Took $82K HELOC for Kitchen Renovation—Ended Up Using Only $64K and Here's Why That Matters

I got approved for an $82,000 HELOC to fund our kitchen renovation. The contractor quoted $75,000 for the full project, and I wanted a buffer for unexpected costs that always seem to appear.

Six months into the renovation, I’d only drawn $64,000 from the credit line. The project cost less than quoted, I found cheaper material alternatives, and I postponed some non-essential upgrades.

That $18,000 difference between approved credit line and actual usage saved me $3,240 in interest in the first year alone—and it’s the perfect example of why HELOC flexibility matters more than just rate comparisons.

If I’d taken a fixed home equity loan for $82,000, I would have been paying interest on the full amount from day one, regardless of whether I needed it all. With the HELOC, I paid interest only on what I actually used.

Here’s how the renovation unfolded, why I drew less than planned, how the HELOC’s pay-as-you-draw structure saved money, and when this flexibility is worth choosing HELOC over potentially lower fixed-rate alternatives.

The Renovation Plan (And My Financing Decision)

Original kitchen renovation scope:

• Cabinet replacement and refinishing: $28,000
• Countertops (quartz): $12,000
• Appliance package (high-end): $18,000
• Flooring (luxury vinyl plank throughout kitchen and dining): $8,500
• Electrical and plumbing updates: $6,500
• Labor and installation: $12,000
• Contractor quote total: $75,000
• Buffer for overruns: $7,000
• Target HELOC amount: $82,000

I got quotes from two lenders for home equity financing:

Home equity loan option:

• Loan amount: $82,000 (must take full amount at closing)
• Rate: 8.75% fixed
• Term: 15 years
• Monthly payment: $807 (P&I)
• Closing costs: $1,400

HELOC option (what I chose):

• Credit line approved: $82,000 maximum
• Rate: Prime + 1.00% (9.25% at the time)
• Draw period: 10 years
• Repayment period: 20 years after draw
• Closing costs: $650

The HELOC rate was 0.50 percentage points higher than the home equity loan. But the flexibility to draw only what I actually needed—paying interest only on drawn amounts—made it the better choice for a renovation project with uncertain final costs.

What Actually Happened During Renovation

Month 1: Initial Draw ($22,000)

Payments to:

• Cabinet deposit: $14,000 (50% upfront)
• Appliance deposit: $6,000 (paid early for 10% discount)
• Demolition and prep contractor: $2,000

I drew exactly what I needed for month one. Balance: $22,000. Monthly interest at 9.25%: $170.

If I’d taken the home equity loan, I’d have $82,000 sitting in my account earning maybe 1% in savings ($68/month) while paying interest on $82,000 at 8.75% ($598/month)—net interest cost $530/month even though I only needed $22K immediately.

Month 2: Cabinets and Countertops ($26,000)

Payments to:

• Cabinet final payment: $14,000
• Countertops: $12,000 (found slightly cheaper fabricator than original quote, saved $1,200)

Total drawn so far: $48,000. Monthly interest: $370.

I was already $1,200 under budget on countertops. This was the first indication that I might not need the full $82K.

Month 3: Flooring and Materials ($9,500)

Payments to:

• Flooring materials and installation: $7,200 (saved $1,300 by choosing different LVP brand with same quality)
• Miscellaneous materials and fixtures: $2,300

Total drawn: $57,500. Monthly interest: $443.

Now I was $2,500 under budget ($1,200 on countertops + $1,300 on flooring). The renovation was progressing smoothly, and it looked like I’d come in under the $75K quote.

Month 4: Electrical, Plumbing, Final Appliances ($6,500)

Payments to:

• Electrical upgrades: $3,800 (less than $6,500 quoted—electrical was simpler than anticipated)
• Plumbing updates: $1,200 (only minor updates needed, saved $1,500)
• Final appliance payments: $1,500

Total drawn: $64,000. Monthly interest: $493.

At this point, the renovation was essentially complete. The kitchen was functional, beautiful, and we’d spent $11,000 less than the original $75K contractor quote.

Decision Point: Draw the Remaining $18K or Leave It Available?

I had $18,000 remaining available on the HELOC ($82K approved - $64K drawn).

Original plan included:

• Wine refrigerator and butler’s pantry buildout: $8,000
• Under-cabinet lighting upgrade: $2,500
• Backsplash tile extension into dining area: $3,500
• Upgraded cabinet hardware: $1,200
• Contingency: $2,800

These were “nice to have” items, not essentials. The kitchen was fully functional without them.

I decided: Don’t draw the additional funds. Leave the credit line available for future needs, but don’t pay interest on money I wasn’t currently using.

The Cost Comparison (HELOC vs Home Equity Loan)

First year interest costs:

HELOC (actual usage):

• Balance: $64,000
• Rate: 9.25% average over year
• Interest paid year one: $5,920
• Unused credit line: $18,000 (zero interest charged)

Home equity loan (if I’d taken fixed loan):

• Balance: $82,000 (full amount disbursed at closing)
• Rate: 8.75%
• Interest paid year one: $7,175
• Unused funds: $18,000 sitting in savings earning ~$180 interest
• Net interest cost: $6,995

First year savings from HELOC: $1,075 ($6,995 - $5,920)

But that’s not the full picture. The real difference shows up over multiple years.

Five-year comparison (assuming I never use the extra $18K):

HELOC at $64K balance:

• If I pay interest-only: $29,600 total interest (5 years × $5,920)
• If I pay $1,200/month ($493 interest + $707 principal): $16,800 total interest, balance paid down to $21,600

Home equity loan at $82K balance:

• Required payment: $807/month P&I
• Total paid over 5 years: $48,420
• Principal reduction: $13,335
• Interest paid: $35,085
• Remaining balance: $68,665

Even though the home equity loan had a lower rate (8.75% vs 9.25%), the HELOC saved substantially because I only paid interest on the $64K I actually used, not the full $82K.

Five-year savings: $18,285 ($35,085 - $16,800) if I match payment efforts.

When I Eventually Used Some of the Available Credit

Eighteen months after the kitchen renovation, we decided to tackle the butler’s pantry buildout and under-cabinet lighting ($10,500 of the originally planned items).

HELOC advantage:

I simply drew another $10,500 from the available credit line. No new application, no closing costs, no waiting for approval. The funds were available within 24 hours via check or transfer.

My new balance: $74,500 (I’d paid down to $58,000, then drew $10,500 more, but also paid down another $6,000 in the meantime).

If I’d taken the home equity loan, I would have either:

1. Already been paying interest on these funds for 18 months while not using them, OR
2. Needed to apply for a new loan or credit card to finance these additional projects

The HELOC’s revolving credit structure let me access funds when I actually needed them, not when I had to commit to them.

The Hidden Value of HELOC Flexibility for Renovations

Beyond just the interest savings, the HELOC flexibility provided value in ways I didn’t fully anticipate:

1. Negotiating Power with Contractors

Because I had cash available through HELOC (not already committed to a fixed loan payment), I could negotiate for early payment discounts.

I paid the appliance dealer 100% upfront (instead of 50% deposit) in exchange for 10% discount—saved $1,800 on the appliance package.

With a home equity loan, I’d have the cash, but I’d already be committed to paying interest on it. With HELOC, I could draw exactly when the discount opportunity arose.

2. Avoiding Interest on Delayed Projects

Some original scope items got delayed not because of budget, but because of timing and priorities:

• Butler’s pantry: Delayed 18 months (eventually completed)
• Backsplash extension: Delayed indefinitely (still might do it, haven’t decided)
• Wine refrigerator: Decided against it (realized we wouldn’t use it enough)

By not drawing funds for these items until we actually did them, I avoided 18+ months of interest on money I wasn’t using.

3. Emergency Fund Backup

Six months after the renovation, we had unexpected medical expenses ($4,200) that exceeded our emergency fund.

Instead of using credit cards at 18-22% APR, I drew $5,000 from the remaining HELOC availability at 9.25%, paid the medical bills, and paid back the HELOC within three months.

The available credit line served as emergency backup—something a fully-drawn home equity loan couldn’t provide.

4. Ability to Optimize Material Purchases

During the renovation, I found opportunities to save by:

• Shopping sales (waited two weeks for flooring sale, saved $400)
• Comparing multiple suppliers (found cabinets $800 cheaper than contractor’s supplier)
• Buying materials myself versus through contractor markup

Because I wasn’t locked into a fixed timeline or budget (already drawn funds burning a hole in my pocket), I could optimize purchases for value rather than rushing to use committed loan funds.

When Fixed Home Equity Loan Makes More Sense

HELOC flexibility was perfect for my renovation. But there are situations where a fixed home equity loan is better:

Choose fixed home equity loan when:

• You know exact amount needed upfront (no variability)
• You want fixed payments and rate predictability
• You prefer forced amortization (disciplined payoff schedule)
• Fixed loan rate is significantly lower than HELOC rate (2%+ difference)
• You won’t benefit from revolving credit structure

Choose HELOC when:

• Project costs are uncertain (renovations, phased projects)
• You want to draw funds over time as needed
• You value revolving credit flexibility (pay down, draw again)
• You might not use full approved amount
• You want available credit as emergency backup

For my kitchen renovation with uncertain final costs, multiple payment phases, and potential scope changes, HELOC was clearly better despite slightly higher rate.

What I’d Tell Someone Planning a Renovation

If you’re financing a home renovation, don’t just compare interest rates. Compare the financing structure to your actual usage pattern.

Key questions:

1. Do you know the exact final cost, or is there uncertainty? (Uncertainty → HELOC)
2. Will payments be lump sum or spread over several months? (Spread out → HELOC)
3. Do you want the option to cancel or delay parts of the project? (Yes → HELOC)
4. Will you use the full approved amount immediately? (No → HELOC)
5. Do you value having available credit after the project? (Yes → HELOC)

For me, the answer to all five questions pointed to HELOC being the right choice.

I approved for $82K, used $64K initially, paid interest only on what I used, saved $18,285 over five years compared to a fixed loan, and maintained available credit for future needs.

That flexibility was worth the 0.50 percent higher rate—and it’s why comparing HELOC versus home equity loans isn’t just about rates, it’s about matching financing structure to your actual project needs and usage patterns.

If I were financing a renovation again, I’d choose HELOC without hesitation—the pay-as-you-draw structure aligns perfectly with how renovation costs actually occur over time, and the savings from only paying interest on used amounts adds up substantially over time.