What is the banking product that lets customers borrow against the equity in their home through a reusable credit line called?

A home equity line of credit is a reusable credit line secured by the borrower’s home.

Often shortened to HELOC, this product lets a homeowner borrow up to an approved limit based partly on home equity. During a draw period, the borrower can generally take funds, repay them, and borrow again, much like a revolving account.

HELOCs commonly have variable interest rates, so required payments can change as market rates move. After the draw period ends, the account enters a repayment phase, when new borrowing may stop and the outstanding balance must be repaid under the agreement.

A HELOC differs from a home equity loan, which usually provides a single lump sum with a scheduled repayment plan. Because the home secures the line, failure to repay can put the property at risk, even though the borrowing may be used for purposes unrelated to the home.