AARP Hearing Center
4 Ways to Use a Home Equity Line of Credit
From home renovations to debt payoff, a HELOC offers flexible access to your home’s value
6-minute read
VIDEO: How to Get Your Money Out of Your House
Key takeaways
- Homeowners 62 and older have a record-high $14.92 trillion in home equity.
- HELOC funds can help cover home repairs or renovations that support aging in place.
- Because interest is charged only on money withdrawn, a HELOC can serve as a source of funds in an emergency.
Home equity is a powerful thing. And if you’re like many older homeowners, you probably have quite a bit of it.
According to the National Reverse Mortgage Lenders Association, homeowners 62 and older have a record $14.92 trillion in home equity. Thanks to rising home values, they gained more than $314 billion in just the first quarter of 2026 alone.
More Ways to Benefit
- Related Benefit 1
- Related Benefit 2
- Related Benefit 3
- Related Benefit 4
- Related Benefit 5
One way to cash in on your equity is to open a home equity line of credit, or HELOC. A HELOC provides an open line of credit that you can tap at any time during the term of the loan. You’ll only pay interest on the amount you borrow. For example, if you have a HELOC for $25,000 and borrow $10,000 to pay for a new roof, you’ll only pay interest on the $10,000.
During what’s known as the draw period, which typically ranges from three to 10 years, you can borrow up to the amount of your credit limit. You have the option to make interest-only payments during this period; any payment beyond that will go towards the principal. Once the draw period ends, you’ll be required to start repaying the balance according to your lender’s repayment schedule, which typically lasts 10 to 20 years.
Here are four ways you might want to spend the money.
To make your home more accessible
One way to use HELOC funds is to pay for accessibility updates. With the median cost of an assisted living facility clocking in at $74,400 per year, according to a 2025 Genworth survey, many older adults are opting to age in place.
This comes with its own set of challenges, though. And for many older homeowners, aging in place will require updating their property — adding more lighting for better visibility, widening doorways to account for walkers and wheelchairs, or installing grab bars or walk-in showers, to name a few.
“HELOCs are a good resource to make all sorts of updates to one’s house — including accessibility updates,” says Kevin Leibowitz, a mortgage broker with Grayton Mortgage in Brooklyn, New York.
One perk of using HELOC funds toward accessibility improvements is that it could qualify you for a tax write-off. As long as you use the funds to “buy, build, or substantially improve” your house, you can deduct the interest you pay on a HELOC from your taxable income.
To repair or improve your house
You could also use funds from a HELOC to cover other home improvements and repairs. For example, you might use the money to replace a damaged roof or fix a broken water heater. Home renovations can add value to your home — through a room addition or kitchen remodel, perhaps. “Some also use a HELOC to purchase investment property and remodel those for flips or long-term rental properties,” says Mason Whitehead, branch manager at Churchill Mortgage in Dallas.
To pay off higher-interest debts
You might also use HELOCs to pay off other debts. This may make financial sense because HELOCs typically have lower rates than those offered on other financial products, particularly credit cards (the average credit card interest rate in May was 20.94 percent).
“HELOC interest rates are typically about half those of credit cards,” says John Aguirre, a loan officer at Loantown in Del Mar, California.
Jon Hill, a 51-year-old wedding officiant at the Dudeist Ministers in Cincinnati, knows this firsthand. Four years ago, he took out a $70,000 HELOC to help pay off his credit card debts. “During COVID I was out of work, so I had run up a lot of debt,” Hill says. “[The HELOC] paid that off.” Hill estimates the move saved him anywhere from 15 to 20 percent on interest costs.
If you’re considering using a HELOC to pay off high-interest credit card debt, make sure you have a plan to avoid racking up credit card debt again in the future. As Whitehead explains: “Remember, 90 percent of money management is behavior. If you have a history of getting into credit card debt, then using a HELOC to pay off that debt likely just means you’ll be in credit card debt again within a few years and have less equity and now a HELOC payment also to balance.”
Be aware that credit card debt is unsecured debt, while a HELOC is secured debt — meaning it’s backed by the value of your home. If you can’t pay your credit card debt, you won’t lose your home, but you can lose your home if you can’t pay the HELOC. So be sure you can make the HELOC payments, especially in the later years when both principal and interest are due.
“Borrowers should create a long-term budget that includes plans for financial emergencies like job loss, illness or death of a spouse, so that they are prepared to make HELOC payments in the future,” says Lori Trawinski, senior director of finance and employment at the AARP Public Policy Institute. “Using a HELOC to pay off a credit card is more than a decision about interest rates.”
To provide a financial safety net
A HELOC could also be useful in the event you need to cover unexpected costs from an emergency, such as a car accident or sudden hospitalization.
The good thing about this strategy is that you won’t pay interest on the HELOC until you actually withdraw funds. This is different from a traditional loan, in which you’d start paying interest on the entire loan amount right away.
While reverse mortgages can also serve as a similar safety net, giving you access to regular funds over time, HELOCs are usually the more affordable choice. “HELOCs can be a more cost-effective way to access equity compared to a reverse mortgage, as they typically involve significantly lower fees — often by a factor of at least five to one,” Aguirre says. “Reverse mortgages are much more expensive to obtain.”
Run the numbers
Whatever you use a HELOC for, make sure you have a plan for paying it off, and take the time to do a cost-benefit analysis before moving forward. “You may use [a HELOC] for a family vacation, but then you need to factor in the payments going forward and how long it will take you to pay it off,” Whitehead says. “The cost over time with interest may end up adding way more onto the cost … [making] it not worthwhile.”
AARP Membership
Join AARP for only $15 per year with automatic renewal. Get instant access to members-only products and hundreds of benefits, a free second membership, and a subscription to AARP The Magazine.
More From AARP
Should I Buy Flood Insurance?
Many homeowners don’t realize they need coverage until their home is flooded
These Money-Saving Hacks Don’t Work
Some cost-cutting strategies aren’t worth the hype
10 Times You Should Ask for a Deal
Negotiate for savings in these everyday situations