Should You Use a HELOC to Buy Bitcoin? Break-Even Calculator
A home equity line of credit (HELOC) is one of the lowest-cost sources of leverage available to homeowners. With rates typically ranging from prime + 0% to prime + 2%, a HELOC can provide a large pool of capital at rates significantly below unsecured alternatives. The question is whether Bitcoin's expected compound annual growth rate (CAGR) is high enough to outpace the interest cost — and whether you can stomach the risk of using your home as collateral.
This page walks through the mechanics of using a HELOC to accumulate Bitcoin, provides break-even CAGR tables for common loan amounts, and identifies the key risks. For a personalized analysis based on your complete financial picture, use the SaylorScope calculator.
How a HELOC Works for Bitcoin Purchase
A HELOC is a revolving line of credit secured by the equity in your home. Unlike a lump-sum home equity loan, a HELOC lets you draw funds as needed during a draw period (typically 5-10 years), then repay during a repayment period (10-20 years). During the draw period, many HELOCs require only interest payments, which keeps monthly costs lower.
For a Bitcoin accumulation strategy, a HELOC has several structural advantages. You can dollar-cost average into Bitcoin by drawing funds incrementally rather than deploying a single lump sum. This reduces timing risk. The interest-only draw period also means your monthly payment stays manageable while Bitcoin (ideally) appreciates.
The key variable is the rate. HELOC rates are tied to the prime rate, which tracks the federal funds rate. If the Federal Reserve raises rates, your HELOC cost increases — and so does the CAGR Bitcoin needs to achieve for the strategy to break even. This rate volatility is the primary trade-off compared to a fixed-rate cash-out refinance.
Break-Even CAGR Table: HELOC at Variable Rates
The table below shows the minimum Bitcoin CAGR required to break even after interest costs at different HELOC rates. The CAGR requirement is independent of loan amount — whether you draw $50,000 or $200,000, you need the same percentage return to cover interest.
| HELOC Rate | BTC CAGR Needed (5yr Break-Even) | BTC CAGR Needed (10yr Break-Even) | Break-Even Year at 30% CAGR |
|---|---|---|---|
| 7.0% | ~19% | ~12% | ~2.3 years |
| 8.0% | ~21% | ~13% | ~2.5 years |
| 8.5% | ~22% | ~14% | ~2.8 years |
| 9.0% | ~23% | ~15% | ~3.0 years |
| 10.0% | ~25% | ~16% | ~3.3 years |
Assumes interest-only payments during draw period. Actual results depend on draw timing, rate changes, and Bitcoin price volatility. These are simplified models — use SaylorScope for a precise analysis.
Pros and Cons
Advantages
- +Among the lowest interest rates available for leverage (prime + 0-2%)
- +Flexible draw schedule allows dollar-cost averaging into Bitcoin
- +Interest-only payments during draw period reduce monthly cash outflow
- +Large available credit lines for homeowners with significant equity
- +No forced liquidation of Bitcoin during drawdowns (unlike margin loans)
Risks
- -Your home is collateral — default could lead to foreclosure
- -Variable rate means your cost basis shifts with Federal Reserve policy
- -Repayment period (after draw period) can significantly increase monthly payments
- -Extended Bitcoin bear markets create cash-flow pressure while rates accrue
- -Interest typically not tax-deductible when funds are used for non-home purposes
Risk Analysis: Drawdown Stress Test
Bitcoin has historically experienced drawdowns of 50-80% during bear markets. In a HELOC strategy, a drawdown does not trigger forced liquidation — but it does mean you are servicing debt on an asset worth far less than what you paid. Consider a $100,000 HELOC draw at 8.5% interest:
Monthly interest cost: ~$708
If BTC drops 50%: Your $100,000 position is now worth $50,000 while you continue paying $708/month
If BTC drops 80%: Your position is worth $20,000 — you have paid out $8,500/year in interest on a $20k asset
Recovery time: At 30% CAGR from the bottom of an 80% drawdown, it takes approximately 6.5 years just to return to your original $100,000 position
The critical question: can your monthly cash flow absorb $708 in HELOC payments for potentially 2-4 years while waiting for Bitcoin to recover? SaylorScope models this against your specific income, expenses, and existing debt obligations.
Frequently Asked Questions
Is it a good idea to use a HELOC to buy Bitcoin?
It depends on your financial profile, risk tolerance, and time horizon. A HELOC offers relatively low variable rates (often prime + 0-2%), but your home is collateral. If Bitcoin appreciates at a compound annual growth rate exceeding your interest cost, the strategy is profitable. However, variable rates can rise, and a severe Bitcoin drawdown could create financial stress while you still owe payments. Run the numbers with your specific situation before deciding.
What interest rate can I expect on a HELOC for Bitcoin investment?
HELOC rates are typically variable, based on the prime rate plus a margin. As of early 2026, most HELOCs fall in the 7-9% range, though well-qualified borrowers with strong equity positions may see rates closer to 6.5%. Remember that these rates can change monthly, which adds uncertainty to your break-even calculation.
How much home equity do I need for a HELOC?
Most lenders require at least 15-20% equity remaining in your home after the HELOC draw. For example, if your home is worth $500,000, you typically need to maintain at least $75,000-$100,000 in equity, meaning your mortgage balance plus HELOC cannot exceed $400,000-$425,000. Combined loan-to-value (CLTV) ratios above 80% are harder to qualify for.
What happens if Bitcoin drops 50% after I use a HELOC to buy it?
Unlike a margin loan, a HELOC does not have a margin call that forces liquidation. You still owe the monthly HELOC payments regardless of Bitcoin price. If Bitcoin drops 50%, your investment is underwater but you are not forced to sell. The risk is that you are making monthly payments on a depreciating asset. If your cash flow is tight, this can create real financial strain. SaylorScope stress-tests drawdowns of 50-80% so you can see the impact on your specific finances.
Can I deduct HELOC interest used to buy Bitcoin?
Under current U.S. tax law (post-2017 Tax Cuts and Jobs Act), HELOC interest is generally only deductible if the funds are used to buy, build, or substantially improve your home. Using HELOC proceeds to invest in Bitcoin typically does not qualify for the interest deduction. However, the interest may be deductible as investment interest expense on Schedule A, subject to limitations. Consult a tax professional for guidance on your specific situation.
Run Your Personalized HELOC Analysis
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Disclaimer: This content is for informational and educational purposes only. It is not financial, investment, tax, or legal advice. Bitcoin is a volatile asset. Using leverage to purchase Bitcoin carries significant risk, including potential loss of your home if you default on a HELOC. Always consult a qualified financial advisor before making leverage decisions. Past performance does not guarantee future results.