Appliances play an essential role in everyday life in today’s homes. No modern home can do without these features, from refrigerators and washers to HVAC systems that control heating and cooling.
Upgrading or replacing home appliances can be a significant financial investment, especially when dealing with high-ticket items.
Fortunately, if you’re a homeowner, there’s an alternative way to achieve appliance financing or HVAC financing: tapping into your home equity.
In this article, we’ll explore how using a Home Equity Line of Credit (HELOC) for appliance financing can be cost-effective, especially for major purchases like HVAC systems.
The importance of appliances in modern homes
Appliances have become the backbone of modern home living. A functional kitchen, a well-maintained laundry room, and a comfortable climate control system make a house feel like a home.
But over time, appliances age, lose efficiency, or even break down, necessitating repairs or replacements.
In other cases, homeowners may upgrade to more energy-efficient models to reduce their utility bills or improve their home’s environmental footprint.
Why appliance financing can be a major priority
Appliances such as HVAC systems, refrigerators, stoves, and washers are not just conveniences but necessities.
A malfunctioning HVAC system while you are in the middle of summer or winter can severely impact your family’s comfort. At the same time, an outdated refrigerator may affect food safety and energy usage.
Many homeowners face challenges when these essential appliances require repair or replacement, and the cost can quickly add up.
The cost of new appliances
The price tag of new appliances can vary greatly depending on product type, brand, and features. For example:
- Refrigerators: High-end refrigerators can range from $2,300 to over $5,000, depending on features such as smart technology, energy efficiency, and storage capacity.
- Washers and dryers: A reliable washer-dryer combo can cost anywhere from $1,000 to $3,000.
- Stoves and ovens: A new stove or oven can cost between $1,200 and $3,500, especially for more advanced models with added convection or induction cooking features.
The cost of an HVAC system
One of a home’s most expensive appliance upgrades is the HVAC system.
Depending on the size of your home, replacing or upgrading an HVAC system can cost anywhere from $5,000 to $12,000 or more. This makes HVAC financing a core necessity for many homeowners when their system needs replacing.
Given these costs, homeowners often look for ways to finance large appliance purchases without depleting their savings or incurring high-interest credit card debt.
Tapping into home equity can make a significant difference.
How appliance financing through a HELOC works
A Home Equity Line of Credit (HELOC) has several unique features that homeowners could use for appliance financing:
- Homeowners can access the equity they’ve built up in their homes.
- A HELOC functions as a revolving line of credit—quite different from traditional loans.
- It provides flexibility to borrow for various expenses, including HVAC and appliance financing, without restriction.
Here’s how a HELOC can be beneficial when upgrading or replacing home appliances.
Advantages of using a HELOC for appliance financing
- Lower interest rates: Since your home secures HELOCs, they typically offer much lower interest rates compared to most credit cards or personal loans. This makes it a more cost-effective option for financing big purchases like an HVAC system over time.
- Flexible access to funds: A HELOC enables you to draw from a line of credit as needed rather than taking a lump sum upfront. This flexibility means you can finance appliance purchases as they come up, whether replacing one item or upgrading multiple appliances over time.
- Interest-only payments to start: Many HELOCs allow you to make interest-only payments during the beginning period (the “draw period”), usually lasting 5 to 10 years. This feature helps keep monthly payments lower while you finance your appliances.
- Longer repayment terms: HELOCs often offer longer repayment options than other loans, sometimes up to 20 years. This allows you to spread out payments and better manage your household budget.
- Potential tax benefits: In some cases, the interest on a HELOC may be tax-deductible, particularly if the funds are used for home improvements. Since appliances and HVAC systems can qualify as home upgrades, this could reduce your tax liability. Always consult a tax advisor to check your eligibility.
Why HVAC financing is a major consideration
One of the most significant home appliance expenses homeowners face is replacing or upgrading an HVAC system.
Heating, ventilation, and air conditioning (HVAC) systems are vital to maintaining a comfortable living environment but are also expensive to install or repair.
HVAC financing is necessary for many households, especially when faced with an emergency replacement.
HELOCs for HVACs
A HELOC for HVAC financing is a popular option because it enables borrowers to spread out the cost of such a large purchase over time.
Many homeowners who choose to upgrade to more energy-efficient HVAC systems benefit from improved performance and see reduced utility bills in the long term.
Local or federal incentives may be available for installing energy-efficient HVAC systems in some cases.
When combined with the financial flexibility of a HELOC, homeowners can take advantage of these incentives while still financing the cost of the system over an extended period.
Financing appliances with HELOC with HomeEQ
Whether upgrading to energy-efficient appliances, replacing an aging refrigerator, or financing a new HVAC system, tapping into your home equity through a HELOC can be a smart way to cover the costs.
With lower interest rates, flexible borrowing options, and longer repayment terms, a HELOC provides a cost-effective solution for homeowners financing major appliance purchases.
HomeEQ can help you get the appliances you need
If you’re considering new appliances or HVAC financing, explore your options with a HomeEQ HELOC and remove the stress of upgrading your home essentials.
Our revolutionary new streamlined platform offers a much quicker and easier experience than traditional banking—get your approval in minutes and, if approved, your funds in mere days.
Finance your next appliance purchase with HomeEQ today with our simple digital HELOC application.
