HELOC terms, in plain English.

A published benchmark used in a variable-rate formula. Confirm its name, source, observation date, and reset schedule.

The percentage points added to the index in the agreement’s formula. A 7% index plus a 1% margin produces 8%, before other terms.

A starting rate that applies for a limited time. Record its end date separately from the ongoing formula.

A minimum rate specified by the agreement. Falling index values may not lower a rate already at its floor.

A limit on how high the rate can go under the agreement. Read the maximum rate and any adjustment limits together.

The phase when borrowing from an open line is allowed under its terms. Payment and access requirements vary.

The later phase when the outstanding balance must be repaid under the agreed schedule or other terms.

A payment covering interest without reducing principal. A $50,000 balance remains $50,000 if no principal is paid.

A feature some HELOCs offer to move an eligible balance to fixed-rate repayment. The rest of the line may remain variable.

Repayment of previously waived costs when a stated contract condition occurs, such as closing within a specified period.

The difference between two percentages: 8% to 9% is a 1-percentage-point increase. On $50,000, that adds about $41.67 monthly interest using rate ÷ 12.

The amount the lender currently permits you to draw, subject to terms. It differs from the outstanding balance on which interest is charged.