A home repair project financed with a HELOC in 2025 could result in a tax deduction next spring. Natasha Lazaridi/Getty Images

A home equity line of credit (HELOC) offers homeowners a cost-effective way to finance a variety of projects or expenses. And, based on data released over the summer, there's plenty of money to utilize, with home equity levels recently hitting a cumulative record high in the country. With interest rates on HELOCs lower than what's available for borrowers with home equity loans, personal loans and credit cards, a HELOC is also one of the cheapest ways to borrow right now .

But it's not a totally risk-free product, either. A HELOC does leverage your home's equity as needed and failure to make the agreed-upon repayments could lead to foreclosure

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