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.
Verify the details for your own situation against these government and agency sources: CFPB home equity loan guide and CFPB Owning a Home guide.