If you own a home and have built up equity, a lender may let you borrow against it. The two most common ways to do that are a home equity loan and a home equity line of credit (HELOC). They work differently, and both put your home on the line.
Home equity loan
A home equity loan usually pays out a lump sum up front. You repay it in fixed monthly payments over a set term, so the payment is predictable. It can suit a one-time expense with a known cost, such as a specific renovation.
HELOC
A HELOC is a revolving line of credit. During a draw period you can borrow what you need, up to your limit, and you typically pay interest only on what you've drawn. Many HELOCs have variable rates, so payments can change. When the draw period ends, a repayment period begins and the payment can rise noticeably.
Your home secures the debt
With either product, your home is the collateral. If you can't make the payments, you could lose your home to foreclosure. That makes it worth thinking carefully about how a new payment fits your budget, including if rates rise or your income changes.
What to compare
- APR and rate type: fixed or variable, and how a variable rate can change.
- Fees and closing costs: appraisal, origination and annual fees can add up — see our guide on origination fees.
- Draw and repayment periods: for a HELOC, how long you can draw and what the payment looks like afterward.
- Total cost over time: not just the monthly payment; our guide on comparing offers by APR, fees and term walks through this.
Lendara is a marketplace, not a lender. Participating lenders set their own rates, fees and terms, which vary by applicant and aren't guaranteed. When you're ready, you can explore home equity loan and HELOC options from participating lenders.
See what offers may be available to you
Explore home equity and HELOC options See what offers may be available to you