I have a HELOC with my local bank. The draw period is 10 years and the term is 15 years. I still have balance that equals 95% of the line of credit. I only have about 3 years left on the draw period and 8 years on the term. I am thinking of rolling my 1st mortgage 15 years left and HELOC into one new 15 year Home Equity loan. Does this make sense?

My concern is rate increases on the HELOC. The down side is I am extending out the HELOC another 7 years.

  • 8
    There's a lot of math we can't do without numbers. No current rates, or proposed rates for the new loan. Without that, you're not likely to get much good advice. Jun 2, 2017 at 3:34
  • 1
    Interest rates on "cash out" mortgages are often higher than interest rates on mortgages taken out to buy a property and on mortgages that just refinance an existing first mortgage. The last time I checked in the United States, using proceeds from a refinance to pay off a HELOC counted as a "cash out". This can cause the effective cost of the portion of the new mortgage that replaces the HELOC to be much higher than the effective rate on the portion of the mortgage that replaces the existing first mortgage.
    – Jasper
    Jun 2, 2017 at 3:44
  • From your question it sounds like your goal is to have a mortgage for the rest of your life. If that is the case, what does it matter if the HELOC gets extended 7 years?
    – Pete B.
    Jun 2, 2017 at 11:20
  • "into one new 15 year Home Equity loan." You mean into anew first mortgage, right? Not a second mortgage that cashes out the equity you do have? How much do you owe on each loan? What are the interest rates? How much do you want to pay each month?
    – D Stanley
    Jun 8, 2017 at 14:02


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