What is the difference between a HELOC and a home equity loan?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
A HELOC is a revolving line you draw from as needed at a variable rate; a home equity loan is a lump sum at a fixed rate repaid on a set schedule. The HELOC offers flexibility, the equity loan offers payment certainty.
Choose a HELOC for ongoing or uncertain costs and an equity loan for a one-time known expense. We'll match the product to how you'll use the money.
Line versus lump sum
A HELOC is a revolving line of credit you draw from as needed, usually with a variable rate. A home equity loan gives you one lump sum upfront with a fixed rate and set monthly payments.
Both borrow against your equity, but they suit different needs.
Which to choose
A HELOC fits ongoing or uncertain expenses, like a phased renovation. A home equity loan fits a one-time known cost, like paying off debt, with predictable payments.
We will match the option to your goal. Apply now and we will compare both for you.