[RickFLM4]

HELOC is variable rate so not sure why someone would want to pay off fixed rate mortgage and go with just HELOC. HELOCs generally have different options on payments you select upfront - interest only, interest + 1% principal, etc. and have provisions that allow you to convert a portion of the balance to fixed rate (but probably at a higher rate than what you would get on a primary fixed rate mortgage). If going interest only, it is not forever - after a period (say 10 years) you can no longer draw on it and the HELOC needs to amortize with principal payments over the remaining term (say another 10-20 years).

I have a HELOC with U.S. Bank. My borrowing limit on the HELOC was set by reference to a combined (primary + HELOC) LTV of 90%, determined on date the HELOC originated. The limit does not go up as I pay down primary or property value goes up. However, it can go down if the bank thinks I can't repay or the real estate market has a free fall again. The combined LTV allowed varies by lender and it may be influenced by various factors, such as income, credit score, state in which property is located, etc.