Can I pull out cash from a HELOC?

Yes, you can pull out cash from a HELOC, which is one of its main purposes and advantages as a revolving credit line secured by your home equity. A HELOC or home equity line of credit works like a large credit card with your house as collateral: your lender approves a maximum limit based on up to 65 to 80 percent of your home's value minus your mortgage balance, and you can draw cash as needed up to that limit during the draw period, typically 5 to 10 years. You can pull cash out by writing a check from your HELOC account, transferring money online to your checking account, using a debit card linked to the HELOC if your lender offers one, or visiting a branch to request a draft. You only pay interest on the amount you actually draw, not the full limit, and interest is usually variable at prime plus a margin. You can use the cash for renovations, debt consolidation, education, or emergencies. As you repay, your available credit replenishes. Keep in mind that pulling cash reduces your home equity, your home is at risk if you cannot repay, and interest may be higher than a mortgage. In Canada, HELOC interest is not tax deductible unless used for investment purposes.