Home Equity

Home Equity Loan vs. HELOC

Tapping into your home's equity? Compare the fixed stability of a loan versus the flexible (but variable) line of credit.

Borrowing Needs

Amount Needed Now$50,000

Target Payoff Time10 Years

Home Equity Loan (Fixed)

Fixed Interest Rate (%)

HELOC (Variable)

Current Rate (%)

Projected Avg (%)

Because HELOCs are tied to the Prime Rate, they fluctuate. We use the projected average rate for total cost calculation.

Lowest Total Cost

Home Equity Loan

Saves $6,417 in total interest over 10 years.

Head-to-Head Breakdown

Fixed Loan

Fixed Monthly Payment

$594

Pays off balance in 10 yrs

Total Interest Paid

$21,221

HELOC (Variable)

Required Min Payment

$354

Interest Only (Balance does not go down)

Amortized Payment*

$647

Total Interest Paid

$27,639

The HELOC Trap: A HELOC requires a very low "Interest-Only" payment during the 10-year draw period. If you only pay this minimum of $354, your balance never goes down. You must voluntarily pay the Amortized Payment of $647 to actually pay off the debt in 10 years.