HELOC for Home Renovations & Home Improvement | nbkc

A deep dive on a convenient option for financing large home improvement projects.

What is a Home Equity Line of Credit (HELOC)?

A Home Equity Line of Credit — HELOC for short — is a loan a homeowner can take out, borrowing money against the equity they’ve built up in their home. There is money in the walls, so to speak.

A HELOC functions like a revolving line of credit, letting you borrow money again and again up to a certain amount. This type of loan has variable interest rates — and, might we add, nbkc offers a very warm and welcoming introductory rate for our HELOC.¹

Benefits of a HELOC for Home Renovations

There are plenty of options to fund your remodel or renovation depending on your budget. Let’s see. You’ve got cash, credit cards and home equity loans as potential ways to pay for your home’s makeover. So, why a HELOC for home renovations? There are a few reasons, but we’ll highlight two of the big ones.

Reason #1: Get cash when you need it, definitely.

With a home renovation, costs can be hard to wrangle all at once. They’re spread out. They’re sometimes unpredictable. A revolving line of credit makes it easy to access what you need when you need it.

Borrow what you need in the moment. Leave what you don’t with the bank.

Bonus benefit: A lump sum loan would accrue interest on the whole thing, whereas with a HELOC you can take out only what you need — ahem, that means interest payments on only what you borrow.

Reason #2: Get a lower interest rate, probably.

Remodeling and renovations can cost a pretty penny. That interest rate is a hearty chunk of a big pie. Unlike pie, the smaller the interest rate the better.

Credit cards² and personal loans, while more convenient for everyday transactions, typically have higher interest rates than a HELOC. A home equity loan, a similar product to a HELOC, has a fixed interest rate with fixed payments. Because a HELOC is secured by your home, it can often offer a lower interest rate than other ways to pay for home renovations.

Bonus benefit: the nbkc HELOC has an enticing introductory rate and a pretty darn competitive thereafter rate.¹

Types of Home Renovations a HELOC would be appropriate for

Ah, the wish list for Home Sweet Home. Every homeowner has one. What would I change in this house? How would I make it Home Sweeter Home? For some, it’s a long list. For others, it’s a longer list.

A HELOC can be used to pay for a variety of renovation projects whether they’re nice-to-have changes to aesthetics or more utilitarian necessities.

Kitchen remodel. Dream kitchens come from within. The countertops, appliances, cabinets and backsplash you’ve been drooling about become a reality with a HELOC.
Bathroom renovation. A gold-plated toilet isn’t off the table, but most people use a HELOC for fixtures, tiles and more modern amenities.
Basement Finishing. Did somebody say mother-in-law suite? Or, maybe you’re looking for a home office away from the everyday. Finish your basement with a HELOC.
Roof Replacement. Most roofs last 20 to 30 years unless hail has anything to say about it. Protect your home by staying on top (roof pun very much intended) of your roof’s condition.
HVAC System Upgrade. Swapping your HVAC for a newer model could improve energy efficiency and drive that monthly bill down long-term. HELOC for your HVAC? You bet.
Flooring Replacement. You know those stories where someone pulls up the carpet of their home to reveal gorgeous original hardwoods? Not all of us are so lucky. New floors can be covered by a HELOC.
Room Additions. Add a bedroom. Expand your living room. Create a room just for your shoes or your sports memorabilia. Look, it would be your HELOC to spend how you want.
Outdoor Improvements. A warning: using an nbkc HELOC to build a patio and investing in landscaping could result in every neighbor wanting to come over all the time. Do they sell rainproof velvet ropes?
Energy-Efficient Upgrades. Solar panels, multi-paned windows, insulation in your walls and attic space. These can all be covered by a HELOC and help you save on your monthly utilities.
Structural Repairs. When a foundation needs fixing, there isn’t any getting around it. Even if you decide to move, you’ll likely have to fix it before you sell. An nbkc HELOC might be the ticket.

Get today’s rates¹

Risks of a HELOC (and Considerations)

Like with most loans, there are risks with a HELOC. They’re to be taken seriously, but if you consider your financial state and stay on top of payments, an nbkc HELOC could be quite the savvy move.

Risk: Your home is used as collateral.

A HELOC sounds great, but how risky is it exactly? As long as you pay back the HELOC, you’re in the clear. Since you’ve put your house up as collateral, failing to repay the loan could result in foreclosure.

Consideration: Only take out what you feel confident you can repay. The repayment period won’t kick in for seven years, but consider what you could afford now.

Risk: Interest rates are variable and carry potential payment fluctuations.

Anywhere you get one, a HELOC is an adjustable rate product.¹ At nbkc, your rate is Wall Street Prime +1%. When adjustments are made to the prime rate, you will see those changes affect your next billing cycle. The long and short of it is that your monthly payments could change depending on whether the rate has changed.

Consideration: Look at the variations in rate over the past 30 years and see if that’s something you feel comfortable keeping up with.

Risk: Taking on new debt adds to your overall debt load.

When you add a HELOC into the mix, you increase your overall debt. This isn’t a red flag necessarily unless you’d be piling onto an already large pile of debt. That being said, if you do have a lot of debt floating around, you could consider using the HELOC as a way to consolidate that debt.

Consideration: Review your current debt and make an educated decision. If you’re unsure whether or not your debt can take on more, speak to a financial advisor.

How to Determine if a HELOC is Right for You

Taking out a loan this large can be daunting. Scary, even. But, by following a few simple steps, you can figure out whether a HELOC is the right move for you right now. As always, if you have any questions, don’t hesitate to reach out to one of us humans at nbkc.

Assess your financial situation.
Evaluate the money you make, the money you spend and any existing debt. Crunch some numbers to make sure you feel comfortable making new payments in addition to any you already make for your car or student loans or credit cards.
Evaluate your home's equity
Much like mortgage lenders have their nifty loan-to-value ratio calculation, we’ve got an equally nifty calculation for your potential line of credit.

As an example, let’s say you own a home valued at $500k and you still owe $300k on your mortgage.

nbkc can loan up to 85% of your home’s value.

$425,000 (85% of home’s value)
-$300,000 (mortgage balance)
$125,000 Potential line of credit from nbkc
Consult with a financial advisor
This isn’t the first time in this article we’ve mentioned chatting with a money professional. An advisor will walk you through the implications of a HELOC on your current finances and your future financial goals.

They’ll help you figure out what monthly payment would be feasible for you to pay back when the time comes.

Ready to remodel, renovate or repair?

Let’s get things moving. The nbkc HELOC offers a warm introductory rate¹ and an even warmer human being guiding you throughout the process.

Get today’s rates¹

¹Annual Percentage Rate. Offer is not available in the state of Texas or in Puerto Rico, Guam, US Virgin Islands, American Samoa, or Commonwealth of the Northern Mariana Islands. Loan approval and loan amount is subject to underwriting, credit qualifications and bank-determined property value through a desktop appraisal. Property ownership and property type restrictions may apply. nbkc bank does not offer HELOCs for second residences. Rates and offer may change or be discontinued at any time and without notice. Rates are based on the Prime Rate published in the Wall Street Journal plus margin but will never exceed 18% APR. Rates as of 04/25/2025. Consult a tax advisor regarding the deductibility of interest. nbkc bank customers are eligible for bank-paid third-party fees up to $1,000. Borrowers must pay all third-party fees exceeding $1,000 at closing. If a HELOC is modified or refinanced, the borrower does not qualify for bank-paid fees or the introductory rate. The introductory rate is given once per the life of loan on a residence. Minimum loan amount of $25,000.

²Federal Reserve as reported by Forbes , as of March 2025