Lets you tap home equity without disturbing the primary mortgage (great if you've locked in a low rate).
Typically lower in advance costs than home equity loans.
Lower rates of interest than with credit cards.
Usually low or no closing expenses.
Interest charged just on the amount of money you utilize.
- Close X Icon Lenders may require minimum draws.
- Close X Icon Interest rates can change up or downward.
- Close X Icon Lenders might charge a variety of fees, including yearly costs, application fees, cancellation fees or early closure charges.
- Close X Icon Late or missed payments can harm your credit and put your home at threat.
Alternatives to a HELOC
A HELOC is not the right choice for each customer. Depending on what you need the cash for, among these alternative options might be a much better fit:
HELOC vs. home equity loan
While similar in some ways - they both allow house owners to borrow versus the equity in their homes - HELOCs and home equity loans have a couple of unique distinctions. A HELOC functions like a charge card with a revolving credit line and normally has variable rate of interest. A home equity loan functions more like a 2nd mortgage, supplying funds upfront in a lump sum at a fixed rate of interest.
HELOC vs. cash-out re-finance
A cash-out refinance changes your present home mortgage with a larger mortgage. The difference in between the original mortgage and the new loan is disbursed to you in a swelling sum. The primary distinction between a cash-out refinance and a HELOC is that a cash-out re-finance needs you to change your current mortgage, while a HELOC leaves your present mortgage intact
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Best home Equity Credit Line (HELOC) Rates For June 2025
Jann Brickhouse edited this page 3 weeks ago