How to Use a HELOC for Home Renovations in Arizona (2026)

With home values in Arizona skyrocketing, you're likely sitting on a significant amount of equity. A Home Equity Line of Credit (HELOC) is one of the smartest ways to tap into that equity to fund home renovations, like that kitchen remodel you've been dreaming of.

What is a HELOC?

Think of a HELOC as a credit card that's secured by your house. It gives you a revolving line of credit—you can draw funds as you need them, pay it back, and draw again. This is different from a cash-out refinance, which gives you a lump sum of cash one time.

A HELOC has two phases:

1. The 'Draw' Period (Usually 10 Years): You can withdraw funds up to your credit limit. During this time, you typically only have to pay the interest on the amount you've borrowed.
2. The 'Repayment' Period (Usually 20 Years): You can no longer draw funds. You begin paying back both the principal and interest, similar to a standard mortgage.

Why Use a HELOC for Renovations?

A HELOC is perfect for renovations because you rarely know the exact total cost upfront. Projects often have unexpected expenses.

• Flexibility: You only pull money as you need it. If your kitchen remodel is $50,000 but you pay the contractor in three phases, you only draw the money as you pay them.
• Interest-Only Payments: The initial interest-only payments during the draw period keep your monthly costs low while the renovation is in progress.
• Lower Rates: Because it's secured by your home, HELOC interest rates are almost always significantly lower than personal loans or credit cards.

HELOC vs. Cash-Out Refinance

A cash-out refinance *replaces* your entire current mortgage with a new, larger one, and you get the difference in cash. This can be a great option if you can also lower your interest rate on your primary mortgage at the same time.

However, if you have an amazing 3% interest rate from a few years ago, you probably don't want to replace it with a new mortgage at today's higher rates. In this case, a HELOC is the perfect solution. It's a *second* mortgage that sits behind your low-rate primary loan, leaving it untouched.

Want to see how much equity you can tap? Use our Home Equity Calculator or reach out to get started.