100,"props":317,"children":318},{},[319,321],{"type":104,"value":320},"Prefer not to use home equity? ",{"type":99,"tag":322,"props":323,"children":324},"strong",{},[325],{"type":99,"tag":326,"props":327,"children":331},"a",{"href":328,"rel":329},"https://www.citi.com/personal-loans?affcode=MOR&intc=pil_borrow_mortgage_heloc&ISN=24806",[330],"nofollow",[332],{"type":104,"value":333},"Explore Citi’s personal installment loans",{"title":7,"searchDepth":106,"depth":106,"links":335},[],{"data":337,"body":338,"excerpt":-1,"toc":344},{"title":7,"description":116},{"type":96,"children":339},[340],{"type":99,"tag":100,"props":341,"children":342},{},[343],{"type":104,"value":116},{"title":7,"searchDepth":106,"depth":106,"links":345},[],{"_path":347,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"helocRate":348,"purchaseRate":349,"refinanceRate":349,"_id":350,"_type":78,"title":351,"_source":80,"_file":352,"_extension":78},"/settings/calculator-rates",6.75,6.5,"content:settings:calculator-rates.json","Calculator Rates","settings/calculator-rates.json",[354,416,470],{"_path":355,"_dir":356,"_draft":6,"_partial":6,"_locale":7,"readTime":357,"l1":356,"linkNav":358,"heroMedia":362,"teaserImage":365,"slug":367,"sections":368,"date":390,"subheadline":391,"headline":376,"isFeatured":6,"tags":392,"link":396,"seo":399,"hasSectionNavigation":27,"_id":402,"_type":78,"title":403,"_source":80,"_file":404,"_extension":78,"tagsDetails":405},"/articles/home-loans/heloc-as-down-payment-second-home","home-loans",5,{"introText":359,"text":360,"to":361},"Ready for the next step?","Connect with a Citi Specialist","/contact",{"landscape":363,"portrait":364},"/media/can-you-use-a-heloc-as-a-down-payment-on-second-home-mobile-768x512.jpg","/media/can-you-use-a-heloc-as-a-down-payment-on-second-home-desktop-520x638.jpg",{"src":366},"/media/can-you-use-a-heloc-as-a-down-payment-on-second-home-teaser-500x500.jpg","heloc-as-down-payment-second-home",[369,372,375,378,381,384,387],{"title":370,"content":371},"What is a HELOC?","A home equity line of credit ([HELOC](/home-loans/heloc/)) is a flexible way of tapping home equity, converting a portion of your home’s value into accessible cash. It’s a second mortgage that gives you a set amount of credit to draw from, secured by your home. \n\nThe loan has two distinct phases: a draw period where you can borrow money as needed, and a repayment period to pay off the balance. This makes a HELOC an excellent tool for funding ongoing expenses or a series of projects, since you pay interest only on the money you’ve actually used.\n\nWhile it offers flexibility, keep in mind that HELOCs have a variable interest rate, which means your payment can change over time based on the [fluctuation of interest rates](/rates/articles/federal-reserve-interest-rates/).",{"title":373,"content":374},"Is a HELOC a second mortgage?","Yes, a HELOC is a type of second mortgage. But the terms aren’t exactly interchangeable. Let’s dig into the second mortgage vs. HELOC comparison.\n\n“Second mortgage” refers broadly to any loan that’s secured by your home and takes second position behind your [primary mortgage](/home-loans/articles/types-of-loans/). That includes both HELOCs and home equity loans.\n\nUnlike HELOCs, [home equity loans](/home-loans/home-equity/) provide a lump sum up front with a fixed interest rate.\n\nHere is a quick comparison of the two. If you want more details, deep dive into [HELOCs vs. home equity loans](/home-loans/articles/heloc-vs-home-equity-loan/).\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"HELOC\"},{\"value\":\"Home Equity Loan\"}]' :rows='[{\"column\":{\"valueOne\":\"How it works\",\"valueTwo\":\"Revolving line of credit\",\"valueThree\":\"Lump sum loan\"}},{\"column\":{\"valueOne\":\"Interest\",\"valueTwo\":\"Usually variable; interest is only on what you borrow\",\"valueThree\":\"Fixed rate on the full amount\"}},{\"column\":{\"valueOne\":\"Repayment\",\"valueTwo\":\"Interest-only during draw period, then principal and interest payments\",\"valueThree\":\"Fixed monthly payments until paid off\"}}]'}\n::",{"title":376,"content":377},"Can you use a HELOC for a down payment on a second home?","Yes—in some cases. Using a HELOC to fund a [second home](/home-buying/articles/second-home/) down payment is a popular strategy for homeowners who want to access their equity without draining their cash savings. However, this approach adds another layer of debt and is subject to strict lender requirements. \n\n### Lender requirements and restrictions\n\nEvery lender has specific rules around using HELOCs for investment property or a second home. Always confirm the HELOC second home rules up front to avoid surprises during underwriting.\n\n### Loan-to-value (LTV) limits and credit considerations\n\nLenders evaluate your financial profile when you’re leveraging equity, including:\n\n**Credit and DTI:** You’ll need a [strong credit](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) score (often a 680+ FICO® score) and a healthy [debt-to-income (DTI) ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/).\n\n**Your home’s equity:** Most lenders require you to maintain a certain amount of equity in your primary home—typically 15%-20%—even after a HELOC is taken out.\n\n**Loan purpose:** Some lenders prohibit the use of a HELOC for a down payment on another property, while others may require a larger down payment or more cash reserves.",{"title":379,"content":380},"Pros and cons of using a HELOC for a second home","A HELOC can be a useful tool, but make sure you do your homework on the pros and cons before you commit. Use our [HELOC calculator](/calculators/heloc/) to estimate the costs and see if it’s the right home equity financing option for you.\n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"Pros\"},{\"column\":\"Cons\"}]},{\"row\":[{\"column\":\"Access cash without selling investments or draining savings\"},{\"column\":\"Your monthly payments may rise if interest rates go up\"}]},{\"row\":[{\"column\":\"The ability to draw funds as you need them\"},{\"column\":\"Not all lenders allow a HELOC for a second home down payment\"}]},{\"row\":[{\"column\":\"Flexible funds can also cover unexpected costs after closing\"},{\"column\":\"Adds another layer of debt and risk to your primary home\"}]}]'}\n::",{"title":382,"content":383},"Alternatives to HELOCs for your down payment","If a HELOC isn’t right for you, check out other mortgage down payment sources:\n\n* **[Cash-out refinance](/refinancing/articles/cash-out/)**: Replace your primary mortgage with a larger one and receive the difference in cash.\n* **Personal loan:** An unsecured loan that typically has higher interest rates than a HELOC.\n* **Retirement account loan:** Borrow from a 401(k) or similar plan but be aware that this reduces your retirement savings.\n* **Saving over time:** The safest option, as it avoids adding any new debt.",{"title":385,"content":386},"How to apply for a HELOC","The HELOC application process is similar to that of a mortgage: you’ll need documentation for your income, assets and the property itself. The lender will then review your equity, credit score and DTI ratio to set your borrowing limit and terms.",{"title":388,"hideTitle":27,"content":389},"FAQs: Using a HELOC for a second home","\n\n::faq{headline=\"FAQs: Using a HELOC for a second home\" :faqs='[{\"question\":\"Is a HELOC considered a second mortgage?\",\"answer\":\"Yes, a HELOC is one type of second mortgage.\"},{\"question\":\"Can you use a HELOC for the down payment on an investment property?\",\"answer\":\"Some lenders allow this, but the requirements and restrictions are often stricter than for a second home.\"},{\"question\":\"What credit score do you need for a HELOC?\",\"answer\":\"Most lenders look for a FICO credit score of 620 or higher. However, you will likely need a score of 680+ when using the HELOC for a second-home purchase.\"},{\"question\":\"How much can you borrow with a HELOC?\",\"answer\":\"HELOC lenders generally let you tap into about 85% of your home’s value after subtracting what you still owe on your mortgage and other home loans.\"},{\"question\":\"What are the risks of using a HELOC for a down payment?\",\"answer\":\"Using a HELOC for a down payment can be risky because you’ll be paying off loans for two homes, which can make managing payments difficult. HELOCs also have variable interest rates, so your payments can unexpectedly rise.\"}]'}\n::","2025-09-29T13:30:00.000Z","HELOCs are a popular and flexible way for homeowners to access the equity they’ve built, but how exactly can you use them? Lots of homeowners wonder how to pay for something using a HELOC balance or if they can use a HELOC to buy another house. The short answer is that a HELOC can be used for both, but not always. Think of it as a revolving line of credit that lets you borrow money up to a set limit and pay interest only on the amount you use. Learn how HELOCs work, how they compare to home equity loans, the pros and cons and alternative down payment financing options.",[393,394,395],"home-buying","refinancing-process","budget-planning",{"introText":397,"body":398,"text":360,"to":361},"Questions about using a HELOC for a second home?","We can walk you through eligibility, lender requirements and alternatives.",{"title":400,"description":401},"Using a HELOC Towards Buying a Second Home | Citi Mortgage","Learn if you can use a HELOC as a down payment on a second home, how lenders view it, the risks involved, and alternative financing options.","content:articles:home-loans:heloc-as-down-payment-second-home.json","Heloc As Down Payment Second Home","articles/home-loans/heloc-as-down-payment-second-home.json",[406,410,412],{"label":407,"slug":395,"seo":408},"Budget Planning",{"description":409},"Learn more about budget planning with helpful articles, tools, and guides to support your homeownership journey.",{"label":411,"slug":394},"Refinancing Process",{"label":413,"slug":393,"seo":414},"Home Buying",{"description":415},"Learn more about home buying with helpful articles, tools, and guides to support your homeownership journey.",{"_path":417,"_dir":356,"_draft":6,"_partial":6,"_locale":7,"readTime":418,"l1":356,"linkNav":419,"heroMedia":420,"teaserImage":423,"slug":425,"sections":426,"date":441,"subheadline":442,"headline":443,"dateModified":444,"isFeatured":6,"tags":445,"link":449,"seo":452,"hasSectionNavigation":27,"_id":455,"_type":78,"title":456,"_source":80,"_file":457,"_extension":78,"tagsDetails":458},"/articles/home-loans/heloc-vs-cash-out-refinance",4,{"introText":359,"text":360,"to":361},{"landscape":421,"portrait":422},"/media/heloc-vs-cash-out-refi-mobile-768x512.jpg","/media/heloc-vs-cash-out-refi-desktop-520x638.jpg",{"src":424},"/media/heloc-vs-cash-out-refi-teaser-500x500.jpg","heloc-vs-cash-out-refinance",[427,430,432,435,438],{"title":428,"content":429},"What is a cash-out refinance?","[A cash-out refinance](/refinancing/articles/cash-out/) lets you replace your current mortgage with a new, larger loan, and you pocket the difference in cash. You’ll begin repaying the new loan right away, typically at a fixed interest rate.\n\nThis option can be a smart move if you need a lump sum for a major expense and want a lower interest rate than a credit card or personal loan. Homeowners often use a cash-out refi for things like:\n\n* Home renovations\n* Debt consolidation\n* Funding a second property or business investment\n\nIt may also be a good option if you want to switch from an [adjustable-rate mortgage](/home-loans/adjustable-rate/) (ARM) to a fixed-rate loan for more predictable payments.\n\nJust a heads-up: cash-out refinances come with [closing costs,](/home-buying/articles/closing-costs/) and the math might not work in your favor if you already have a low mortgage rate.\n\nThinking about it? Be sure to run the numbers first. Use our [cash-out refinance](/calculators/cash-out-refinance/) calculator to see if it makes sense for you.",{"title":370,"content":431},"A HELOC is a flexible, revolving line of credit secured by your home. You’re approved for a set credit limit and can borrow from it as needed during the draw period (typically 10 years). You’ll only pay interest on the amount you use.\n\nA HELOC can be a good option if you:\n\n* Want access to funds over time\n* Prefer to keep your existing mortgage in place\n* Are comfortable with a variable [interest rate](/rates/)\n\nHELOCs are especially useful for ongoing or phased home improvements, or emergency expenses and unexpected costs. You can learn more about how a home equity line of credit works in our [comprehensive HELOC guide](/home-loans/heloc/).\n\n::callout{title=\"Refinancing to Fund Home Renovations\" body=\"Both HELOCs and cash-out refis can help you fund home upgrades, but they work in different ways. If you’re tackling a major renovation with a clear budget, a cash-out refi might make more sense. You’ll get a lump sum up front and predictable monthly payments. Planning a phased project or want more flexibility? A HELOC lets you borrow as needed and only pay interest on the amount you’ve borrowed during the draw period.\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::",{"title":433,"content":434},"Key differences between a cash-out refinance vs. HELOC","Here's a quick guide to help you compare.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"Cash-Out Refi\"},{\"value\":\"HELOC\"}]' :rows='[{\"column\":{\"valueOne\":\"Replaces Mortgage\",\"valueTwo\":\"Yes\",\"valueThree\":\"No (it’s a second loan)\"}},{\"column\":{\"valueOne\":\"Funds Disbursed\",\"valueTwo\":\"Lump sum\",\"valueThree\":\"As needed\"}},{\"column\":{\"valueOne\":\"Interest Rate\",\"valueTwo\":\"Typically fixed\",\"valueThree\":\"Typically variable\"}},{\"column\":{\"valueOne\":\"Monthly Payments\",\"valueTwo\":\"Full mortgage payment\",\"valueThree\":\"Interest only during draw\"}},{\"column\":{\"valueOne\":\"Upfront Costs\",\"valueTwo\":\"Higher (closing costs)\",\"valueThree\":\"Lower\"}},{\"column\":{\"valueOne\":\"Best For\",\"valueTwo\":\"One-time large expenses\",\"valueThree\":\"Ongoing, flexible access to funds\"}}]'}\n::",{"title":436,"content":437},"Is it better to refinance or get a HELOC?","The choice between a cash-out refinance and a HELOC depends on how much you need, when and how you want to repay it. A cash-out refinance gives you a lump sum up front, and usually, a fixed interest rate. In contrast, a HELOC works like a revolving credit line: you borrow only what you need, when you need it, and repay as you go—typically with a variable rate.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Don’t confuse a HELOC with a [home equity loan](/home-loans/home-equity/). While both use your home as collateral, a home equity loan provides a lump sum typically with a fixed interest rate. A HELOC, by contrast, is a revolving credit line you can tap into as needed, usually with a variable rate and interest-only payments during the draw period.\"}\n::\n\n\\\nMany homeowners compare HELOC vs. refi, or HELOC vs. cash-out refi, to find the best terms. Others weigh traditional refinance or HELOC against alternatives like home equity loans to determine which fits their goals best. This article covers various [refinancing options](/calculators/refinance/) in more depth.\n\n::content-table{headline=\"Cash-Out Refinance vs. HELOC\" :tableData='[{\"row\":[{\"column\":\"CASH-OUT REFI\"},{\"column\":\"HELOC\"}]},{\"row\":[{\"column\":\"Want a lump-sum up front\"},{\"column\":\"Want to borrow gradually\"}]},{\"row\":[{\"column\":\"Prefer a fixed rate with predictable monthly payments\"},{\"column\":\"Prefer to keep your current mortgage\"}]},{\"row\":[{\"column\":\"Don’t mind replacing your current mortgage\"},{\"column\":\"Are OK with a variable rate\"}]},{\"row\":[{\"column\":\"Have a major one-time expense\"},{\"column\":\"Need flexibility for ongoing or unpredictable expenses\"}]}]'}\n::\n\nYour long-term plans can also help guide the decision. If you expect to stay in your home for years to come—or you think interest rates may go up—a cash-out refi might lock in a better deal. If flexibility is more important, a HELOC may be the smarter path.",{"title":439,"content":440,"hideTitle":27},"Cash-out refinance vs. HELOC FAQs ","\n\n::faq{headline=\"Cash-out refinance vs. HELOC FAQs \" :faqs='[{\"question\":\"What’s the difference between a HELOC and a cash-out refinance?\",\"answer\":\"A HELOC is a separate line of credit you can draw from over time. A cash-out refinance replaces your existing mortgage with a larger one and gives you the difference in cash up front.\"},{\"question\":\"Which has lower interest rates: a HELOC or a cash-out refi?\",\"answer\":\"HELOCs often start with lower interest rates, but they’re variable, which means they can rise over time. Cash-out refinances usually have a higher rate, but they’re typically fixed, offering more stability.\"},{\"question\":\"Can I get a HELOC with bad credit?\",\"answer\":\"It’s possible, but you’ll likely face higher rates, stricter terms or a lower credit limit. Improving your credit first can help you qualify for better terms.\"},{\"question\":\"Is a HELOC or cash-out refinance better for paying off debt?\",\"answer\":\"If you need a lump sum, want a fixed rate and prefer predictable payments, a cash-out refinance may be the better choice. A HELOC offers more flexibility, but the variable rate can make it harder to predict your repayment costs over time.\"}]'}\n::","2025-09-04T08:48:00.000Z","Thinking about tapping into your home equity? Two popular options are a cash-out refinance and a HELOC (home equity line of credit). With a cash-out refinance, you replace your existing mortgage with a new one—usually at a different rate—and take out a lump sum of cash at closing. A HELOC works more like a credit card: you borrow only what you need, when you need it, and repay as you go. Choosing the right option depends on your financial goals, interest rate environment, and how you plan to use the funds. This guide helps you compare both so you can make an informed decision.","Should I get a cash-out refinance or HELOC?","2025-12-10T07:31:00.000Z",[446,447,448],"refinancing","refinance-types","heloc",{"introText":450,"body":451,"text":360,"to":361},"Need help deciding between a HELOC or cash-out refinance?","Let’s talk it through together.",{"description":453,"title":454},"Not sure whether to choose a HELOC or a cash-out refinance? Learn the pros, cons, and key differences to help decide what’s best for your financial goals. ","Cash-Out Refi & HELOC Options for You | Citi Mortgage","content:articles:home-loans:heloc-vs-cash-out-refinance.json","Heloc Vs Cash Out Refinance","articles/home-loans/heloc-vs-cash-out-refinance.json",[459,463,466],{"label":460,"slug":447,"seo":461},"Refinance Types",{"description":462},"Explore guides and tools around refinance types including when to refinance and how to maximize your savings.",{"label":157,"slug":448,"seo":464},{"description":465},"Learn more about heloc with helpful articles, tools, and guides to support your homeownership journey.",{"label":467,"slug":446,"seo":468},"Refinancing",{"description":469},"Learn more about refinancing with helpful articles, tools, and guides to support your homeownership journey.",{"_path":471,"_dir":356,"_draft":6,"_partial":6,"_locale":7,"readTime":472,"l1":356,"linkNav":473,"heroMedia":474,"teaserImage":477,"slug":479,"sections":480,"date":502,"subheadline":503,"headline":504,"isFeatured":6,"tags":505,"leadGenLoanPurpose":157,"link":508,"seo":512,"hasSectionNavigation":27,"_id":515,"_type":78,"title":516,"_source":80,"_file":517,"_extension":78,"tagsDetails":518},"/articles/home-loans/fed-rate-impact-heloc-home-equity",6,{"introText":359,"text":360,"to":361},{"landscape":475,"portrait":476},"/media/fed-rate-impact-heloc-home-equity-mob.jpg","/media/fed-rate-impact-heloc-home-equity-dsk.jpg",{"src":478},"/media/fed-rate-impact-heloc-home-equity-teaser.jpg","fed-rate-impact-heloc-home-equity",[481,484,487,490,493,496,499],{"title":482,"content":483},"HELOC vs. home equity loan—what’s the difference?","Let’s start with the basics: [home equity lines of credit (HELOCs)](/home-loans/heloc/) and [home equity loans](/home-loans/home-equity/) are both ways to borrow money against the equity you’ve built in your home. However, they work differently. A HELOC gives you an adjustable-rate line of credit to draw from as needed. In contrast, a home equity loan provides a lump sum of money up front at a fixed interest rate.\n\nHere, we’re focusing on rate structure. With a HELOC, your rate can rise or fall with market conditions, which means your monthly bill could change. With a home equity loan, your rate stays locked for the entire loan term, giving you predictable payments. If you’re looking for a deeper dive into how they compare, learn more [here](/home-loans/articles/heloc-vs-home-equity-loan/).\n\n::content-table{headline=\"HELOC vs. home equity loan\" :tableData='[{\"row\":[{\"column\":\"Feature\"},{\"column\":\"HELOC\"},{\"column\":\"Home equity loan\"}]},{\"row\":[{\"column\":\"Borrowing style\"},{\"column\":\"Flexible, borrow as needed\"},{\"column\":\"One-time lump sum\"}]},{\"row\":[{\"column\":\"Rate type\"},{\"column\":\"Variable, tied to the market\"},{\"column\":\"Fixed for the loan term\"}]},{\"row\":[{\"column\":\"Payment structure\"},{\"column\":\"Revolving debt, pay interest only on what you use during the draw period\"},{\"column\":\"Predictable monthly payments\"}]},{\"row\":[{\"column\":\"Term\"},{\"column\":\"Ongoing line of credit\"},{\"column\":\"Fixed term (usually 5–30 years)\"}]}]'}\n::",{"title":485,"content":486},"How the Fed & prime rate move together","The [Federal Reserve](/rates/articles/federal-reserve-interest-rates/) tweaks its federal funds rate—what banks charge each other for overnight loans—to influence inflation and employment. When the Fed revises this rate, it impacts important interest benchmarks like the prime rate, which lenders use as a rate-setting guide. Typically, the prime rate is about 3% higher than the Fed rate.\n\nHere's what that means for you: when the Fed changes its rate, the prime rate shifts in the same direction. That’s when lenders adjust their HELOCs and sometimes home equity loan offers. However, if you already have a home equity loan with a fixed rate, your payments stay the same. If you have a HELOC, expect your rate to move with the market.\n\n### **How lenders set rates: key terms explained**\n\nWhen lenders price loans, they start with the prime rate and add on other factors. Here are the basics you’ll see in your loan paperwork:\n\n**Index**: The benchmark rate your loan follows, usually the prime rate.\n\n**Margin**: A set percentage added to the index based on factors like your credit score, home equity and market conditions.\n\n**Spread**: The gap between your total rate and the benchmark.\n\n**Floor:** The lowest rate you'll pay on a HELOC, regardless of the prime rate.\n\n**Cap:** The highest rate you’ll pay on a HELOC, protecting against large rate hikes.",{"title":488,"content":489},"When & how HELOC rates adjust","### **Adjustment timing and billing cycles**\n\nWhen do HELOC rates change? While market rates may shift daily, your personal HELOC rate will usually adjust periodically. When shifts do happen, they can happen pretty quickly. You might notice a change in your rate and payment within one or two billing cycles, typically in one to two months.\n\n### **Example timeline after a rate change** \n\nLet's walk through what might happen when the Fed makes a rate cut:\n\n1. **Fed decision**: The Fed announces a 0.25% rate cut, say, from 4.25% to 4.00%.\n2. **Prime rate adjustment**: The prime rate follows suit, dropping from 7.25% to 7.00% in the subsequent days.\n3. **HELOC rate shift**: Your HELOC rate changes on the next scheduled adjustment date. If your margin is 1%, your rate could go from 8.25% to 8.00%.\n4. **New billing cycle**: Within one or two billing cycles, you see a drop in your HELOC rate and a lower monthly payment.",{"title":491,"content":492},"How home equity loan rates react","What about the federal funds rate and home equity loans? Unlike HELOCs, home equity loans come with fixed rates. That means if you already have one, your monthly payment won’t change when the Fed adjusts interest rates—unless, of course, you [refinance](/refinancing/) later.\n\nIf you’re shopping for a new home equity loan, Fed rate changes can influence the rate lenders offer you. Ultimately, the rate you receive will depend on market conditions, your credit profile and the equity you’ve built.",{"title":494,"content":495},"Risk scenarios & what homeowners should watch","For HELOC borrowers, the primary risk is the variable interest rate, which can lead to higher payments. Let’s put that into context so you can avoid payment shock.\n\n### **Payment shock examples**\n\n::content-table{headline=\"Rate hikes in action\" body=\"Let’s say you have a $30,000 HELOC starting at 8.00% APR over a 20-year draw period. Here’s how rate hikes could affect your monthly bill.\" :tableData='[{\"row\":[{\"column\":\"APR change\"},{\"column\":\"Monthly payment\"}]},{\"row\":[{\"column\":\"8.00%\"},{\"column\":\"$251\"}]},{\"row\":[{\"column\":\"8.50%\"},{\"column\":\"$260\"}]},{\"row\":[{\"column\":\"9.00%\"},{\"column\":\"$270\"}]},{\"row\":[{\"column\":\"10.00%\"},{\"column\":\"$290\"}]}]' support=\"*For illustrative purposes only. Examples based on an interest-only HELOC with a 20-year draw period.\"}\n::\n\n### **When rate drops may be limited**\n\nNaturally, we all want the lowest interest rate. But there are limits to how far and fast rates can drop. A few common restraints include:  \n\n**Floors:** If your HELOC has a minimum rate, you won’t see it drop below that level even if the Fed continues to cut.\n\n**Margins:** Lenders add a fixed percentage to the prime rate.\n\n**Lender policies:** Some lenders may structure the timing of rate adjustments differently.\n\n**Market dynamics:** A Fed rate change is just one factor that influencers borrowing costs. Other market conditions or economic factors can keep rates high or delay a decrease.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Use [our HELOC Calculator](/calculators/heloc/) to preview how rate changes may affect your monthly payment. Input different floor and cap rates to explore best- and worst-case scenarios before you take on a HELOC.\"}\n::",{"title":497,"content":498},"How to mitigate rate risk","Let’s cover some steps you can take to help protect yourself from those rate hikes:\n\n* **Pay down balances faster:** If you can afford it, putting extra money toward your HELOC balance can reduce the amount exposed to rate changes. When you shave down the principal, you rack up less interest overall.\n* **Convert part of a HELOC to a fixed rate:** Some lenders let you lock in a portion of your balance at a fixed rate. This gives you temporary rate stability, but you may face potentially higher rates, conversion fees or missing out on future rate cuts for the fixed portion.\n* **Refinance:** If you aren’t happy with your terms, you might consider replacing your current loan to get a lower fixed rate or more favorable repayment structure. [Before you refinance](/refinancing/articles/when-to-refinance-mortgage/), make sure you plan to stay in your home long enough to recoup the closing costs.\n* **Understand your terms:** It may sound obvious, but diving into the details of a prospective or current loan could save you surprises down the road. When you know key details like the margin, floor or cap, you’re in a better position to handle rate hikes.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP \" text=\"Remember that your personal finances—including your [credit profile](/home-loans/articles/residential-mortgage-credit-report/), available equity and long-term goals—will ultimately shape what borrowing option makes the most sense, no matter what the Fed decides.\"}\n::",{"title":500,"hideTitle":27,"content":501},"FAQs","::faq{:faqs='[{\"question\":\"How quickly will my HELOC payment change after a Fed move?\",\"answer\":\"Many HELOC rates adjust within one or two billing cycles, but the exact timing depends on your lender’s policies.\"},{\"question\":\"Can I lock or fix part of a HELOC balance?\",\"answer\":\"Some lenders allow you to convert part of your balance into a fixed-rate option. Ask about the terms since options differ by lender.\"},{\"question\":\"Is now a good time to open a home equity loan vs. a HELOC?\",\"answer\":\"It really depends on what you're looking for. If you want a set amount and steady payments, a home equity loan is a solid choice. But if you want flexibility and don't mind variable rates, a HELOC might be more your style. Just consider current interest rates and your financial situation.\"},{\"question\":\"Should I refinance my HELOC into a fixed-rate home equity loan?\",\"answer\":\"If you're concerned about rising rates and want stable monthly payments, refinancing into a fixed-rate loan can provide stability. Just weigh the pros and cons, like potential fees and closing costs, before deciding.\"},{\"question\":\"Which option fits my situation best?\",\"answer\":\"If you need a set amount up front or prefer a fixed rate, a home equity loan can work well. If you want the flexibility to borrow over time and are comfortable with a variable rate, you might opt for a HELOC. Seeking professional guidance can help you make an informed choice for your long-term goals.\"}]' headline=\"FAQs: Fed rate impacts\"}\n::","2025-10-27T08:43:00.000Z","When a new Fed rate hits the headlines, how does it affect home equity borrowing? The Federal Reserve's interest rate changes affect the overall cost of borrowing, including loans against your home. HELOC interest rates are variable, so Fed decisions can affect the monthly payments for current borrowers and the rates available to new borrowers. Meanwhile, home equity loan rates are fixed, so Fed rate changes only affect the rates offered on new loans, without impacting existing ones. Let’s unpack what these rate fluctuations could mean for you, go over the risks and explore strategies to make the best of any rate environment.","How the Fed rate impacts HELOC & home equity loans",[506,448,507],"home-equity-loans","rates",{"introText":509,"body":510,"text":511,"to":361},"Still not sure how to use your home equity?","We can walk through how current rates affect your borrowing options.","Connect with a Citi Mortgage Representative",{"description":513,"title":514},"Explore how the Federal Reserve’s rate decisions influence HELOCs and home equity loan rates. Learn when your rate may adjust and how to plan accordingly.","How the Fed Rate Impacts HELOC & Home Equity Loans |  Mortgage.com","content:articles:home-loans:fed-rate-impact-heloc-home-equity.json","Fed Rate Impact Heloc Home Equity","articles/home-loans/fed-rate-impact-heloc-home-equity.json",[519,463,523],{"label":520,"slug":506,"seo":521},"Home Equity Loans",{"description":522},"Explore resources about home equity loans—including types, requirements, and how to choose the right mortgage option.",{"label":13,"slug":507,"seo":524},{"description":525},"Stay informed about rates. Explore market trends, rate factors, and tips to lock the best mortgage rate.",1775249710250]