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Home Equity


How to use them

You could borrow money with a home equity loan or home equity line of credit (HELOC). On the surface, the similarities between the two might make it challenging to decide which one to use for your situation. Both offer the same features:

  • Allow you to borrow against the equity of your home.
  • Provide you with cash when you need it.
  • Cover home improvement projects, emergency expenses, tuition, and more.
  • Lower interest rates than unsecured loans or a typical credit card.
  • Provide tax-deductible benefits (but check with your tax advisor).
Mother and child at a computer

When is a HELOC the best choice?

Scenario: You have recurring borrowing needs and have to access additional funds like you would on a credit card. A HELOC is flexible and often used either as a safety net or to cover unexpected expenses. Some features:

  • Similar to a credit card establishes a specific credit limit.
  • Features revolving availability over a specified period of time (usually 10 years).
  • Provides the ability to write a check from your line of credit.
  • You only pay interest on the credit you use.

How to pay your HELOC

  • Minimum monthly payments on the amount you owe.
  • Minimum amount may fluctuate because interest rates are variable.
  • Following the typical 10-year draw period, the repayment period is typically 15 years.

Some HELOCs allow interest-only payments during the draw period. Others require minimum payments of principal and interest. Clarify the details of your payment with your lender.

Once the draw period ends, you’ll have to repay the remaining balance on your HELOC, with principal and interest. You may be able to refinance some or all of the balance you owe on a variable-rate HELOC to a fixed-rate loan.

Estimate a HELOC payment

*Loans are subject to credit and property approval

When is a Home Equity Loan the best choice?

Scenario: You need a loan with a fixed rate locked in for the life of the loan. You want to budget knowing that your payments will always remain the same as you pay it off completely over a specific period of time.

  • Works like a home mortgage or other traditional installment loan.
  • Apply to borrow a specific amount based on your need.
  • Make regular payments during a fixed repayment period.
  • Receive a lump sum after the rescission period. The rescission period gives you the right to cancel a home equity loan, or line of credit for 3 business days after closing on your primary residence.

How to pay your home equity loan

  • Your payment will be the same every month.
  • Your payment will include principal and interest based on the total amount borrowed.

Estimate a home equity loan payment

*Loans are subject to credit and property approval

Today’s Home Equity Rates

Program Interest Rate APR
15 Year Home Equity Loan 7.375%
Home Equity Line of Credit 8.500%

Last Updated: 04/12/2023

Click on the Rate for Important Loan Information. For additional rate information or more home loan options, please talk with one of our Mortgage Lenders.

Summary: HELOC’s and home equity loan comparison chart

Criteria Home Equity Line Of Credit Home Equity Loan
Duration of need On-going, open-ended, longer-term access Specific one-time projects, pre-planned initiatives
Access to funds Draw as you need it Lump-sum amount
Payments Option of paying interest only on what you use and/or making regular or periodic reductions to your principal balance. A set monthly payment of principal and interest.
How long you plan to stay in your home Shorter-term Longer-term
Are there closing costs? No closing costs No closing costs
How much you can pay each month Typically smaller monthly minimum payments if interest-only option is selected. Depends on total borrowed and interest rates.
Monthly Payment Will vary due to changes in interest rates Fixed payment
Calculators  are estimates, used for educational purposes only. Please consult a tax or financial planner for additional assistance.


Still want to talk about your options?

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