HELOC Draw Period Ending in 2026? Your 4-Step Survival Guide

The 10-Year Wake-Up Call

Millions of HELOCs taken out during the housing recovery of 2015-2016 are hitting their 10-year anniversary in 2026. That anniversary marks the end of the "Draw Period" and the beginning of the "Repayment Period."

For a decade, you enjoyed low, interest-only payments. You could borrow money, pay it back, and borrow again. But on that expiration date, the rules change overnight:

• No More Borrowing: The credit line freezes using. You cannot access any more equity.
• Principal Payments Mandatory: You must start paying back the loan balance.
• Amortization Kicks In: Your balance is divided over the remaining term (usually 10 to 20 years).

The Anatomy of Payment Shock

Let's look at the math.
Loan Balance: $50,000
Interest Rate: 8.5%

• During Draw Period: Monthly Payment = ~$350 (Interest Only)
• During Repayment (20 Year Term): Monthly Payment = ~$433
• During Repayment (10 Year Term): Monthly Payment = ~$620

Depending on your term, your obligation could nearly double. For families on a tight budget, an extra $300/month is a crisis.

Option 1: Refinance (Kick the Can)

If you have good credit and equity, the easiest solution is to open a new HELOC to pay off the old one. This resets the clock, giving you a new 10-year draw period with interest-only payments.

Pros: Lowers monthly payment immediately.
Cons: You pay closing costs again. You are in debt for another 10 years.

Option 2: Lump Sum Payoff

If you have cash sitting in savings or investments, write a check. High-interest debt (8%+) is an emergency.

Option 3: Loan Modification

If you cannot afford the new payment and cannot refinance (due to bad credit or low home value), call your lender IMMEDIATELY. Ask for a "Loan Modification." They may extend the term to 30 years or lower the rate to prevent you from defaulting.

Option 4: Sell the Home

The nuclear option. If the payments are unsustainable and you have equity, selling the home allows you to pay off the debt and pocket the remaining cash.