HELOC vs Home Equity Loan: Which Costs Less?

Your home equity can be a powerful financial tool for renovations, debt consolidation, or major expenses, but choosing between a HELOC and a home equity loan requires understanding how each product works and what it truly costs. Our HELOC calculator helps you estimate available equity, draw period payments, and total interest for both options.

A HELOC offers flexible access to funds with variable interest rates during a draw period of 5 to 10 years, followed by a repayment period with fixed payments. A home equity loan provides a lump sum at a fixed rate. The calculator compares monthly payments and total costs for both, so you can choose based on how and when you need the money.

Most lenders allow you to borrow up to 80 to 85 percent of your home value minus your outstanding mortgage balance. Use our home equity calculator to determine your available equity, and our amortization calculator to see how the repayment schedule affects your total cost over time.