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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Competitive interest rates that are lower than some other loan types
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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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You have consistent access to credit that they can use for emergency expenses or other quick costs
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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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You can expect to pay loan fees between 2% to 5% of your total loan expenses fees
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Borrowers looking to consolidate their debt payments can use a HELOC to pay off debts and improve their credit score
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If your home’s value drops while you have a HELOC, you could end up owing more than your home 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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Your interest rate will remain static over the life of your loan, giving you a consistent monthly payment amount
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Home equity lenders use your property as collateral for your loan, which means they can take it if you default
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If you have a big one-off expense or an investment opportunity, home equity loans distribute funds in lump-sum payments, unlike a credit card or a HELOC
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Home equity borrowers must typically have a higher-than-average credit score and an excellent debt-to-income ratio to qualify for most loan rates
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There are no limits on what you can use your home equity loan fund for
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Closing costs, appraisal fees, application fees and other charges can add up quickly and raise your overall loan bill
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If your home equity loan meets IRS guidelines such as buying, building or improving a home, you can deduct your interest payments from your taxes
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You can have negative equity in your home if your property loses value and you end up with loan debt that exceeds its value
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What Is Home Equity?
Home equity represents how much you own of your home compared to what the bank or mortgage lender owns. If you’ve paid off your home in full, you have 100% equity.
You can utilize your home’s equity without paying off your home in full, whether through a home equity loan or a home equity line of credit (HELOC). You can use your home’s equity for home improvements, repairs, debt consolidation and educational costs, among other things.
What Is a HELOC?
HELOC rates are tied more closely to banks than are first-mortgage rates, which tend to track the performance of the bond market. The Federal Reserve, which controls the interest rates that banks charge each other, has signaled to investors that it expects to raise those rates several times in 2022 and beyond.
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