Should I use a HELOC to pay for renovations?

A home equity line of credit (HELOC) lets you borrow against your equity as needed, like a credit card secured by your home, with a variable rate and a draw period before repayment begins. It's flexible for renovations done in phases because you only borrow – and pay interest on – what you actually use. The trade-off: the rate is usually variable, so payments can rise, and because your home is collateral, falling behind can put it at risk. Compare it to a cash-out refinance (one new fixed loan) and a home equity loan (a fixed lump sum). For ongoing or uncertain project costs, a HELOC's draw-as-needed structure often wins; for a single large fixed cost at low rates, a fixed-rate option may be cheaper. Borrow only what improves the home's value or your life, not the maximum offered.