Home Equity Line
of Credit (HELOC)
You asked, and it's here: Pennymac now offers a home equity line of credit. A HELOC lets you borrow against the equity you've built as you need it, while your existing first mortgage stays exactly as it is — same rate, same term, same monthly payment.
Available in select states: AZ, CA, DE, FL, GA, OR, SD, VA and WA
A HELOC May Be a Great Fit if You:
A HELOC May Be a Great Fit if You:
- Need funds on hand for unexpected costs
- Aim to keep your current mortgage rate, term and monthly payment
- Have a project to fund that will unfold in stages
- Would like to access equity cash, but not sure how much you need
See What a HELOC Can Do for You:
See What a HELOC Can Do for You:
Leave your current first mortgage, and its rate, untouched
Access a credit line from $25,000 up to $500,000
Draw funds over time rather than all at once
Pay interest only on the amount you have borrowed Reuse your available credit as you repay during the draw period
Ready to take the first step?
We're here to help.
Ways to Use a HELOC
Home Renovations
and Repairs
- Draw funds as the work progresses instead of all at once
- Cover a phased project without borrowing ahead of the invoices
- Get a tax deduction on interest used for substantial home improvements*
- Homeowners tackling a kitchen, an addition or a multi-stage remodel
Debt Consolidation
- Combine credit cards, auto loans and other higher-interest debt
- Simplify what you owe into one monthly payment
- Lower the rate you are paying on that balance
- Homeowners carrying balances at rates well above what a line secured by their home can offer
Major and
Unexpected Expenses
- Keep credit available for medical bills, tuition or an urgent repair
- Pay interest only on what you actually use
- Turn to your equity instead of a high-rate credit card
- Homeowners who want a financial safety net in place for the unexpected
Explore Our Other Home Equity Options
Home Equity Loan
- Receive your funds in a single lump sum
- Get a fixed rate and a fixed monthly payment
- Keep your first mortgage in place
- Homeowners with a low primary mortgage rate who know exactly how much they need and want a fixed, predictable payment
Cash-Out Refinance
- Refinance your mortgage for a higher balance and take the difference in cash
- Pay one monthly mortgage payment instead of two
- Replace your current loan, including its rate and term
- Homeowners who want a large lump sum and would benefit from changing the terms of their existing mortgage
Resources & Tools
Customized Rate Quote
Create an instant estimate of your monthly payment and interest rate based on your information and current rates. You can also talk to a Pennymac Loan Expert for a one-on-one review of your options.
Personalize My Rate
Home Value Estimator
Receive an instant home value estimate and up-to-date information on any property. Knowing what your home is worth today is the first step to understanding your equity.
Try It Now
Mortgage Learning Center
Explore quick reads to get the information you need, so you can feel confident about how you use your equity.
Search Articles
Mortgage Calculators
Use simple calculators to explore what your potential payments could be using different loan scenarios.
Start CalculatingFrequently Asked Questions About HELOCs
What Is a HELOC?
A home equity line of credit, or HELOC, is a revolving credit line secured by the equity in your home — the difference between what your home is worth and what you still owe on your mortgage. Rather than receiving a lump sum, you are approved for a maximum amount and can draw from it during the draw period. Because the line sits behind your existing mortgage, it is sometimes called a second lien or second mortgage.
Our home value estimator can give you a sense of what your home may be worth today.
Will a HELOC Change My Current Mortgage Rate?
No. A HELOC is a separate loan that sits behind your existing first mortgage. Your first mortgage keeps its current rate, term and monthly payment. You will make payments on the HELOC in addition to your existing mortgage payment.
How Is a HELOC Different From a Home Equity Loan?
Both let you borrow against your equity while leaving your first mortgage in place. A home equity loan pays out in one lump sum with a fixed rate and a fixed payment. A HELOC gives you a credit line you can draw from over time, and as you repay what you have borrowed during the draw period, that credit becomes available again.
How Much Can I Borrow?
Pennymac HELOCs range from $25,000 to $500,000. The line you qualify for depends on your home's value, your existing first mortgage balance, your credit profile and your debt-to-income ratio. A loan officer can walk you through an estimate.
Is There a Minimum Amount I Have to Draw at Closing?
Yes. Your initial draw must be at least the greater of $25,000 or 75% of your total line amount. Your loan officer will confirm the figure for your line before you close.
Is HELOC Interest Tax Deductible?
It may be, if you use the funds for substantial improvements to the home securing the line, you itemize your deductions, and your total mortgage debt falls within IRS limits. Consult a tax adviser for guidance on your specific situation.
What Happens if I Sell My Home Before the HELOC Is Paid Off?
Any balance on the line will need to be paid off to complete the sale, along with your first mortgage balance. Make sure the sale proceeds cover both.
How Do I Get Started?
Call a Pennymac Loan Expert at 866.549.3583, or start online and we will reach out to you.
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