Last updated: November 2025
Quick Answer
Rising home values increase your tappable equity, making now an ideal time to consider a HELOC. With more equity, you may qualify for larger credit limits, better terms, and the flexibility to access funds without refinancing or selling your home.
A HELOC lets you leverage your property’s growth to meet financial goals.
What is a HELOC?
A home equity line of credit (HELOC) is a revolving line of credit that lets you borrow against the equity in your home. It works similarly to a credit card but is backed by your property. You can draw from it as needed—typically over a 10-year period—then repay it during the repayment term.
HELOCs offer flexible access to funds and interest-only payments during the draw period, making them ideal for recurring or variable expenses like:
Access cash within days
Tap into your home’s potential in minutes. Start our streamlined digital application to discover if a HELOC is right for you.
How rising home values increase your borrowing power
When your home’s value rises, so does your equity. Equity is the difference between your home’s current market value and what you still owe on your mortgage.
As your home appreciates, your loan-to-value ratio (LTV) improves, which directly affects HELOC eligibility and limit.
Example:
| Home value | Mortgage owed | Home equity | Potential HELOC (up to 85% LTV) |
| $400,000 | $250,000 | $150,000 | $90,000 |
| $500,000 | $250,000 | $250,000 | $175,000 |
The increase in home value results in more tappable equity without changing your mortgage.
Why 2025 is a strategic time to tap home equity
Many U.S. homeowners have seen sharp increases in property values over the past few years. According to current market trends, home equity nationwide has grown significantly, even in non-coastal regions.
If your home is worth more now than when you bought it, you’re likely holding untapped equity. Rising values make it possible to:
- Qualify for a HELOC without refinancing your mortgage
- Borrow at a lower interest rate than personal loans or credit cards
- Avoid selling your home to access cash
Read more: How does a HELOC work?
Benefits of using a HELOC in a strong housing market
When property values are climbing, a HELOC becomes a more powerful financial tool. Here’s why:
- Higher credit limits: Lenders may allow you to borrow up to 85–90% of your home’s value
- Better terms: More equity can improve your interest rate or approval odds
- Faster approval: Strong LTV ratios streamline underwriting
- Liquidity without disruption: Access funds without selling your home or refinancing
A HELOC can help you take advantage of your home’s appreciation while retaining ownership and long-term value.
What to consider before applying for a HELOC
While HELOCs offer flexibility, they are still secured loans. Consider the following before applying:
- Interest rate structure: Most HELOCs have variable rates. Know your cap.
- Repayment timeline: Draw period vs. repayment period terms.
- Credit requirements: Lenders often require a credit score of 660 or higher.
- Appraisal needs: A lender may require a formal appraisal to confirm your home’s value.
Common HELOC qualification criteria
| Requirement | Typical Benchmark |
| Credit score | 660+ |
| Debt-to-income ratio | Below 43% |
| Loan-to-value (LTV) | Max 85–90% after HELOC |
| Equity needed | Minimum $50,000 suggested |
Learn: Use our HELOC calculator.
Alternatives to a HELOC: Cash-out refinance or personal loan?
A HELOC isn’t your only option to access equity, but it often offers more flexibility:
| Feature | HELOC | Cash-out Refinance | Personal Loan |
| Tied to home equity | Yes | Yes | No |
| Interest rate | Usually lower than personal loans | Often fixed | Usually higher |
| Repayment structure | Revolving line; flexible draw | New mortgage replaces current loan | Fixed repayment schedule |
| Best use case | Ongoing or flexible expenses | Large one-time expenses | Smaller, unsecured needs |
In a rising market, a HELOC typically provides the best mix of flexibility and affordability for homeowners who don’t want to reset their mortgage.
Learn: How to apply for a HELOC.
Risks and considerations with borrowing against increased equity
Accessing home equity offers advantages, but you should weigh the long-term impact:
- Market risk: If values drop, your equity shrinks, increasing your LTV
- Debt risk: You’re putting your home on the line, and default can lead to foreclosure
- Payment shock: Variable interest rates can rise over time
- Discipline needed: Because it’s revolving credit, overspending can be a risk
Still, when managed responsibly, HELOCs provide one of the most cost-effective and flexible borrowing options available to homeowners today.
Rising home values make now the right time to act
Your home’s appreciation isn’t just a number on paper—it’s usable equity that strengthens your financial position.
A HELOC lets you access that value without refinancing or selling. With higher property values and favorable borrowing conditions, this may be the best time to take action.
Ready to use your home’s value to your advantage? Estimate how much more you could borrow today.
FAQ: Using a HELOC due to rising home values
Q: How does rising home value affect my HELOC limit?
A: A higher home value increases your available equity. Lenders typically let you borrow up to 85% of your home’s value minus your current mortgage balance.
Q: Is now a good time to open a HELOC?
A: If your home has appreciated significantly and you meet credit and income requirements, now may be an excellent time to open a HELOC while values remain strong.
Q: Will I need a home appraisal to qualify for a HELOC?
A: In most cases, yes. Lenders require a current appraisal or valuation to confirm your home’s worth before approving a HELOC.
Q: Can I get a HELOC if I still have a mortgage?
A: Yes. Most HELOCs are approved at the same time as your existing mortgage. The amount you can borrow depends on your home equity and creditworthiness.
Q: Is it better to get a HELOC or a refinance?
A: If you like your current mortgage rate and want flexible access to cash, a HELOC is often better. Refinancing may be more suitable for large lump-sum needs.
