HELOC Payment Too High? 6 Options to Get Relief

Quick Answer: If your HELOC payment is crushing you, you have options — from calling your lender for hardship help to refinancing to a lower payment. The worst thing you can do is nothing. Here's a step-by-step guide ranked by urgency.

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You're Not Alone

We see it every day. People who were managing their HELOC fine suddenly facing payments they can't afford.

Maybe rates rose. Maybe your draw period ended. Maybe life changed — job loss, medical bills, divorce.

Whatever brought you here, there are paths forward. Let's walk through them.

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Why HELOC Payments Spike

Understanding WHY your payment increased helps you find the right solution.

Draw Period Ended (Payment Shock)

During the draw period (typically 5-10 years), many HELOCs require only interest payments. When the draw period ends, you start paying principal too.

The math is brutal:

• $80,000 balance at 8%
• Draw period payment (interest only): ~$533/month
• Repayment period payment (15-year amortization): ~$765/month
• Increase: 44%

That's the average case. Larger balances or shorter repayment periods mean bigger jumps.

Interest Rates Rose

HELOCs have variable rates tied to prime. When the Fed raises rates, your payment goes up.

• Every 1% rate increase adds ~$83/month per $100,000 of balance
• Rates have risen significantly in recent years
• Your payment may be much higher than when you first borrowed

Large Balance Accumulated

During the draw period, it's easy to keep drawing. Interest-only payments feel manageable. Then reality hits.

Life Changed

Job loss. Divorce. Medical crisis. Disability. Sometimes it's not the HELOC — it's everything else.

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Immediate Steps (This Week)

Option 1: Call Your Lender

Yes, actually call them. This is the most underused option.

Lenders don't want you to default. Foreclosure is expensive for them. Many have hardship programs they don't advertise.

What to ask for:

• Hardship modification: Temporary payment reduction while you recover
• Interest-only extension: Extends interest-only period, lowering immediate payment
• Rate reduction: Some lenders offer this to prevent default
• Forbearance: Temporary pause or reduction (payments added to balance)

How to approach the call:

1. Call the loss mitigation or hardship department (not regular customer service)
2. Explain your situation honestly
3. Have documentation ready (pay stubs, bank statements, hardship letter)
4. Ask specifically: "What hardship programs do you offer?"
5. Get everything in writing

What to document:

• Date and time of call
• Name of representative
• What they promised
• Follow-up steps

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Option 2: Make Principal Payments If You Can

If you have any extra money — even $50-$100 — put it toward principal.

Every dollar of principal you pay:

• Reduces future interest charges
• Shortens your payoff timeline
• Makes the problem smaller

Why it helps: If you eventually refinance, lower balance = better terms.

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Short-Term Relief (30-90 Days)

Option 3: Refinance Your HELOC

Get a new HELOC to replace the old one. This can help if:

• Your credit is still decent
• You have equity in your home
• Rates have improved since you got your original HELOC

How it helps:

• New draw period means interest-only payments again
• Potentially lower rate (if your credit improved or market rates dropped)
• Fresh 10-year draw period gives you breathing room

Current average HELOC rate: ~7.44% (February 2026)

Catch: You're extending the timeline. But if the alternative is foreclosure, that's okay.

How to refinance a HELOC

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Option 4: Convert to Fixed-Rate Home Equity Loan (HELOAN)

Trade variable payments for predictable ones.

How it helps:

• Fixed rate = payment never changes
• Longer term = lower monthly payment
• No more payment shock surprises

Example:

• $80,000 HELOC at 8% variable, 15-year repayment: ~$765/month
• $80,000 HELOAN at 8.5% fixed, 20-year term: ~$695/month
• Savings: $70/month plus certainty

The trade-off: You lose HELOC flexibility (can't re-draw). But if you need stability, that's worth it.

Variable vs. fixed rate HELOC

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Longer-Term Solutions

Option 5: Cash-Out Refinance (Roll Into Mortgage)

Combine your first mortgage and HELOC into a single new mortgage.

How it helps:

• One payment instead of two
• Potentially lower blended rate
• Longer term (30 years) = much lower payment

Example:

• Current mortgage: $300,000 at 6%

• HELOC: $80,000 at 8.5%

• Total payments: ~$2,500/month

• New 30-year mortgage: $380,000 at 6.5%

• New payment: ~$2,400/month

• Plus: Simpler, single payment

When it makes sense:

• Mortgage rates are competitive with your current rate
• You plan to stay in the home long-term
• You can qualify for the new mortgage

When to avoid:

• Rates are significantly higher than your current mortgage
• Closing costs eat up the savings
• You plan to sell soon

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Option 6: Liquidate Assets Before Selling Home

If you have investments, savings, or other assets — consider using them before risking your home.

Priority order:

1. Taxable brokerage accounts (not retirement)
2. Savings above emergency fund minimum
3. Items you can sell (cars, valuables)
4. Retirement accounts (last resort — tax penalties)

Why this order: Your home should be the LAST thing at risk. An investment can be rebuilt. A foreclosure damages your credit for years.

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What NOT to Do

❌ Don't Ignore It

Every missed payment:

• Damages your credit
• Adds late fees
• Moves you closer to foreclosure
• Makes solutions harder to find

The problem doesn't get better by itself.

❌ Don't Pay With Credit Cards

Trading home-secured debt for high-interest unsecured debt makes things worse. Now you have two problems.

❌ Don't Refinance Into Predatory Terms

Desperation makes people accept bad deals. Watch out for:

• Extremely high fees
• Balloon payments
• Prepayment penalties longer than 3 years
• Rates significantly above market

A bad refinance can trap you in an even worse situation.

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When Selling Is the Right Answer

Sometimes the healthiest financial decision is letting go of the house.

This isn't failure. It's strategy.

Selling makes sense when:

• You can't afford the home even with modifications
• You have significant equity to walk away with
• Staying means years of financial stress
• The home no longer fits your life situation

Selling strategically:

• You control the timing
• You protect your credit
• You capture equity
• You start fresh

Foreclosure means:

• Lender controls timing
• Credit destroyed for years
• Potential deficiency judgment
• No fresh start

If selling is the path, do it on your terms.

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Timeline: How Much Time Do You Have?

HELOC foreclosure timelines vary by state, but generally:

• 30 days late: Late fee, credit ding
• 60 days late: Serious delinquency reported
• 90 days late: Lender may start collection actions
• 120+ days late: Foreclosure process may begin
• 6-12+ months: Actual foreclosure (varies by state)

You have time — but use it wisely. Every month of action improves your options.

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Get Help

Struggling with HELOC payments isn't something to be ashamed of. Economic conditions, health crises, and life changes happen to everyone.

HonestCasa offers free consultations to explore your options. We'll help you understand what's possible — even if the answer isn't refinancing with us.

[Talk to Someone Who Can Help →]

No pressure, no judgment — just honest advice about your situation.

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Last updated: February 2026