Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes.
A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home’s value and pay that amount back in monthly installments. A home equity line of credit is a variable-rate second mortgage that draws on your home’s value as a revolving line of credit.
Both options use your property as collateral for your payments, which means your lender can seize your property if you can’t repay what you borrow.
$100K HELOC Loan Rates
Ideal for Medium-Sized Projects
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A $100K HELOC is suitable for more extensive renovation projects or other significant financial needs. Compare the rates and terms to find the best fit for your situation.
$250K HELOC Loan Rates
Access More Funds for Major Investments
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For larger projects or investments, a $250K HELOC provides the necessary funds with various LTV options. Explore these rates to determine the right balance between borrowing capacity and risk.
$500K HELOC Loan Rates
Maximize Your Borrowing Power
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If you have substantial equity in your home and need significant financing, a $500K HELOC offers a great deal of borrowing power. Evaluate these options to find the optimal rate and term for your goals.
Pros and Cons of a HELOC
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Interest rates are generally lower than some other loan types such as personal loans
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HELOCs come with variable interest rates that fluctuate depending on several factors, which can make your monthly payments adjust with your interest rate at any given time
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If unexpected expenses pop up, HELOCs offer a credit line that you can tap into at any time
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Lenders use your property for collateral when you take out a HELOC, which jeopardizes your house if you default
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Interest payments may be tax deductible if you meet IRS guidelines and prove that you will use the funds to buy, improve or build a home
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HELOCs can come with significant fees that range from at least 2% to 6% of your total loan costs fees
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If you use a HELOC to repay other debt, you can reduce your credit utilization and improve your credit score
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You can end up with an upside-down loan, which means you owe more than your property is worth
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5-Year Home Equity Loan Rates (60 Months)
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A 5-year term offers a shorter repayment period with typically higher monthly payments. These products are suitable for borrowers looking for a quicker payoff.
10-Year Home Equity Loan Rates (120 Months)
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With a 10-year term, borrowers can enjoy a balanced monthly payment while still building equity quickly. 10-year home equity loans are ideal for medium-sized projects or financial needs.
15-Year Home Equity Loan Rates (180 Months)
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A 15-year term provides lower monthly payments compared to shorter terms, offering more affordability while still progressing toward your financial goals.
20-Year Home Equity Loan Rates (240 Months)
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Offering longer repayment and lower monthly payments, 20-year home equity loans are suitable for larger investments and long-term financial planning.
30-Year Home Equity Loan Rates (360 Months)
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The 30-year term maximizes affordability with the lowest monthly payments. These options are best for substantial borrowing needs and long-term investments.
Pros and Cons of a Home Equity Loan
| PROS | CONS |
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Home equity loan interest rates are fixed, meaning your monthly payments will stay the same over the life of your loan
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Home equity lenders use your home as collateral for the loan, which could result in foreclosure should you default on your monthly payments
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You’ll receive a lump sum that can be used for big purchases such as a home renovation
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Strict qualification requirements such as high credit score minimums and low debt-to-income ratios can make it difficult to secure a home equity loan
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Home equity loans are unrestricted, meaning you can use them for almost any expense, including home renovations or auto repairs
Your interest payments may be tax deductible if they meet IRS guidelines |
Closing costs, appraisal fees, application fees and other charges can add up quickly and raise your overall loan bill
If your home’s value decreases during your loan term, you may end up owing more than your loan is worth |
What Is Home Equity?
Your home equity is the appraised value of your home minus your remaining mortgage balance, usually expressed as a percentage. You’ll continue to build your home equity as long as you make on-time monthly payments and your home doesn’t vastly depreciate over time. Once you’ve paid your loan in full, you own all the equity in your home.
Why Is Home Equity Important?
Home equity is important because it signifies how much wealth you have based on how much of your home you own. The more equity you have, the more wealth you’ve accumulated.
If you ever need to utilize your home equity, you can tap into it with a home equity loan or home equity line of credit. You might also want to explore a cash-out refinance as an option to use your home’s equity.
What Is a HELOC?
A home equity line of credit, often referred to as a HELOC, lets homeowners convert the equity in a residential property into cash through a revolving line of credit that’s secured by your home.
When you get a HELOC, you can take the money available in installments as you need it and pay interest only on what you use.