HELOCs for Seniors: Should You Tap Into Home Equity for Retirement?

If you’re retiring with a paid-off or nearly paid-off home, you could be sitting on a decent pile of equity. Equity is the difference between your home’s value and the amount owed on the mortgage. Collectively, seniors 62 and older possess an estimated $14 trillion in home equity.

A home equity line of credit (HELOC) could help you unlock that equity and get cash for debt consolidation, home improvements, medical bills, or other expenses. We’ll share insight on the best HELOCs for seniors and how to decide if tapping your home equity in retirement is the right move.

Table of Contents

1. Best HELOCs for seniors
   1. Figure
   2. Aven
   3. FourLeaf
   4. Connexus
2. Should seniors get a HELOC for retirement?
   1. Home equity line of credit calculator
3. HELOC eligibility requirements for retirees
4. HELOC alternatives for seniors
5. HELOC example
6. Consider where a HELOC fits in your retirement plans
7. FAQ

Best HELOCs for seniors

Choosing the right lender matters if you plan to get a home equity line of credit in retirement. Here are our top recommendations if you’re looking for HELOCs for seniors.

Figure

Best Overall

4.9 _/5

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Why we picked it

Figure offers generous HELOC limits with a streamlined application, approval, and funding process. No in-person appraisal is required and once approved, you can access your line of credit in as little as five days. Figure is one of the best HELOCs for seniors who prefer convenience and the reassurance of a fixed interest rate.

• Fixed interest rates
• No in-person appraisal required
• Option to redraw up to 100% of funds

• 100% of funds are drawn at origination
• Origination fee of up to 4.99%
• Must request a quote to compare rates

Rates	6.70% – 14.65%
Funding amount	$15,000 – $400,000
Repayment terms	5, 10, 15, or 30 years
Min. credit score	640

Aven

Best Customer Reviews

4.8 _/5

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Why we picked it

Aven puts a different spin on HELOC lending, with a start-to-finish digital application, approval, and appraisal process. There are no appraisal fees, but borrowers should be aware of the first draw fee, which is the equivalent of an origination fee.

While Aven states the minimum credit score as 640, retirees with a credit score of 720 or higher may find it easier to get approved. Joint applications are accepted.

• Lowest rate guarantee
• 100% digital application process, with approval in as little as 15 minutes
• Funding is delivered in as little as 3 days

• Short draw period
• Origination fee of 4.90%
• Availability is limited to 35 states

Rates	6.99% – 15.49%
Funding amount	$5,000 – $400,000
Repayment terms	5, 10, 15, or 30 years
Min. credit score	640, but 720+ recommended

FourLeaf

Best for Large HELOCs

4.7 _/5

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Why we picked it

FourLeaf, formerly Bethpage Credit Union, offers retirees an introductory fixed rate, followed by a variable rate. There are no application fees, origination fees, or appraisal fees, and borrowers enjoy low, interest-only payments during the draw period. A FourLeaf HELOC could be a good fit for retirees who want to minimize their cost to borrow and avoid added fees.

• Zero application, appraisal, or origination fees
• Borrow up to $1 million for home improvements, debt consolidation, or other expenses with no closing costs
• Low, fixed introductory rate offers predictable payments for the first 12 months

• Variable-rate HELOCs can become more expensive as rates adjust
• Requirements must be met to qualify for the introductory fixed rate
• Closing costs covered by FourLeaf must be repaid if your HELOC is closed within 36 months

Rates	12-month introductory rate starting at 6.49% for VantageScores of 720 and up, with variable post-introductory rates starting at 7.50%
Funding amount	$10,000 – $1 million
Repayment terms	20 years
Min. credit score	670

Connexus

Low Intro Rate

3.5 _/5

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Why we picked it

Connexus Credit Union may appeal to cost-conscious retirees who are looking for a low, introductory rate on a HELOC. The maximum repayment term is 15 years, which can also help to curb your total interest costs. Eligible borrowers may be able to get approved without a home appraisal, and while closing costs apply, they’re capped at $2,000.

• Low minimum borrowing threshold of $5,000
• Low, introductory rates
• Eligible borrowers don’t need a home appraisal to qualify

• Closing costs apply
• No autopay discount
• Not available in Hawaii, Alaska, Maryland, or Texas

Rates	5.99% intro rate until April 1, 2026, then 6.49% intro rate until October 1, 2026; standard rates starting at 8.17%
Funding amount	$5,000 – $200,000
Repayment terms	15 years
Min. credit score	640

Should seniors get a HELOC for retirement?

HELOCs can put cash in your hands but there are some things to consider before you borrow. Here’s what to keep in mind as you weigh the benefits of a HELOC.

• Payments. Your retirement budget may look very different than the budget you stuck to during your working years. Using a HELOC calculator can help you estimate your payments to gauge their affordability.
• Rates. HELOCS may offer lower rates than personal loans or credit cards, but it’s important to check how rates are trending. If a rate cut is expected, you may save money by waiting a little longer to apply.
• Collateral. You might have plenty of uses for a HELOC, but remember that your home secures your line of credit. If you’re unable to repay a HELOC for any reason, you risk losing your home to foreclosure.

Home equity line of credit calculator

I generally don’t recommend HELOCs to senior or retirees due to the challenges of managing variable payments on a fixed income—unless you have sufficient and reliable cash flow, such as Social Security and pension income, to support the payments. However, if you wish to remain in their home and age in place by making necessary modifications or improvements, I may recommend either a HELOC or a home equity loan, depending on the specific loan terms and the current interest rate environment.

HELOC eligibility requirements for retirees

Can a retiree get a home equity line of credit, especially if they’re no longer working? It’s possible, though you’ll need to put your best foot forward with lenders.

Approval for a HELOC usually hinges on several factors, including:

• Credit scores
• Income
• Debt-to-income (DTI) ratio
• Home equity

Paying down credit cards or other debts and improving your credit scores can give you an advantage. Social Security benefits, pension payments, or an annuity, meanwhile, can demonstrate that you have steady income to repay a HELOC.

HELOC alternatives for seniors

If you’re wondering how else you can borrow in retirement, you have options. Here are some alternatives, with a look at how they compare to a HELOC.

• Home equity loan. A HELOC gives you access to a revolving credit line, while a home equity loan allows you to borrow a lump sum at fixed interest rates. You might lean toward a home equity loan if you know how much you need and want predictable payments.
• Reverse mortgage. Reverse mortgages are designed for seniors 62 and older who own their homes or have paid off most of the mortgage. A reverse mortgage doesn’t require monthly payments as long as you live in the home. It’s paid off when you (or your estate) sells the property.
• Personal loan. Personal loans are unsecured and are not tied to your home. Loan limits may be less than what you could get with a HELOC but there may be fewer hoops to jump through for approval.
• Credit cards. Credit cards allow for flexible spending and repayment, though interest rates may be higher than a HELOC.
• Cash-out refinance. If you still have a mortgage on your home, you could refinance it into a new loan and get your equity in cash at closing.

HELOC example

Here’s an example of how a HELOC might work in retirement.

Say you borrow $100,000 at 6.49%. You have a 5-year draw period in which you’re required to make interest-only payments, followed by a 15-year repayment term. You’re 65 years old and you receive $3,000 from Social Security and $1,500 from a pension.

Here’s what you’ll pay:

• $540.83/month in the draw period
• $870.56/month in the repayment period

Look at your budget to see how easily those payments might fit in. Also, consider your long-term plans.

Nothing is barring you from getting a HELOC now and selling your home later. If your home’s value declines for any reason, however, you could be walking away with less from the sale if you still have a sizable HELOC balance to repay.

Before I recommend a HELOC to a senior, we carefully review their budget and monthly cash flow to ensure they have the reliable income needed to manage HELOC payments comfortably. We discuss the specific purpose for accessing the home equity—such as home modifications for aging in place or unexpected expenses—and develop a clear repayment plan.

We evaluate the current housing market to  avoid borrowing more than necessary. We also consider the prevailing interest rate environment and broader economic outlook, as well as how tapping into home equity may impact the client’s long-term financial security, including planning for a surviving spouse and aligning with their overall estate goals.  

Consider where a HELOC fits in your retirement plans

A HELOC can help you move forward with your goals or just cover day-to-day living expenses in retirement. Taking time to compare the best HELOC rates and lenders can help you decide if you should use your equity, and where to get a line of credit.

FAQ

Can I get a HELOC on Social Security?

Yes, it’s possible to qualify for a HELOC using Social Security income, as long as that income is sufficient to meet the lender’s debt-to-income (DTI) and ability-to-repay guidelines. Most lenders accept Social Security benefits as income and may request your SSA award letter or bank statements as proof.

If Social Security alone isn’t enough, some lenders may consider total retirement income (pensions, 401(k) withdrawals, annuities, etc.) or your assets as part of the approval process.

What is the monthly payment on a $50,000 HELOC?

The monthly payment on a $50,000 HELOC depends on the interest rate, repayment structure, and how much you borrow. Here’s a breakdown:

• Interest-only during draw period (common with HELOCs): If the interest rate is 9%, and you borrow the full $50,000, your monthly payment during the draw period would be around $375/month.
• Amortizing repayment (interest + principal): For a 10-year repayment period at 9%, the monthly payment would be around $634/month.

However, many borrowers don’t draw the full amount at once, so your actual payments could be lower.

Is a HELOC a second mortgage?

Yes, a HELOC is a type of second mortgage, but not all second mortgages are HELOCs.

A second mortgage is any loan that uses your home as collateral when you already have a primary mortgage. HELOCs fall into this category because they are secured by your home and typically come behind your first mortgage in lien priority. That means if you default, your original mortgage gets paid off first in a foreclosure.

Some homeowners may also open a HELOC as a first-lien position if they don’t have an existing mortgage—though this is less common.

How we chose the best HELOCs for seniors

Since 2018, LendEDU has evaluated home equity companies to help readers find the best home equity loans and HELOCs. Our latest analysis reviewed 850 data points from 34 lenders and financial institutions, with 25 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.