No. The current balances on your mortgage debt are not factors in your home's cost basis. Whatever costs you actually paid for improvements is added to your cost basis based on your tracking of those costs over the years. When you sell the home you put in the cost basis as part of the home sale entries.
So only when you use the line of credit to pay for improvements is your cost basis affected. So you could have a current balance of 25K on the HELOC but have paid more than 100K in past years for improvements that increased your cost basis.
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