Is it Risky to Have Both a Mortgage and a HELOC?

Having both a mortgage and a home equity line of credit (HELOC) is common, and by itself, not especially risky. In fact, most HELOC borrowers still have a primary mortgage.

The risk isn’t the presence of two loans; it’s how those debts are layered, used, and managed over time. Debt layering can be a smart liquidity strategy, while debt mismanagement is what creates problems.

In this article (Skip to...)

• When having both is low risk
• When risk increases
• How to stress test your monthly payments

When having both is usually low risk

Carrying both a mortgage and a HELOC tends to work well when a few conditions are in place:

• Strong, predictable income: Borrowers with stable earnings and healthy cash flow are better positioned to handle variable payments and temporary rate increases without financial strain.
• Conservative HELOC usage: Using a HELOC sparingly — or keeping balances low relative to the credit limit — leaves room for flexibility. Low utilization also reduces the risk of payment shock if rates rise.
• A long time horizon: HELOCs are easier to manage when borrowers aren’t relying on them for short-term survival. A long runway gives you time to adjust spending, refinance, or pay balances down if conditions change.
• Lower-cost backup capital: HELOC rates are typically lower than what you’d get with a credit card or personal loan. When used selectively, the line can serve as a cheaper fallback for large or unexpected expenses, rather than a primary source of spending money.
• Payment control and timing flexibility: During the draw period, HELOC borrowers often have discretion over how much to borrow and when to repay. That flexibility can be useful for managing uneven cash flows or timing expenses around bonuses, commissions, or irregular income.

When risk starts to increase

The same structure becomes riskier when multiple pressure points stack up:

• Variable-rate exposure: HELOC rates float, and rising rates directly affect monthly payments. Borrowers who already feel stretched by their mortgage payment have less margin for rate-driven increases.
• High utilization: Carrying a large balance — especially near the credit limit — reduces flexibility and increases the likelihood that a lender freeze or reduction would cause financial stress.
• Income volatility: Freelancers or households with uneven income face added risk if a downturn coincides with higher HELOC payments.
• Psychological risk: Because HELOCs are revolving, they can start to feel like “extra money” rather than secured debt. Treating a HELOC like a credit card — borrowing repeatedly without a clear payoff plan — is one of the fastest ways to increase risk.

How to stress-test your monthly payments

A more useful way to assess risk isn’t asking whether a lender will approve both loans, but how your payments would hold up if conditions change.

Start by running the numbers at a higher HELOC rate than today’s. Variable rates don’t rise all at once, but they do rise, and monthly payments can move faster than expected when balances are high.

Next, look at your payments under a tighter cash flow scenario. That might mean a temporary income dip, fewer bonus months, or higher fixed expenses elsewhere in your budget. The question isn’t whether you could technically make the payments, but whether they’d crowd out other priorities.

Finally, consider access risk. Lenders can freeze or reduce unused HELOC credit. If you’re relying on future borrowing to stay comfortable, that’s a sign the structure may be stretched too thin.

If higher payments and reduced flexibility are still manageable, carrying both a mortgage and a HELOC is often reasonable. If not, the risk isn’t the loan setup — it’s the absence of a financial cushion.

The bottom line

Having both a mortgage and a HELOC isn’t inherently dangerous, and for many homeowners, it’s a normal and practical setup.

Risk shows up when balances get high, rates rise, income weakens, or borrowing habits drift. When used intentionally, a HELOC can add flexibility, but if you aren’t careful, it can quickly begin to increase financial pressure.