economy
Home equity loan and HELOC rates: Aug. 25, 2026
A home equity loan and a home equity line of credit both let homeowners borrow against the equity they’ve built up. Because the debt is secured (backed by your house), lenders typically offer lower rates than you’d get with an unsecured loan.
TL;DR
- Home equity loans and HELOCs offer lower interest rates because they are secured by your home.
- A home equity loan disburses a single lump sum, whereas a HELOC provides a flexible, reusable line of credit.
- Borrowing against home equity can grant access to larger sums than personal loans.
- The primary risk of borrowing against home equity is the potential foreclosure and loss of the home.
- Additional costs associated with home equity borrowing include origination fees, appraisals, and paperwork processing, typically ranging from 2% to 5% of the loan amount.