Banks That Offer a HELOC With a 20-Year Draw and Repayment Term

The Quick Read: A HELOC with a 20-year draw followed by a 20-year repayment is not the standard structure, since consumer guidance describes a draw of five to 10 years followed by repayment of up to 20 years. Lines placed through Lendmire’s wholesale network use a 3-year or 5-year draw, paired with a 17-year or 25-year repayment. The best structure for you depends on the occupancy, the credit profile, and how long you plan to carry the balance.

• A typical consumer HELOC pairs a draw of roughly 5 to 10 years with repayment of up to 20 years, per Experian.
• On primary residences and second homes, the network offers a 3-year draw with 17-year repayment, or a 5-year draw with 25-year repayment.
• Investment property lines run the 5-year draw with 25-year repayment only, with a 70% CLTV ceiling.
• Pricing floats during both the draw and the repayment period and never converts to fixed.
• Availability for these lines is limited to 16 states, which is narrower than the DSCR footprint.

What a 20/20 HELOC Would Actually Be

A HELOC has two phases. During the draw you borrow against the line, usually paying interest only. When the draw ends, borrowing stops and the balance amortizes over the repayment term. A 20/20 line would give you 40 years of total life.

The first thing to check in any search for banks offering this is whether the 20 refers to the draw or the repayment. Experian puts the typical draw at five to 10 years, followed by a 20-year repayment period, and says terms vary by lender. NerdWallet adds that not every lender offers a line on an investment property at all, and those that do apply strict requirements.

So a bank that advertises a long draw may not write investment-property lines. A bank that writes them may not offer the long draw.

Lendmire is a mortgage broker, not a lender. It does not name or rank banks here, because the right lender depends on the property, the credit profile, and the leverage you need. The brokerage places these lines through select wholesale partners and matches the scenario to the program.

How Underwriting Treats a Long-Term Line, Step by Step

A HELOC is underwritten on you and the property, not on the rent. That differs from a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The complete DSCR loans guide covers that side. The HELOC steps run in this order.

1. Occupancy and property type. The lender first sorts the file as primary residence, second home, or investment property. That choice sets the credit floor, the leverage ceiling, and the maximum line.

2. Credit. Across the network, the score floor is 600 for a primary residence, 640 for a second home, and 700 for an investment property. The score model is a single-bureau score keyed to the primary wage earner, and the report can be no more than 90 days old at closing.

3. Debt-to-income. The maximum is 50%. For primary-residence profiles from 600 to 679 it is 45%, and a ratio above 45% requires a 680 minimum. The lender reviews your file on the interest-only payment calculated on the maximum draw, not on what you plan to borrow. Market surveys report investment-line DTI expectations of about 40% to 50%, with 50% sometimes allowed on projected rent, per NerdWallet. The network’s figure is the 50% maximum above.

4. Combined leverage. The line is sized as property value times the maximum CLTV, minus existing liens. On an investment property, the ceiling is 70% CLTV with a 700 minimum score, and the maximum line is $500,000. On a second home, the ceiling reaches 90% CLTV only at a 720 or better credit profile, up to $500,000. A primary residence matches that 90% ceiling at 720 or better up to $500,000, and it is the only occupancy where a line can run above $500,000, capped at 75% CLTV.

5. Valuation. Lines at or below $500,000 ordinarily use an automated valuation, though a higher CLTV may require a secondary valuation. Every line above $500,000 needs a full appraisal, and a borrower may ask for one in any case.

6. Draw at closing. At least 75% of the line is drawn at closing on both structures. This is a design feature, not an option, and it changes the payment profile from day one.

The Structures That Exist

The network runs two draw structures on primary residences and second homes. An investment property gets one. In plain terms, the “3/17” structure is a 3-year interest-only draw with a 17-year fully amortizing repayment.

Tennessee shortens both: 3/12 and 5/10. Neither structure offers a 20-year draw. The longest total life in the network is 30 years.

Pricing floats across both the draw and the repayment period on both structures and never converts to fixed. The FTC says lines of this kind typically carry variable pricing, so the payment can move even before the amortization step. The step from interest-only to full principal and interest is the bigger event. Experian notes the payment can rise substantially when repayment begins.

The 5/25 shape gives a longer interest-only runway and a smaller amortizing payment than the 3/17. The 3/17 pays the balance down sooner.

Where the General Rule Breaks

Title. The line must be held by the individual borrower or an inter vivos revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title. That is the sharpest structural difference from a DSCR loan. A property already deeded to an LLC needs a vesting change first, or a DSCR cash-out instead.

Property type. Eligible types include single-family, 2-4 units, PUDs, townhomes, and condominiums, including non-warrantable ones. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not eligible. Modular factory-built homes are eligible on one of the two structures only.

Exposure. A borrower is limited to three lines. Combined exposure caps at $2,000,000 on the higher-leverage structure and $750,000 on the other. A borrower with more than 15 financed properties is not eligible.

Credit history. A bankruptcy needs 4 years of seasoning from discharge or dismissal. Foreclosure history splits by structure: one seasons a foreclosure in 7 years and a deed-in-lieu, pre-foreclosure, or short sale in 4, while the other declines the history entirely. Investment files follow the 7-and-4-year path.

Freeze risk. The line is not guaranteed for its full draw. The CFPB says a lender may stop further advances if the home’s value falls significantly. A long draw on paper is only as long as the property’s value holds.

Balloon repayment. Some market products require the full balance when the draw ends instead of amortizing. The network’s structures fully amortize, but any bank agreement you review should state which applies.

State overlays. Texas primary residences are homesteads and cap at 80% combined loan-to-value, with a 12-day waiting period. Second homes and investment properties there are eligible as non-homestead transactions. Properties listed for sale, or listed within the past 60 days, are ineligible in Indiana, North Carolina, Pennsylvania, Tennessee, Texas, and Washington.

The Investor Decision in Practice

The decision comes down to what the money is for and how long it stays out.

A HELOC leaves the existing first mortgage in place, while a cash-out refinance replaces it. That matters when the first mortgage has terms you want to keep. It also means the line sits in first or second lien position behind whatever stays.

For a thin-margin rental, the reset at the end of the draw is the risk to model. A longer total life lowers the amortizing payment but does not remove the step-up. Because pricing floats, an investor holding a line for a long hold should stress the payment at the end of the draw, not just at the start.

The strongest fits for this product are borrowers who hold title personally or in a revocable trust, carry credit at 700 or better on an investment file, and keep combined leverage at or below 70% CLTV. The weaker fits are LLC-titled portfolios, borrowers needing leverage above the investment ceiling, and anyone whose real goal is a 40-year runway.

A few notes on the investment ceiling. A 90% CLTV figure exists in the network only on primary residences and second homes at a 720 or better profile. It does not apply to rentals. Market surveys may show other figures, and those describe the broader market, not this network.

Everything here is subject to lender guidelines and full file review. This is not a commitment to lend, and lines are available only in the 16 states where Lendmire offers full-service lending.

Key Terms Defined

Draw period: The stretch when you can borrow against the line, usually paying interest only.

Repayment period: The stretch after the draw ends, when borrowing stops and the balance amortizes.

CLTV: Combined loan-to-value, which counts the line plus every other lien against the property’s value.

Interest-only payment: A payment that covers interest on the balance and does not reduce principal.

Balloon payment: A lump-sum payoff of the full balance when the draw ends, instead of amortizing.

Vesting: How the property is titled, which determines who can borrow against it.

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.

About Lendmire

As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and real estate investors in its 16 full-service states open home equity lines of credit arranged through wholesale lenders. Lendmire is never the lender; line amounts, ceilings and terms are set by the lender under its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. Experian

2. NerdWallet

3. FTC – Home equity loans and home equity lines of credit

4. The CFPB