8Twelve Mortgage US
Investor home equity

HELOC on an investment property.
Draw on a rental's equity, keep its mortgage.

A HELOC on an investment property is a revolving line of credit secured by a rental, which you draw on as needed while the first mortgage stays in place. Fewer lenders offer them than on a primary home, leverage is lower and pricing is higher, but for an investor with a low-rate first mortgage it can be the cheapest way to free up equity.

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Last updated: October 2026

Rentals
And second homes
Revolving
Draw, repay, draw again
40+
Lender network

Investors usually come to us after their bank has said it only does HELOCs on the home you live in. That is common, and it is not the whole market. A smaller group of lenders will put a line on a rental or a second home, each with its own rules on leverage, documentation and ownership. Our job is knowing which of them fits your property, and telling you plainly when a refinance would serve you better.

Who it's for

A fit if you're…

  • Owning a rental with a low-rate first mortgage and equity built up
  • Planning the down payment on the next property
  • Funding a value-add renovation between tenants
  • Owning a second home and wanting flexible access to its equity
  • Turned down by a bank that only offers HELOCs on primary homes

First mortgage stays

The rental's existing rate and term are not touched. Only the drawn balance accrues interest.

Draw when the deal appears

Have the line open before you find the next property, so the down payment is ready.

Second homes too

Second-home HELOCs are more widely available than investor lines and usually allow more leverage.

Alternative documentation

Some programs qualify on bank statements or the property's rent instead of tax returns.

LLC ownership on select programs

Many HELOC lenders only lend to individuals. A few will lend to the entity with a personal guarantee.

Honest comparison

If a DSCR cash-out refinance gets you more for less, we say so.

How a HELOC on an investment property works

The mechanics match an owner-occupied line. The lender values the rental, sets a maximum combined loan-to-value, subtracts the first mortgage and opens a line for the difference. During the draw period you borrow and repay as you like, often paying only interest on what you have drawn. After that, the balance converts to a principal-and-interest repayment schedule. What changes on a rental is the risk the lender sees, and that shows up as lower leverage, higher credit and reserve expectations, and higher pricing.

Illustrative example only

Round numbers, chosen to show the math rather than to reflect any particular lender or file. Your figures, program and pricing will differ.

Illustrative investment property HELOC on a $450,000 rental
Rental value$450,000
Lender combined cap (70% in this example)$315,000
Existing first mortgage$210,000
Available line$105,000
Drawn for the next down payment$80,000

The investor pays interest only on the $80,000 drawn, not the full $105,000 line. The rental's first mortgage stays exactly as it was.

For illustration only. Not a commitment to lend, a rate lock or an offer of credit. Terms vary by lender, by property and by file.

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HELOC on a second home

A second home sits between a primary residence and a rental in the lender's eyes. More lenders offer a HELOC on a second home than on an investment property, and the combined loan-to-value they allow is typically higher than for a rental. The property has to function as a second home: you use it yourself for part of the year, it is a reasonable distance from your primary residence, and it is not under a long-term lease or run mainly as a short-term rental. If you rent it out most of the year, a lender will usually treat it as an investment property, and the investor rules on this page apply.

  • More lenders and generally more leverage than an investor line
  • Must be for your own use, not primarily rented out
  • Vacation homes in condo-hotel or resort settings can narrow the field
  • Insurance, HOA and taxes on both homes count in your debt-to-income ratio
See what you qualify for

Documentation: full doc or alternative

A full-documentation investor HELOC looks at tax returns, the Schedule E for each rental, current leases and your overall debt-to-income ratio. Investors whose returns show low income after depreciation sometimes do better on an alternative route. Some programs qualify on bank statements; others look at the rental's own cash flow, the same idea behind DSCR loans. Every route still verifies credit, reserves and the property.

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When a refinance beats the line

A HELOC is the right tool when the rental's first mortgage has a rate worth keeping and you need a moderate amount, possibly in stages. It is the wrong tool when the first mortgage rate is no better than today's market, when you need more than a second lien allows, or when the property is in an LLC and no line lender will lend to it. In those cases, look at a DSCR cash-out refinance, or our overview of investment property refinance options. For a home you live in, the standard HELOC page applies.

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Things to weigh

  • Investor HELOCs are usually variable rate. Test the payment at a higher rate before you rely on it in a deal.
  • The line is secured by the rental. Vacancy or a major repair does not pause the payment.
  • Some lines can be frozen or reduced if the property's value falls. Draw what you need when you need it rather than assuming the line will always be there.
  • Lender availability is narrower than for owner-occupied HELOCs, and leverage, credit and reserve rules vary widely. Terms are available across our lender network and are never guaranteed.
  • Nothing here is an offer to lend or tax advice.
FAQ

Questions buyers actually ask

Can you get a HELOC on an investment property?+

Yes, though far fewer lenders offer one than on a primary home. Investor HELOCs usually allow less leverage, ask for stronger credit and reserves, and price higher. Placing the file with a lender that actually does them is most of the work, which is where a broker earns its keep.

Can I get a HELOC on a second home?+

Yes, and it is easier than on a rental. More lenders offer second-home HELOCs, and the leverage they allow typically sits between what they allow on a primary home and what they allow on an investment property. The home has to be a genuine second home, not a property you rent out most of the year.

How much can I borrow with a HELOC on a rental property?+

Lenders cap the combined loan-to-value, which is the first mortgage plus the line, divided by the property's value. On investment property that cap is generally lower than on a primary home. Multiply the value by the cap and subtract what you owe on the first mortgage to estimate the line.

How is income verified on an investment property HELOC?+

It depends on the program. Some lenders use full documentation: tax returns, the Schedule E and leases. Others offer alternative documentation, such as bank statements or the property's rent compared with its payment. Which route fits depends on how your income shows up on paper.

Can I get a HELOC on a property owned by an LLC?+

On select programs. Many HELOC lenders only lend to individuals, so a property held in an LLC narrows the field. Some investor programs will lend to the entity with a personal guarantee. If the line cannot be done in the LLC's name, a DSCR cash-out refinance often can.

Can I use a HELOC on one rental to buy another?+

Yes. Investors often use a line on a stabilised rental as the down payment on the next one. Remember that the new purchase loan will count the HELOC payment, and the lender may treat borrowed funds differently from savings when it checks your down payment and reserves.

Are investment property HELOC rates higher?+

Generally, yes. Lenders see more risk in a second lien on a property you do not live in, so pricing is typically higher than on an owner-occupied HELOC. We do not publish rates; your pricing depends on credit, leverage, the property and the lender.

HELOC or cash-out refinance on a rental: which is better?+

If the rental's first mortgage has a low rate, a HELOC keeps it and prices only the new money. If the first mortgage rate is no better than today's, or you need more cash than a second lien allows, a cash-out refinance on the rental, including a DSCR cash-out refinance, usually gives you more room.

Is a HELOC on a rental property tax deductible?+

Interest on money borrowed against a rental and used for the rental business may be deductible as a business expense. The rules depend on how the funds are used. Talk to a tax professional before you rely on it.

Put the rental's equity to work.

A 3-minute application. A soft-credit rate estimate. We structure and place your file with the lender that fits it.

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