The Quick Read: A HELOC runs in two phases, and the contract sets each one. The common pattern is a draw period of 5 to 10 years followed by a repayment period of 10 to 20 years, so total life often lands between 15 and 30 years. The 10-plus-20 split is a pattern, not a rule.
- The draw period is when you can borrow, repay, and borrow again up to the limit.
- The repayment period closes the line to new draws and starts paying the balance down.
- Payments usually step up at the switch, because principal joins the interest.
- Some lines carry a balloon, which means the whole balance comes due when the draw ends.
- On Lendmire’s wholesale network, investment-property lines run a 5-year draw and a 25-year repayment.
A reader who sees “10-year HELOC” in one place and “30-year HELOC” in another is not looking at a contradiction. They are looking at the same product described two ways. This page shows how the two phases add up, where the term changes, and what an investor should check before signing.
How large a line the equity supports.
An equity line is sized by combined loan-to-value, occupancy, and credit — not by rental coverage. Switch the occupancy or the credit band and the ceiling moves with it.
Investment-property lines require a 700 minimum credit score; second-home lines start at a 640 minimum and primary-residence lines at 600, and the combined-LTV ceiling steps down as the credit band drops on primary-residence and second-home lines and holds on investment-property lines; the line cap steps down on primary-residence lines and holds at every tier on investment-property and second-home lines.
A debt-to-income ratio above 45% requires 680+ credit. Profiles under 640 are limited to single-family homes. At least 75% of the approved line is drawn at closing. Ceilings, floors, and caps update from Lendmire’s centralized guideline source.
Line estimate
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. The rate is an editable assumption; equity-line pricing is variable through both the draw and repayment periods and never converts to fixed. Occupancy and credit drive the ceiling together: an investment property tops out at 70% combined LTV (minimum credit 700, line cap $500,000); a second home tops out at 90% combined LTV (minimum credit 640, line cap $500,000), with the ceiling stepping down as the credit band drops (the cap holds at every tier); a primary residence tops out at 90% combined LTV (minimum credit 600), and its $750,000 maximum line is available only at 75% combined LTV or below with a 700-or-better credit profile (720 on the longer-runway program) and a full appraisal. Lines above $500,000 require a full appraisal. Credit, debt-to-income, property type, and full underwriting review all affect the final line.
Key Terms Defined
Draw period: the window when you can borrow against the line, repay, and borrow again.
Repayment period: the phase after the draw ends. The line closes to new borrowing and you pay down the balance.
Interest-only payment: a payment that covers the interest on what you borrowed and nothing toward principal.
Amortization: paying a balance down on a schedule, so each payment covers interest plus some principal.
Balloon payment: a single large payment of the full remaining balance, due on a set date.
CLTV (combined loan-to-value): all loans secured by the property, added together, divided by the property’s value.
Maturity date: the date the whole line must be paid off. It is the end of the repayment period.
Lien position: where a loan sits in line to be repaid if the property is sold. A first lien is paid first. A second lien is paid after it.
How Do the Two Phases Add Up to a Total Term?
The total term is the draw length plus the repayment length. A 10-year draw with a 20-year repayment is a 30-year line. A 5-year draw with a 25-year repayment is also a 30-year line. Same total, very different feel.
The contract fixes the two lengths separately. Some lenders use the word “term” for only one phase, which is why quotes seem to disagree. Always ask which phase the number describes.
Consumer-finance sources describe the common range consistently. NerdWallet says the draw can last as long as 10 years, followed by a repayment period of up to 20 years. Experian says a draw typically lasts five to 10 years, followed by a 20-year repayment period, and adds that some lines offer a 15- or 20-year draw.
Here is how common pairings stack up.
| Draw | Repayment | Total life | Feels like |
|---|---|---|---|
| 5 years | 25 years | 30 years | Short borrowing window, long payoff |
| 10 years | 20 years | 30 years | The common headline pattern |
| 10 years | 10 years | 20 years | Faster payoff, bigger payment step |
| 5 years | 10 years | 15 years | Short life, steepest payment step |
Treat those rows as illustrations of the arithmetic. Your agreement is the only number that counts.
What Happens During the Draw Period?
During the draw, you borrow what you need, up to the limit, and payments are typically interest-only. Payments start only once you borrow. Repay some of the balance and that credit becomes available again.
The CFPB’s HELOC explainer uses a 10-year draw as its example. It also notes that with a variable rate, payments can change even when you do not draw more. That matters, because the line can get more expensive without you touching it.
Some plans also require a minimum draw or an initial draw at setup. On Lendmire’s wholesale network, at least 75% of the line is drawn at closing. After closing, the minimum for each later draw is $1,000 on the longer-runway program, with Texas at $4,000. We cover that program below.
Here is the trap in the word “interest-only.” You pay for the use of the money and nothing toward the balance. The CFPB’s HELOC brochure says an interest-only plan means you pay nothing toward principal. Ten interest-only years leave the balance where it started.
Some plans require part of each payment to go toward principal during the draw. Even then, that portion typically does not repay the balance by the end of the draw.
What Happens When the Draw Ends?
On the switch date, the line closes to new borrowing and payments turn into principal plus interest. If the draw was interest-only, the entire principal now has to amortize over the repayment years alone. That compresses the payoff into fewer years than the total term suggests.
The CFPB says monthly payments are often significantly higher in repayment. The much larger monthly bills can be a rude awakening, and the payment can step up sharply.
How long does repayment run? The CFPB’s own documents give different answers. Its explainer says often ten or 20 years. Its brochure says often ten or 15. That gap tells you something useful: repayment length is set by contract, not by any rule. Nobody mandates a number.
Balloon or Amortizing? The Variation That Changes Everything
Most lines amortize in repayment, but some do not. Experian notes that some HELOCs have a balloon payment, meaning the entire balance is due when the draw ends. The CFPB brochure adds that you may have to refinance to cover it.
Picture two investors with the same balance and the same 10-year draw. One has an amortizing repayment phase and faces a larger, steady payment. The other has a balloon and faces one lump sum on a fixed date. The first has a cash-flow problem to plan for. The second has a refinancing problem, and refinancing depends on rent, credit, and property value at that moment.
Read the note for balloon language before you sign. It is one of the few terms that can turn a 30-year-looking product into a 10-year deadline.
Rate Behavior Across the Whole Term
Most lines float, so pricing can move month to month through both phases. The CFPB says most HELOCs carry variable rates. Some lenders offer fixed-rate options or conversion at the start of repayment, though that is a lender choice, not a standard feature.
On Lendmire’s network, pricing floats across both the draw and the repayment period and never converts to fixed. That is worth knowing up front. A floating payment during repayment can rise even before the full amortizing step lands.
What Does Lendmire’s Network Actually Offer?
On an investment property, the network’s HELOC runs a 5-year interest-only draw followed by a 25-year fully amortizing repayment. That is a 30-year line. It is the only structure available for investment lines, so there is nothing to choose between.
Primary residences and second homes get two structures:
- A 3-year interest-only draw with a 17-year repayment, which Lendmire’s network treats as the higher-leverage program.
- A 5-year interest-only draw with a 25-year repayment, which is the longer-runway program.
Tennessee shortens both, to 3 years and 12 years on the first, and 5 years and 10 years on the second.
Lendmire brokers these lines through select wholesale partners and is never the lender. Lendmire’s explainer Does a HELOC Term Cover Both Draw and Repayment Periods? is useful if you want the term math from this angle. Every figure here applies subject to lender guidelines and full file review.
Other investment-line parameters on the network:
- The ceiling is 70% CLTV on an investment property, with a 700 minimum credit score.
- The maximum line on an investment property is $500,000.
- Debt-to-income runs up to 50%, and the line is qualified on the interest-only payment calculated on the maximum draw.
- Title must sit with an individual or a revocable living trust. An LLC cannot hold title.
That last point is where a HELOC and a DSCR loan split apart. A property already deeded to an LLC needs a vesting change, or a DSCR cash-out refinance instead. A line is also underwritten on personal credit and income, not on rent. If you want the rent-driven alternative, start with the complete DSCR loans guide.
Where the General Rule Breaks
The 10-plus-20 pattern is common, not universal. Here are the named exceptions.
- Longer draws. Some lenders offer 15- or 20-year draws. These stretch access but also stretch the time the balance sits untouched.
- Shorter draws. Three-year draws exist on the network’s primary-residence and second-home lines.
- State shortening. Tennessee compresses both phases on the network’s primary and second-home structures.
- Balloon repayment. The whole balance comes due when the draw ends, not over years.
- Renewal. Older federal consumer material says that at draw end you may be allowed to renew the line. Treat that as lender-specific and ask.
- Occupancy. Investment lines come from fewer lenders than primary-home lines. Taxstra lists portfolio lenders, credit unions, and regional banks as the usual sources.
What Should an Investor Do With This?
Start with the switch date, not the credit limit. A line that looks affordable in the draw can look very different in repayment. Before drawing, stress-test the amortizing payment against current rent. Remember that rent covering a payment is not the same as positive cash flow. Repairs, vacancy, management, and utilities all sit outside that comparison.
Then build an exit plan before the switch date arrives. A short draw followed by a long repayment spreads the payoff out, but it does not remove the step-up. Your options at the end of the draw are:
1. Pay on schedule.
2. Refinance the balance.
3. Renew or replace the line, if the lender allows it.
Here is a simple milestone calendar. Twelve months before the draw ends, rerun the payment math and check your credit. Six months out, ask the lender what the notice and renewal terms say, and price a refinance. At the end, either the plan is in place or the payment step lands on you.
Compare this against a DSCR cash-out refinance, which replaces the first mortgage with a single note instead of adding a second lien. On the DSCR side, many select programs on the network start at a 1.00 coverage floor, and a separate select-lender path goes below 1.00 with leverage and terms adjusted. Either route is reviewed subject to lender guidelines.
Contract Checklist Before You Sign
Find these in the agreement, not in the marketing:
- The draw end date and the repayment length, stated separately.
- The maturity date.
- Whether repayment amortizes or ends in a balloon.
- Whether the rate floats through both phases, and whether any conversion right exists.
- Renewal or extension language.
- Any minimum draw at closing or afterward.
- Title and vesting requirements.
Common Misconceptions
“The term is one number.” It is two phases, each set by the contract.
“Interest-only means I’m paying down the loan.” It does not. Principal stays untouched.
“Repayment is 30 years like a mortgage.” Federal consumer material points to repayment of often ten to 20 years, not a mortgage-style 30.
“Every HELOC amortizes at the end.” Some require a balloon payment.
“The 10 + 20 split is universal.” It is the common pattern. The CFPB gives a 10-year draw only as an example.
Frequently Asked Questions
How long does a HELOC last in total?
Commonly 15 to 30 years, with 30 the usual headline figure. The total is the draw length plus the repayment length, and the contract sets both. On Lendmire’s network, an investment-property line runs 30 years: a 5-year draw and a 25-year repayment.
How long is the draw period?
Typically 5 to 10 years, with some lenders offering 15 or 20. Payments during the draw are usually interest-only. Network structures run 3 or 5 years on primary residences and second homes, and 5 years on investment properties.
How long is the repayment period?
Often 10 to 20 years across the market. The CFPB’s own materials cite 10 to 20 years in one place and 10 to 15 in another, which shows the length is a contract choice. On the network’s investment structure it is 25 years.
What is a balloon payment on a HELOC?
It is a single payment of the full remaining balance, due when the draw ends. Some lines are built this way, and borrowers often have to refinance to cover it. Check the note for the language before signing.
Can an LLC take out a HELOC on a rental?
Not on Lendmire’s network. LLCs, corporations, and partnerships cannot hold title on these lines, which is the sharpest structural difference from a DSCR loan. An LLC-held rental needs a vesting change or a DSCR cash-out refinance instead.
If you are considering a home equity line and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, credit profile, combined leverage, and your goals. Call 828-256-2183 or request a quote.
Draw and repayment lengths look like small print until the switch date arrives, and by then the contract has already made the decision for you.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage that arranges home equity lines of credit through wholesale lending partners in its 16 full-service states. Lines on primary residences, second homes and investment properties are each reviewed individually by the lender under the program’s occupancy, credit and combined-loan-to-value guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. NerdWallet – HELOC calculator page
2. Experian – What is a draw period on a HELOC
3. CFPB – What is a HELOC (Ask CFPB)
5. Taxstra – HELOC on rental property
This article is part of Lendmire’s HELOC & home equity loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get a HELOC Right After Closing on a Home? · HELOC Rules for a Vacation and Home Repairs on One Draw · HELOC Minimum Draw and Initial Advance Rules at Closing
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.