A HELOC is a revolving line of credit secured by the equity in your home. It works like a credit card: you have a credit limit, you draw funds as you need them, and you pay interest only on the outstanding balance.
HELOCs have two phases: a draw period (typically 10 years) where you can borrow and only pay interest, followed by a repayment period (10–20 years) where the balance amortizes. Rates are usually variable (Prime + a margin), so payments can change as rates change.
HELOCs are great for ongoing expenses (renovations done in phases, college tuition over years) where you don't know exact timing or amounts. For a one-time lump sum, a fixed-rate home equity loan is often a better fit.