Home Equity Line Of Credit (HELOC) Definition Investopedia

Several factors can lead to strong growth rates in this type of borrowing:

-Increased retail sales channels, which have brought HELOCs to the masses. Most of these sales channels come from local banking institutions.
-Rising home values, which increase the amount of equity available to homeowners
-Prevailing low interest rates coupled with moderate inflation
-The fact that mortgage interest is often tax-deductible, making it more attractive than alternative borrowing methods

Because HELOC interest is variable, homeowners must be aware of prevailing interest rates -a spike can cause repayment balances to rise rapidly.