What is the main difference between a home equity loan and a HELOC?

A home equity loan provides a lump sum with a fixed interest rate and predictable monthly payments, while a HELOC offers a revolving credit line with a variable rate that can fluctuate over time based on market conditions.

Can I switch from a HELOC to a fixed rate later?

Some HELOCs offer a fixed-rate conversion option that allows you to lock a portion of your outstanding balance into a fixed rate, but this depends on the specific lender's terms and may involve additional fees.

How much can I typically borrow with a home equity product?

Lenders generally allow you to borrow up to 80% to 85% of your home's current value minus the balance remaining on your first mortgage, though exact limits vary by institution and credit profile.

What factors affect the monthly payment on a HELOC?

The monthly payment on a HELOC can change because it is based on the current outstanding balance and the variable interest rate, which may increase or decrease over the draw and repayment periods.

Housing & Real EstateFree Tool

Home Equity Loan vs HELOC Calculator

Provided byBankrate Calculatorsbankrate.com

Compares fixed-rate home equity loans against variable-rate HELOCs for a borrowing scenario.

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Screenshot of Home Equity Loan vs HELOC Calculator on Bankrate Calculators — bankrate.comOpen the live tool →

About this tool

What Home Equity Loan vs HELOC Calculator does

A home equity loan or home equity line of credit (HELOC) both allow you to borrow against your ownership stake in your home, or your equity. The equity is the difference between what you still owe on your mortgage and what your home is worth. Generally, the interest rates on home equity products are lower compared to other forms of financing like credit cards. Home equity loans come with fixed rates and a lump sum, while HELOCs come with variable rates (and sometimes a fixed-rate conversion option) and a revolving credit line. These calculators can help you answer the following questions: How much equity do you currently have? Should you borrow against your home's equity? Should you get a line of credit or a second mortgage? How much will you be able to borrow? Would it be a good idea to pay off other debt using your home's equity? How long will it take to repay a home equity loan? Today s Home Equity Loan Rates | Home Equity Calculators Calculator Icon Home equity loan calculator Calculator Icon Line of credit payoff calculator | Remodeling Calculators Loan Home Improvement Icon How much carpet will you need? Loan Home Improvement Icon How much paint will you need? Loan Home Improvement Icon How many tiles will you need? Loan Home Improvement Icon How much wallpaper will you need? | Related Calculators Calculator Icon Loan prequalification calculator Calculator Icon Loan repayment calculator Calculator Icon Mortgage calculator: Calculate your payment and more Calculator Icon Loan comparison calculator | See our full list of calculators by topic Loan Icon Mortgages Auto Car

Step by step

How to use the Bankrate Calculators Home Equity Loan vs HELOC Calculator

1
Enter the loan amount you wish to borrow
2
Input the interest rate for the loan or line of credit
3
Specify the repayment term in years
4
Provide your current home value and existing mortgage balance to calculate available equity
5
Review the generated monthly payment estimates and total cost comparison between the fixed-rate loan and variable-rate HELOC

Is it right for you

Best for

Homeowners evaluating whether a fixed-rate lump sum loan or a variable-rate revolving line of credit better fits their borrowing needs and repayment comfort level.

Limitations

Results depend on the accuracy of user-entered interest rates and home value estimates
Does not account for closing costs, fees, or variable rate caps that may apply in practice
Output is illustrative and not a loan approval or official quote from a lender

Questions

Home Equity Loan vs HELOC Calculator FAQ

What is the main difference between a home equity loan and a HELOC?: A home equity loan provides a lump sum with a fixed interest rate and predictable monthly payments, while a HELOC offers a revolving credit line with a variable rate that can fluctuate over time based on market conditions.
Can I switch from a HELOC to a fixed rate later?: Some HELOCs offer a fixed-rate conversion option that allows you to lock a portion of your outstanding balance into a fixed rate, but this depends on the specific lender's terms and may involve additional fees.
How much can I typically borrow with a home equity product?: Lenders generally allow you to borrow up to 80% to 85% of your home's current value minus the balance remaining on your first mortgage, though exact limits vary by institution and credit profile.
What factors affect the monthly payment on a HELOC?: The monthly payment on a HELOC can change because it is based on the current outstanding balance and the variable interest rate, which may increase or decrease over the draw and repayment periods.

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