Lets you tap home equity without disturbing the main mortgage (good if you've locked in a low rate).
Typically lower upfront expenses than home equity loans.
Lower rate of interest than with credit cards.
Usually low or no closing costs.
Interest charged only on the quantity of money you use.
- Close X Icon Lenders might need minimum draws.
- Close X Icon Interest rates can change up or downward.
- Close X Icon Lenders may charge a range of charges, including yearly charges, application fees, cancellation costs or early closure fees.
- Close X Icon Late or missed payments can damage your credit and put your home at threat.
Alternatives to a HELOC
A HELOC is not the right option for each customer. Depending on what you need the cash for, one of these alternative options may be a better fit:
HELOC vs. home equity loan
While comparable in some methods - they both enable house owners to obtain against the equity in their homes - HELOCs and home equity loans have a couple of distinct differences. A HELOC functions like a credit card with a revolving credit line and usually has variable rate of interest. A home equity loan operates more like a 2nd mortgage, offering funds in advance in a swelling amount at a fixed rate of interest.
HELOC vs. cash-out refinance
A cash-out refinance replaces your current home mortgage with a bigger mortgage. The difference in between the initial mortgage and the new loan is paid out to you in a lump sum. The primary difference between a cash-out re-finance and a HELOC is that a cash-out re-finance requires you to change your present mortgage, while a HELOC leaves your existing mortgage undamaged
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Best home Equity Credit Line (HELOC) Rates For June 2025
Jeremy Verco edited this page 2 weeks ago