$200k equity in home 2.75% int. rate - HELOC for stock investing?

[Ryan Jones]

We put $200k down on our home two years ago, 15 year 2.75% fixed rate. (really for peace of mind because I know I could earn more elsewhere)  However, unless Trump is impeached this year, the stock market will probably be earning another 15-20% (I earned 20% in 2017).

Is a HELOC the most common way to go here? $150k HELOC should be about 3.25%? Then I still keep my fixed rate 15 year mortgage payments + owe interest on the HELOC right? But I'll probably be earning ~15% - 3.25% owed? Am I on the right track? Yes I know there is risk, but probably not too much this year as it's a great market. Thoughts?

[Andrew Postell]

@Ryan Jones while your method of thought is correct I think most people who wouldn't want to sell you a HELOC and get paid on it would probably be against this type of a strategy. HELOCs on primary residences are usually lower rates than the prevailing market rate. So even though your rate could adjust it will always adjust lower than the average mortgage rate. Meaning, if you ever needed to refinance, you would have to refinance into a higher rate. So while the HELOC rate would probably be good this year, what about next year? And the year after? If the rate on your HELOC changes to 5.5% then you would likely be refinancing into a 6.5% mortgage rate. We haven't seen those rates in a while but this is important to know about because after 10 years your HELOC will modify into something else entirely. It will stop being a HELOC at year 10. HELOCs are designed to be used like a credit card....you use it, pay it back....use it again, pay it back. That's why people who flip houses love them. But they have a method of paying them back...when they sell the property. They are NOT designed to be a permanent financing tool. As long as you have a way of paying this HELOC off right away then go with your plan. But if you do not have a plan, then please be very, very careful of implementing this strategy.