Define: Equity Line Of Credit

UK Accounting Glossary

Definition: Equity Line Of Credit



Advertisement



Full Definition of Equity Line Of Credit


Equity line of credit, also known as home equity line of credit, or HELOC, is a type of credit extension, that allows borrowing against home equity over a period of time. In other terms, equity line of credit can be looked at a deed of trust, backed by a borrower’s home. The total equity line of credit amount is determined by credit and the difference between home equity and present market value of the property. Once the equity line of credit is established, the homeowner can begin borrowing against equity using a chequebook or even a credit card. An equity line of credit usually bears a lower rate of interest than a second mortgage. Additionally, most equity line of credit loans have adjustable interest rates rather than fixed. The interest on an equity line of credit is deductible up to $100,000 and maybe deductible for any amount greater than $100,000 depending on how the proceeds are used.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/equity-line-of-credit/
Modern Language Association (MLA):
Equity Line Of Credit. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 19, 2020 https://payrollheaven.com/define/equity-line-of-credit/.
Chicago Manual of Style (CMS):
Equity Line Of Credit. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/equity-line-of-credit/ (accessed: February 19, 2020).
American Psychological Association (APA):
Equity Line Of Credit. PayrollHeaven.com. Retrieved February 19, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/equity-line-of-credit/

Definition Sources


Definitions for Equity Line Of Credit are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.