Loan guide
HELOCs in Michigan
With Michigan home values up sharply since 2020, a home equity line of credit lets owners tap that equity without disturbing a low first-mortgage rate — but its variable rate is the catch buyers underestimate.
- Type
- Revolving credit line, variable rate
- Draw period
- Often 10 years, interest-only
- Best MI source
- Credit unions
- Best for
- Flexible access, keeping a low first mortgage
How helocs work
A HELOC is a revolving line of credit secured by your home's equity — think of it as a credit card backed by your house.
Draw period vs repayment period
- Draw period: often 10 years — borrow, repay, and re-borrow up to your limit, usually paying interest only
- Repayment period: the balance amortizes, which can raise the payment sharply
That's the key difference from a fixed home equity loan: a HELOC offers flexibility and interest-only access, while a home equity loan gives you a lump sum at a fixed rate. Many Michigan borrowers use a HELOC precisely because it leaves a sub-4% first mortgage untouched.
What's different in Michigan
Michigan credit unions — Lake Michigan Credit Union, DFCU Financial, and others — routinely post the most competitive HELOC intro offers in the state, often beating national lenders on both rate and closing costs. Membership is usually a small, one-time requirement.
See the draw-vs-repayment jump in the HELOC payment calculator.
Requirements at a glance
- Sufficient home equity (often 15–20% retained)
- 620+ credit score for most lenders
- Manageable combined loan-to-value (first + HELOC)
- Documented income to support the payment
This guide is general information, not a lending decision. Loan limits and program rules change — verify current figures with a licensed Michigan lender and confirm licensing at NMLS Consumer Access. See all Michigan loan types or compare lenders.