Using Your HELOC for Energy Efficient Upgrades

Heating and cooling costs make up a significant portion of household energy use, and air leaks, inadequate insulation, and inefficient systems can increase utility bills. According to Energy Star, homeowners can save an average of 15%* on heating and cooling costs by air sealing their homes and adding insulation in key areas. Energy efficiency upgrades may help lower ongoing energy expenses while also improving home comfort and potentially increasing a home's appeal to future buyers. Consider using a home equity line of credit (HELOC) to help fund these improvements.   

Using a HELOC to Your Advantage

A HELOC allows you to borrow money against the equity of your home. Similar to a credit card, you can borrow money as needed and repay over time. Because a HELOC uses your home as collateral, you may be able to borrow a larger amount for a lower interest rate than with a credit card. Compared to other potential HELOC uses, energy efficiency upgrades can help pay for themselves over time.

Energy Efficiency Ideas

Here are some ways to utilize your HELOC balance to make your home more energy efficient:

• Replace your windows. Old and poorly insulated windows can be a source of drafts and leaks. Replace aging windows with newer, energy efficient models that are designed to better insulate your home.
• Switch to a tankless water heater. Water heaters use more energy than other home appliance. By changing to a tankless version, you can increase energy savings and extend the lifespan of your unit.
• Update your HVAC system. The heating, ventilation and air conditioning system contributes to a large portion of any homeowner’s energy bills. Find a system that is Energy Star-certified and allows for the control of separate temperature zones in your home. Make sure to schedule an annual servicing so it can continue running smoothly and efficiently for years to come.
• Maximize appliance efficiency. If you have appliances that are over a decade old, they may not hold up to current energy standards. Look for appliances with a high Energy Star rating to achieve long-term savings. Do your homework when appliance shopping-energy efficiency various between models. For example, an Energy Star-rated front-loading washing machine uses less energy and less water than a top-loading model. You can help maintain your appliances’ efficiency by taking the time to clean and replace essential parts every six months to a year.
• Improve your insulation. According to the U.S. Department of Energy, only 20% of homes built before 1980 were well insulated. If you have an older home, you may need to add insulation in the attic and walls. Your home’s overall energy costs will decrease, and you’ll probably be more comfortable as well.

Not sure where to start?

A home energy assessment is a great first step. A qualified professional can evaluate your home's energy performance, identify areas where improvements are needed most, and help you determine which upgrades will provide the greatest energy savings. Energy audit programs and offerings vary by state.

Make the Most of Your HELOC

A HELOC can be a smart way to finance home upgrades that improve your living space and potentially increase your home's value. To learn more about your options, send us an email or visit your local branch.

*Source: https://www.energystar.gov/saveathome/seal_insulate/why-seal-and-insulate

This article is for informational purposes only. It is not intended to serve as legal, financial, investment or tax advice or indicate that a specific DCU product or service is right for you. For specific advice about your unique circumstances, you may wish to consult a financial professional.