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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Like a traditional credit card, HELOCs give you access to a revolving line of credit that you can use as needed to cover unexpected expenses and other needs
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Defaulting on a HELOC can place your house at risk of foreclosure since your property serves as collateral, or insurance, for the lender
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The IRS allows HELOC borrowers to deduct interest payments from their taxes based on specific guidelines such as using your funds to buy, build or improve a home
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You may be on the hook for several fees and expenses, including appraisal fees, application fees and closing costs fees
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Using your HELOC to pay other debt consolidates your other payments, lowers your overall credit utilization and improves your credit score
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Borrowing against your home�s equity can be risky because you may owe more on your HELOC than your property is worth if your property value drops
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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
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Home equity loans offer fixed interest rates and monthly payments that stay the same over your loan term
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You must use your home as collateral to take out a home equity loan, which means you could lose it with too many missing or late 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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Home equity loans have strict requirements that can make them difficult to qualify for
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There are no limits on what you can use your home equity loan fund for
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Home equity loans come with several costs and fees that can add up and offset the benefits of a lower interest rate
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If you use the loan to buy, build or improve your home, you can potentially deduct your interest payments from your tax return
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Your home’s overall value can drop during your loan term, which could cause you to owe more than it’s worth
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Why Is Home Equity Important?
The more home equity you have, the higher your net worth rises. Building wealth is vital to having long-term financial health, and home equity is one way to build wealth.
Every time you make a mortgage payment, you increase your home equity, or how much you own of your home. The more equity you have, the more wealth you amass.
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.
How Does a Home Equity Loan Work?
You earn home equity every month when you make your mortgage payments. The more payments you make, the more your equity increases.
A home equity loan is a lump-sum loan based on how much of your home you own outright. So if your loan-to-value ratio (LTV) is 50%, you can borrow, say, 80% of that LTV. Most lenders won’t let you access 100% of your home’s equity, but even getting a portion of it through a home equity loan could be a game-changer for your big financial needs.
Find the Best HELOC Rates of 2025