Get more funds, get more done.
Ready to put your home’s equity to work? Learn more about home equity loans and find one that’s right for you.
It’s like a helping hand from your own home.
Simply put, a home equity loan lets you borrow against the difference between what your home is worth and what you still owe.1
You can choose between a lump sum and a flexible line of credit.
HELOC
A home equity line of credit (HELOC) is best for uncertain expenses that may have surprise costs.
Home Equity Loan
A fixed-rate home equity loan is best for one-time expenses and predictable payments.
Estimate your equity
Calculate your home’s current equity for a more confident idea of how much you could borrow.
Once you’re approved for a home equity loan, how you use the funds is up to you.
Improve your home
Use your home's equity to invest in the place you live.
Invest in your future
Put your equity to work toward long-term goals and opportunities.
Fund what matters most
Use your equity to cover major purchases, important milestones, and unexpected expenses.
HELOC? Or fixed rate? Discover which home equity loan is right for you.
A HELOC is likely a better fit for costs that happen (or pop up unexpectedly!) over time, while a fixed-rate home equity loan is ideal for detailed, quoted expenses you can plan for.
HELOC vs. home equity loans: a closer comparison
HELOC: flexible funds
+ Borrow as needed up to approved limit
+ Only pay interest on what you use
+ Interest-only payments at first
– Rates may change
Learn more >
A locked-in lump sum
+ Fixed rate won’t change
+ Predictable payments
+ Simplified lump sum
– Payments based on entire sum
How to choose a home equity loan
Bullet points not doing it for you? Here’s a step-by-step guide on how to choose a home equity loan, based on your needs and means.
Estimate your equity
First things first, calculate your home’s available equity to get a better idea of how much funding you may qualify for.
Crunch the numbers
Assess your needs
What are you planning to use your home equity loan funds for? Do you know exactly how much you’ll need? How long will you need funds for? How comfortable are you with changing monthly payments?
Make a confident comparison
Now that you know what you need, choose between a HELOC’s flexible access over time and a fixed-rate home equity loan for a lump sum with predictable monthly payments.
Take the next step
Once you know which loan is right for you, explore rates, start an application, or schedule time with a specialist.
Figure out how much you can borrow with a home equity line of credit.
All your home equity questions, answered
Think of it as “how much of your home you really own,” Home equity is calculated as the difference between your home’s current value and what you still owe on your mortgage.
As you pay down your mortgage, or as your home’s value increases, the equity available to you may grow. Because equity has value, you can borrow against it as collateral. That’s where home equity loans come in.
A HELOC and a traditional, fixed-rate home equity loan both let you borrow against your home’s equity, but they work differently. A HELOC gives you flexible access to a line of credit, while a home equity loan provides a lump sum at a fixed rate.
A HELOC only charges interest on the funds you draw, while you're responsible for the full approved amount of a fixed home equity loan.
A HELOC and a traditional, fixed-rate home equity loan both let you borrow against your home’s equity, but they work differently. A HELOC gives you flexible access to a line of credit, while a home equity loan provides a lump sum at a fixed rate.
With a fixed-rate home equity loan, you receive the full loan amount upfront and begin making payments on that amount right away.
A HELOC is likely a better choice if you need funds for:
- An ongoing renovation
- A project that may have unexpected costs
- A project whose budget and scope can’t be accurately estimated
- Consolidating debt, as HELOC rates are typically lower
A fixed home equity loan could be a better choice if you:
- Know exactly how much funding you need
- Want to lock in a certain rate that won’t change
- Want predictable monthly payments
When comparing a HELOC vs a fixed-rate home equity loan, the better option ultimately depends on your goals, timeline, and comfort with changing payments vs fixed rates.
Every homeowner's goals are different. Whether you're improving your home, investing in future opportunities, or covering major expenses, a home equity loan can give you access to funds for a wide range of needs. Homeowners commonly use home equity loans for everything from renovations and education costs to debt consolidation, vehicles, and unexpected expenses.
Improve Your Home
Put your home's equity back into the place you live.
- Kitchen and bathroom remodels
- Home repairs and maintenance
- Roofing, siding, windows, and other exterior updates
- Flooring, painting, and interior refreshes
- Room additions and major renovations
- Accessibility or aging-in-place improvements
- Landscaping, patios, decks, and outdoor living spaces
Invest in Your Future
Use your equity to help fund long-term goals and opportunities.
- College tuition and education expenses
- Career training or professional development
- Starting or expanding a business
- Purchasing a vacation home, rental property, or land
- Creating an emergency fund or financial safety net
- Other investments in your future plans and goals
Fund What Matters Most
Gain flexibility for life's important purchases, milestones, and unexpected costs.
- Vehicles, boats, RVs, and recreational equipment
- Debt consolidation
- Weddings and celebrations
- Medical expenses
- Emergency repairs and unexpected bills
- Major planned purchases
- Family caregiving expenses
- Relocation-related costs
- Other personal financial needs
Our handy calculator can help you crunch the numbers on how much home equity you currently have available, and what that means for your potential loan approval.
Like most things in life: it depends! Getting a home equity loan can be a great idea if have a clear purpose, enough available equity, and a repayment plan that fits your budget.
But, because you're borrowing against your home, it is important to borrow thoughtfully and understand the payments, costs, and terms before moving forward. We recommend against using a home equity loan for frivolous or impulsive purchases.
At the end of the day, the best choice depends on how you plan to use your funds — and whether you have a plan in place to pay them back.
If you have any more questions, our home equity specialists would be happy to help you understand what a HELOC or fixed-rate home equity loan could do for you.
“Our HELOC really helped us take our dream home from great to perfect.”2
— David & Shelby, LMCU members
Disclosures
Subject to credit approval and income qualification.
All featured LMCU members were compensated for their time.
