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HELOC vs Home Equity Loan Calculator
Compare the two most common second-lien borrowing options. See how a HELOC's flexibility and variable rate stack up against a fixed-rate home equity loan on payment, total interest, and closing costs.
Amount to borrow
HELOC (variable rate, flexible draws)
Home equity loan (fixed rate, lump sum)
HELOC
$106,654
total interest + closing costs
Interest-only payment (draw): $385/mo
Amortizing payment (repay): $458/mo
Home equity loan
$41,627
total interest + closing costs
Fixed payment: $492/mo
Term: 180 months
Which is cheaper at these rates?
Home equity loan is projected to cost $65,027 less, with a fixed rate that locks in the payment.
HELOCs have variable rates tied to prime — if rates rise, so does your interest cost. Home equity loans fix the rate and the payment, which is safer but less flexible than a revolving line.
How to Use
- Enter the amount you want to borrow.
- For the HELOC, enter the current rate, draw period in years, repayment period in years, and any closing costs.
- For the home equity loan, enter the fixed rate, term in years, and closing costs.
- Compare monthly payment (interest-only vs fully amortizing), total interest, and total cost including closing costs.
- Use the HELOC if you need flexible, staged draws and can handle rate movement; use the home equity loan for one lump sum with a predictable payment.
Frequently Asked Questions
What's the main difference between a HELOC and a home equity loan?
A HELOC is a revolving line of credit with a variable rate and a draw-then-repay structure. A home equity loan is a one-time lump sum with a fixed rate and fixed monthly payment. HELOCs are more flexible; home equity loans are more predictable.
Are HELOC rates usually higher or lower than fixed home equity loan rates?
HELOC rates track prime + a margin, and often start below a fixed home equity loan rate — but they adjust as prime moves. Home equity loan rates are higher upfront but locked for the term.
Can I deduct the interest?
Interest on both products is deductible if the funds are used to buy, build, or substantially improve the home securing the loan, subject to IRS mortgage interest limits. Using the funds for other purposes usually breaks the deduction.
Which has lower closing costs?
HELOCs typically have low closing costs (often under $1,000, sometimes zero). Home equity loans resemble a mortgage — expect $1,500–$5,000 in closing costs depending on lender and state.
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