Most HELOCs have a draw period and a repayment period, and the 5-year mark often marks the transition between them

A HELOC (home equity line of credit) does not automatically close after 5 years, but many lenders structure them so that something significant happens at that point. Typically, a HELOC has two phases: a draw period during which you can borrow money, and a repayment period during which you cannot borrow and must pay back what you owe. The draw period is often 5 to 10 years, and when it ends, the HELOC moves into repayment mode. This is not a closure — your account remains open — but your ability to draw new funds stops.

The exact timeline depends on your lender and your specific agreement. Some HELOCs have a 5-year draw period followed by a 20-year repayment period. Others have a 10-year draw period. A few lenders offer HELOCs that convert to a fixed-rate loan at the end of the draw period instead of moving to interest-only repayment. You need to check your promissory note or call your lender to know which structure you have.

Key Takeaways

  • A HELOC does not close after 5 years; instead, the draw period typically ends and the repayment period begins.
  • During the draw period, you can borrow and repay repeatedly; during the repayment period, you can only pay back what you owe.
  • Your monthly payment usually increases significantly when the draw period ends because you are no longer paying interest-only.
  • Some lenders allow you to renew or extend the draw period, but this requires a new application and credit check.
  • Read your original loan documents or contact your lender to confirm your specific draw and repayment period lengths.

What changes when the draw period ends

When your HELOC draw period ends — whether that is at 5 years, 7 years, or 10 years — you move from the draw phase to the repayment phase. During the draw period, you typically pay interest only on the balance you have borrowed. Once repayment begins, you must pay both principal and interest, and your monthly payment rises sharply. A borrower who was paying $200 a month on a $50,000 balance during the draw period might owe $400 to $500 a month during repayment.

You also lose the ability to borrow new money. If you have paid down your balance to $20,000 and the draw period ends, you cannot draw that $20,000 again. The line of credit closes to new borrowing, though the account itself remains open for repayment purposes.

The repayment period is usually 15 to 20 years, depending on your lender. During this time, you are on a fixed schedule to pay off the entire balance. If you do not pay it off by the end of the repayment period, some lenders will demand the full remaining balance in a lump sum (called a balloon payment), while others may allow you to refinance into a new loan.

Whether you can extend or renew your draw period

Some lenders allow you to request a renewal or extension of the draw period before it ends. This is not automatic — you must ask, and the lender will run a new credit check and review your home's current value and your equity. If you have maintained good payment history and your home has not lost significant value, renewal is often possible. However, the lender can also deny the request or offer less favorable terms than your original HELOC.

Renewal is not the same as opening a new HELOC. You are extending the existing line of credit, not starting fresh. The lender may adjust the interest rate, the credit limit, or the length of the new draw period. Some lenders charge a renewal fee, though many do not.

If your lender will not renew and your draw period is ending soon, you have other options: you can pay off the balance during the repayment period, refinance the HELOC into a home equity loan or a new mortgage, or open a new HELOC with a different lender. Each option has different costs and terms, so compare them before the draw period ends.

How to find out your specific draw and repayment period

Your HELOC documents spell out exactly when your draw period ends and when repayment begins. Look for your original promissory note or loan agreement — the document you signed when you opened the HELOC. It will state the length of the draw period (for example, "5 years from the date of closing") and the length of the repayment period.

If you cannot find the paperwork, log into your lender's online account portal. Most banks and credit unions display the draw period end date in the account summary or loan details section. You can also call your lender's customer service line and ask for the draw period end date. Have your account number ready.

Mark the end date on your calendar. Knowing when the transition happens gives you time to plan for the payment increase and decide whether to renew, refinance, or pay off the balance.

What happens if you cannot afford the repayment period payment

If your monthly payment jumps at the end of the draw period and you cannot afford it, contact your lender immediately. Do not wait until you miss a payment. Some lenders will work with you to refinance the HELOC into a longer-term loan, which lowers the monthly payment but extends the time you spend repaying. Others may allow you to convert the remaining balance into a fixed-rate home equity loan.

If refinancing is not an option and you are unable to pay, your lender can foreclose on your home because a HELOC is secured by your house. This is a serious consequence, so exploring refinancing or payment plans before the repayment period begins is important.

The difference between a HELOC closing and a draw period ending

A HELOC "closing" can mean two different things, and it is important not to confuse them. A draw period ending is what happens after 5, 7, or 10 years — the line of credit stops allowing new borrowing, but the account stays open and you keep making payments. A true account closure happens when you pay off the entire balance and the lender shuts down the account, or when the lender closes it due to non-payment or other breach of the agreement.

Some lenders also have a clause that allows them to freeze or close a HELOC if your home's value drops significantly, if your credit score falls below a certain threshold, or if you miss payments. This is different from the automatic transition from draw to repayment. If your lender closes your HELOC unexpectedly, they will notify you in writing and explain the reason.

Frequently Asked Questions

Do I have to pay off my HELOC when the draw period ends?

No. When the draw period ends, you move into the repayment period, during which you make monthly payments of principal and interest. You do not have to pay the entire balance at once unless your loan agreement includes a balloon payment clause. Check your promissory note to see whether a lump-sum payment is due at the end of the repayment period.

Can my lender close my HELOC before the draw period ends?

Yes, though it is uncommon. Lenders can close a HELOC if you miss payments, if your credit score drops significantly, or if your home's value falls sharply. Some lenders also have the right to freeze new borrowing during economic downturns. If this happens, the lender must notify you in writing.

What if I want to keep borrowing after the draw period ends?

You can request a renewal or extension of the draw period before it ends, but the lender is not required to grant it. Alternatively, you can open a new HELOC with a different lender, though you will need to go through a full application and credit check. A third option is to refinance your current balance into a home equity loan, which does not have a draw period but is a fixed loan amount.

Will my interest rate change when the draw period ends?

That depends on your HELOC terms. If you have a variable-rate HELOC, your interest rate may have already changed multiple times during the draw period based on market conditions. When you move to the repayment period, the rate structure stays the same — it continues to vary with the market. If you want a fixed rate, you would need to refinance into a fixed-rate home equity loan.

How much will my payment increase when the draw period ends?

The increase depends on your balance, your interest rate, and the length of your repayment period. A rough estimate: if you owe $50,000 at 7% interest and were paying interest-only ($292 per month), your payment during a 20-year repayment period would jump to around $388 per month. The exact amount requires a calculation based on your specific numbers. Your lender can provide an estimate if you ask.