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
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
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
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.
*Data accurate as of September 11, 2024
Pros and Cons of a HELOC
5-Year Home Equity Loan Rates (60 Months)
LOAN TERM APR
60.00% LTV, $50K
8.07%
80.00% LTV, $50K
8.33%
90.00% LTV, $50K
9.05%
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)
LOAN TERM APR
60.00% LTV, $150K
8.25%
80.00% LTV, $150K
8.52%
90.00% LTV, $150K
9.20%
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)
LOAN TERM APR
60.00% LTV, $200K
8.44%
80.00% LTV, $200K
8.73%
90.00% LTV, $200K
9.37%
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)
LOAN TERM APR
60.00% LTV, $250K
8.68%
80.00% LTV, $250K
9.04%
90.00% LTV, $250K
9.59%
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)
LOAN TERM APR
60.00% LTV, $500K
9.24%
80.00% LTV, $500K
9.87%
90.00% LTV, $500K
10.00%
The 30-year term maximizes affordability with the lowest monthly payments. These options are best for substantial borrowing needs and long-term investments.
*Data accurate as of September 11, 2024
Pros and Cons of a Home Equity Loan
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.
Why Is Home Equity Important?
Two major ways you build home equity is when the value of your home goes up (appreciation) and the balance of your mortgage goes down. As you make ongoing, regular monthly payments to your mortgage, your home equity will increase and so will your wealth.
Borrowing against your home equity lets you use money for major financial needs, including:
- Home improvements, upgrades or repairs
- Consolidating debt
- Making large payments on high-interest debt
- Educational costs
How Do I Calculate Home Equity?
You’ll calculate your home equity by taking your home’s current value—based on its most recent appraisal—and subtracting it from your current mortgage balance.
For example, say your home is valued at $500,000 and your mortgage’s outstanding balance is $250,000. This would mean you have $250,000 in home equity, and your loan-to-value ratio (LTV) would be 50%. If you’re looking for a home equity loan or line of credit, lenders usually only approve up to a certain LTV ratio. For example, some lenders require 80% LTV or less.
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