MortgageIQ
Avg rates as of July 23, 2026:30-yr fixed: 6.58%15-yr fixed: 5.96%FHA 30-yr: 6.83%VA 30-yr: 6.11%Source: Freddie Mac PMMS · Updated weekly (Thursdays)

For educational purposes only. Not financial advice. Always consult a licensed mortgage professional. Read disclaimer

HELOC vs Home Equity Loan

Enter your numbers once. See both options side by side. Know which one is right for you.

HELOC — Variable rate, flexible drawsHome Equity Loan — Fixed rate, lump sum

Your Home Equity

Current Home Value$450,000
Current Mortgage Balance$280,000

Available equity:$102,500

Max you can borrow:$102,500 (85% CLTV rule)

How Much Do You Need?

Amount Needed$75,000
How will you use it?
How long until you sell or pay off?7 years
Your Tax Rate28%

HELOC

Variable Rate · Flexible

Introductory Rate6.99%
Intro Period12 months
Your Margin2%

Your rate after intro: 10.50%

Draw Period10 years
Repayment Period20 years

Draw period payment

Interest only during draw period

$656.25/mo

Repayment payment

After draw period ends (P+I)

$748.78/mo

Total interest

$180,826

Total cost

$189,676

Effective rate

10.50%

Home Equity Loan

Fixed Rate · Lump Sum

Interest Rate8.5%
Loan Term
Origination Fees$500

Monthly payment

Fixed — same every month

$929.89/mo

Total interest

$36,587

Total cost

$94,771

Effective rate

6.12%

Head-to-Head Comparison

FeatureHELOCHome Equity LoanWinner
Rate TypeVariable ⚠️Fixed ✅Loan wins
Monthly Payment$656.25 → $748.78$929.89 alwaysDepends on use case
Draw Period Payment$656.25N/AHELOC wins
Repayment Payment$748.78$929.89HELOC wins
Total Interest$180,826$36,587Loan wins
Total Cost$189,676$94,771Loan wins
Payment CertaintyLow (rate changes)High (fixed)Loan wins
FlexibilityHigh (draw as needed)Low (lump sum)HELOC wins
Best ForOngoing projectsOne-time expenseDepends on use case
Risk LevelHigher (variable)Lower (fixed)Loan wins

HELOC could work if…

You need flexibility, lower initial payments ($656.25/mo), and can handle rate changes.

Home Equity Loan could work if…

You want a fixed $929.89/mo payment and total cost certainty over 10 years.

Key Differences Explained

Compare Home Equity Rates

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Best monthly payment

$656.25/mo

Frequently Asked Questions

What is the difference between a HELOC and a home equity loan?▾
A home equity loan gives you a lump sum at a fixed interest rate with fixed monthly payments. A HELOC is a revolving credit line with variable rates — you draw funds as needed during a draw period (typically 10 years) and pay interest only, then repay principal and interest during the repayment period.
Which has a lower interest rate — HELOC or home equity loan?▾
HELOCs often start with lower introductory rates, but rates are variable and can rise. Home equity loans typically have higher starting rates but are fixed for the life of the loan. Use our comparison calculator to see total cost for your specific situation.
Can I get both a HELOC and a home equity loan?▾
Yes, some homeowners have both, but your combined loan-to-value (CLTV) usually cannot exceed 85% of your home's value. Lenders evaluate your total debt against your home when approving either product.
What credit score do I need for a home equity loan or HELOC?▾
Most lenders require a minimum credit score of 620, though 680+ gets better rates. Higher scores qualify for lower margins on HELOCs and better fixed rates on home equity loans.
How long does it take to get approved for a HELOC or home equity loan?▾
Both typically take 2–6 weeks including appraisal and underwriting. Home equity loans may close slightly faster since they involve a single disbursement. Online lenders sometimes offer expedited timelines.

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Rate defaults based on Freddie Mac PMMS. Property tax rates from ATTOM Data. FHA MIP rates from HUD.gov. VA funding fees from VA.gov. Last updated July 2026. Learn about our data sources.