How a HELOC Can Help You Stay Flexible When Interest Rates Won’t Budge

When housing inventory is low and is accompanied by higher interest rates, some homeowners may choose to stay put and invest in their current homes. A Home Equity Line of Credit (HELOC) offers a flexible way to fund improvements without taking on a new, higher-rate mortgage or jumping into today’s competitive housing market. It can also be used for debt consolidation or covering unexpected expenses, making it a smart, versatile option. 

Our HELOC includes a 7-year draw period where you can borrow as needed and make interest-only payments. This keeps monthly payments low, which can be especially helpful if you’re managing other financial obligations. 

To make borrowing even more affordable for WaterStone Bank customers, we offer a 12-month introductory interest rate. After 12 months, your rate adjusts to the prime rate and will continue to fluctuate with the market for the remainder of the loan term. 

Why Rates Matter 
Because most HELOCs—including ours—have variable interest rates, your monthly payments can rise or fall with changes to the prime rate. That’s why it’s important to understand how rate fluctuations could impact your budget, both now and in the future. 

As an example, let’s say you’re approved for a $50,000 HELOC and borrow $30,000 during the draw period. For the first 7 years, your payments are interest-only, keeping costs manageable while giving you access to funds as needed. 

When the draw period ends, you have flexible repayment options: 
1. Pay off the remaining balance;
2. Refinance into a new loan; or
3. Modify into an amortized repayment schedule, like a traditional mortgage.

A HELOC is a powerful financial tool when used strategically— offering low initial payments and adaptable repayment options. 

Talk to Peter Salamone, your WaterStone Bank Mortgage Specialist, to explore whether a HELOC is the right fit for your goals.