HELOC Types: Variable vs Fixed and How to Choose Yours

Choosing the HELOC Structure for Your Needs: Tips on Selecting the Right HELOC Structure

If you’re exploring ways to fund home renovations, consolidate debt, or cover big payments like education expenses, a Home Equity Line of Credit (HELOC) can give you the flexibility and financial control you’re looking for. But not all HELOCs are the same. Understanding the structure and matching it to your needs will help you make the right choice.

Let’s walk through the basics of HELOC structures, how they work, and what you can do with them.

What Is a HELOC and How Does It Work?

A HELOC is a revolving line of credit that uses your home’s equity as collateral. Unlike a traditional loan with a fixed lump sum, a HELOC lets you borrow as needed, up to a set limit, during a draw period (often 5–10 years).

During the draw period, you can:

• Borrow funds multiple times as long as you stay within your limit
• Make interest-only payments on what you borrow

When the draw period ends, the repayment period begins (typically 10–20 years) where you pay down both principal and interest.

Types of HELOCs

1. Variable-Rate HELOC

Most HELOCs start with a variable interest rate, meaning your payments can change based on market conditions. This option often begins with a lower introductory rate, making it attractive for short-term borrowing.

2. Fixed-Rate HELOC Options

If you prefer predictability, some lenders, such as WesBanco, offer the ability to convert your variable-rate balance (or a portion of it) to a fixed-rate. This helps you lock in a steady monthly payment, which is especially helpful when interest rates are rising.

Variable vs. Fixed HELOC: Which Is Right for You?

Variable Rate: Ideal if you expect to pay off your balance quickly or take advantage of low initial rates.

Fixed-Rate: Best if you want consistent payments and plan to carry the balance for several years.

Many homeowners choose a hybrid approach, keeping part of their balance variable while locking in fixed-rates on larger expenses, which is something we make simple with our flexible HELOC options.

What Can You Do with a HELOC?

One of the biggest advantages of taking out a HELOC is the versatility it allows. You can use it for:

• Home improvements or renovations: If you’re a homeowner, add value to your space with upgrades.
• Fund a down payment: You can draw funds as needed, up to a specific limit, to cover the down payment and any associated fees.
• Debt consolidation: You can combine higher-interest debts into one manageable payment.
• Education or life milestones: You can use a HELOC to cover education expenses, weddings, or major family costs.
• And more…

Why Choose WesBanco for Your HELOC?

WesBanco combines experience and flexibility with tools designed for your lifestyle. We offer multiple HELOC options to match your goals, a fixed-rate conversion feature for stability, and online and mobile banking—which allows you access to your line of credit by transferring funds to your checking account.

Plus, our team provides personalized guidance, so you never feel like you’re making these big decisions alone. Ready to choose the right HELOC for your next big move? Explore WesBanco’s HELOC solutions today.

Content is for informational purposes only and is not intended to provide legal or financial advice. The views and opinions expressed do not necessarily represent the views and opinions of WesBanco.

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