What happens if you can’t pay your HELOC? Experts explain

American homeowners are sitting on near-record home equity levels in 2025, with the average owner having over $200,000 in tappable equity currently — and about $313,000 in total home equity. This wealth surge has prompted many to open home equity lines of credit (HELOCs) to fund renovations, consolidate debt or cover major expenses at lower interest rates than alternative borrowing options.

While HELOCs offer flexible access to funds, today’s economic climate can make it difficult to keep up with monthly payments on any type of debt. Still, missing payments on these lines of credit, which are secured by your home, carries serious consequences, so it’s important to understand what can happen before opening one. 

To help you better grasp what could happen if you miss your HELOC payments, we spoke with lending professionals about the possible repercussions — and how to protect your finances and home before it’s too late.

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What happens if you can’t pay your HELOC? Experts explain

Here are a few things that can happen when you fall behind on HELOC payments:

Late fees and penalties

“[Your lender will] assess late fees if a HELOC payment is late,” explains Debbie Calixto, sales manager at mortgage lender loanDepot. 

These range from $25 to $50, depending on your lender, according to Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad.

The penalties don’t stop with a single fee, though. “[They] stack up fast if you keep missing payments, making it harder to catch up,” Glick warns. 

Most lenders allow a grace period of five to 15 days after the due date before applying these charges. But you’ll also receive notices urging you to pay immediately.

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Damaged credit score

“Payments that are 30 days or more past due will result in negative credit reporting, which can lower your credit score and impact your ability to secure future financing,” cautions Calixto. 

The impact can be severe. Glick notes that one missed HELOC payment can drop your FICO score by 50 to 100 points or more.

The situation worsens if you’re 60 to 90 days late, as this is when lenders might flag your account as “delinquent,” according to Glick. During this time, the lender often takes further action, including freezing your credit line access and increasing communication through calls and formal notices.

Default risk

“Repeated late payments of 30 days or more may lead to default,” Calixto warns. 

At this stage, “[your lender] can demand the full balance immediately,” Glick says. This sudden requirement to repay the entire loan balance, rather than just making up missed payments, creates a financial crisis for many homeowners.

Foreclosure risk

Foreclosure is the most serious consequence of HELOC default. The exact process and timeline vary from state to state. But generally, if your payment is more than 120 days late and you ignore notices from the lender, they’ll warn you about losing your home.

Next, they’ll file a notice of foreclosure. 

As the borrower, “[you get] a small period to redeem the loan,” explains Dean Rathbun, executive vice president at United American Mortgage Corporation. “If [you don’t] redeem the loan, the lender will have the right to foreclose.”

Cross-collateralization complications

“If your HELOC is with the same lender as your primary mortgage or tied to loans through cross-collateralization, missing HELOC payments can put your other financial agreements at risk,” warns Glick. He describes this relationship as “a web of obligations” where your home is collateral for several loans.

The implications can be far-reaching. For example, falling behind on HELOC payments might cause your lender to flag your mortgage account even if you’re current on those payments. According to Glick, “they could restrict modification options for your primary mortgage, or, in rare cases, declare a default on both loans since they’re tied to the same collateral.”

What to do if you’re having trouble with HELOC payments

The experts we interviewed recommend taking these steps if HELOC payments become unmanageable:

• Contact your lender right away: “They may be able to defer payments or work with you to modify payments if you’ve come into a time of struggle. [So] don’t hide and ignore your debt,” Rathbun says.
• Request forbearance: “If you’re facing a short-term issue (e.g., job loss), request a three to six-month pause,” recommends Glick. “[This] buys you time to stabilize without immediate credit damage.” Interest may still accrue, however.
• Explore payment plans: Glick encourages asking your lender if it’s possible to spread out missed payments or switch to interest-only payments.

The bottom line

HELOC rates remain lower than other borrowing options, typically several percentage points below credit cards or personal loans. This advantage comes from being secured by your home, but that same security means the stakes are higher if you miss payments.

“If you’re having trouble making a HELOC payment, start by taking a close look at your budget,” advises Calixto. “Cut back on spending wherever you can to free up money for your payment.” She recommends prioritizing essential payments and getting help from your HELOC lender. The sooner you reach out, the more options you may have.