How Massachusetts residents are using HELOCs to finance major life events

Many Massachusetts homeowners use a home equity line of credit (HELOC) as a financial safety net for unexpected expenses to quickly access the funds they need for medical bills and other urgent costs.

But because HELOCs are an affordable and flexible way to borrow, homeowners aren’t just using them as emergency-only tools anymore. Instead, they're now using them as strategic financial resources for a wide range of needs. Discover how Massachusetts homeowners are leveraging home equity for important life milestones.

What is a HELOC?

A home equity line of credit (HELOC) is a revolving line of credit that lets you borrow against the equity you’ve built in your home. Like a credit card, you can draw funds up to your approved limit as needs come up (such as major life events) and pay back what you borrow over time. Depending on the lender, you may be able to access funds conveniently through online and mobile banking, and some lenders offer no application fees or closing costs, such as Citizens.

How a HELOC works

To keep the borrowing process straightforward, it helps to know the key terms you’ll see when you apply and start using the line:

• Credit limit: The maximum amount you can borrow from the line at any given time.
• Available credit: What you have left to borrow after subtracting your current balance from your credit limit.
• Draw period: The window of time when you can access funds, repay, and borrow again (often around 10 years).
• Repayment period: The phase after the draw period ends, when you typically repay both principal and interest and can no longer take new draws.
• Variable rate (APR): Many HELOCs have a variable rate that can change over time and is often tied to a benchmark like the Prime Rate, which may affect your payment amount.
• Interest-only payments: During the draw period, some HELOCs allow payments that cover only interest on what you’ve borrowed (not the principal).
• Equity and loan-to-value (LTV): Equity is the portion of your home you own (home value minus what you owe). LTV helps lenders decide how much you may be able to borrow.

Common planned uses for a HELOC

Because HELOCs are revolving lines of credit secured by your home’s equity, they can be a flexible way to pay for planned expenses over time especially when you want to borrow only what you need, when you need it. Many lenders also make it easy to access funds through online and mobile banking; for example, Citizens offers convenient digital access and may offer no application fees or closing costs.

• Renovations (especially older homes that may need phased projects over time)
• Education expenses
• Large family events

If you’re planning ahead, it also helps to understand the two periods to a HELOC:

• The draw period: The draw period is when you can access funds, typically lasting 10 years.
• The repayment period: After the draw period, you enter the repayment period, when you typically repay both principal and interest and can no longer take new draws.

Many homeowners prefer HELOCs for planned expenses because they often have lower interest rates than credit cards and personal loans and you only pay interest on the amount you borrow instead of the full credit line. HELOC interest may also be tax-deductible for qualified home improvements and additions.

When homeowners use a HELOC for unexpected needs

Even if you don’t have a big purchase on the calendar, some homeowners keep a HELOC as a backup option for costs that are hard to predict with the ability to draw funds up to the credit limit when timing matters.

• Medical or caregiving costs
• Temporary income disruption
• Urgent home repairs (roof, heating, plumbing and other essential fixes)

Top major life events you can finance with a HELOC

You typically don't have restrictions on how you use a HELOC, so you can utilize the funds for a variety of life events. You can access funds for a single large expense or tap into your credit line over time as different needs arise.

Here are some of the most common HELOC uses:

Home improvements and renovations

Many Massachusetts homeowners use HELOCs to help pay for a variety of home renovations and improvements:

• Kitchen and bathroom remodels
• Additions
• Finishing basements and attics
• Improving energy efficiency

The right upgrades can make your home more comfortable and increase its value. If you later decide to sell, the money you invested could be offset by the increased equity, which means the project paid for itself.

Investment property

Waiting to purchase an investment property until you save the down payment could delay your potential to earn rental income and build equity. With a HELOC, you can access funds for a down payment and move quickly when you find the right opportunity.

You can also use HELOC funds for investment property renovations and ongoing expenses, like:

• Property taxes
• Insurance
• HOA fees
• Utilities and maintenance

Although a HELOC can help you get started, careful cash flow planning and risk management are essential for long-term success.

Higher education and professional development

Using HELOCs for education can help cover college tuition, graduate programs and professional certifications. They can be a flexible source of funds for books, supplies, fees and other ongoing expenses.

HELOC rates are generally lower than private student loans, and interest-only payments during the draw period can also help with budgeting while you work toward increasing your earning potential.

Starting or expanding a business

If you're thinking about starting a business or expanding an existing one, a HELOC can help cover startup costs, equipment purchases and inventory.

Traditional business loans often have stricter qualification requirements. You may have to provide personal and business tax returns, financial statements, ownership documents and cash flow projections. They also tend to have higher rates than HELOCs.

Wedding and family celebrations

Family celebrations and events are opportunities to create lasting memories with friends and family. You can use a HELOC to fund weddings, family reunions and milestone celebrations to help cover the cost of:

• Venue
• Tents and canopies
• Tables and chairs
• Lighting
• Entertainment and food

Before you borrow, carefully plan your event and avoid lifestyle inflation to prevent overspending.

Vacation and travel

Do you need a way to fund a once-in-a-lifetime trip, extended travel or family vacation? A HELOC can help you pay for:

• Airfare
• Lodging
• Meals
• Rental cars
• Other travel expenses

Using HELOC funds for planned, high-value experiences instead of impulse purchases can help you stay on budget.

Choose a HELOC today

HELOCs are popular with Massachusetts homeowners because they're a flexible and affordable way to access funds. You can borrow what you need, when you need it, and rates are often lower than credit cards and personal loans. You can use HELOCs for many different life events, and interest-only payments during the draw period can help with budgeting and cash flow.

Ready to take the next step? Get your HELOC rate today to see how much you can save on financing.

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