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Discover Home Equity Options

For most people, your home is your greatest source of financial strength. Home equity can be used in so many ways, from home improvements to supporting short-term financial needs.

Home Equity Loan Features:

  • You want to receive the loan as a lump sum.
  • Fixed interest rate and monthly payments.
  • Best option for one-time large expenses where you know the amount you need to borrow.
  • Once you receive the lump sum, you cannot borrow further from the loan.

Home Equity Line of Credit (HELOC) Features:

  • Revolving line of credit. Draw the amount you need based on the approved limit.
  • Variable interest rate and monthly payments.
  • Best option for ongoing projects or smaller expenses where the total amount is unknown.
  • As you make payments, your credit revolves and you can reuse the funds in your line again.

Home Equity Loans

Considerations 3-year Fixed Rate 5-Year Fixed Rate 10-Year Fixed Rate 15-Year Fixed Rate
Description A loan that will be paid back over 3 years, with an interest rate that doesn't change. A loan that will be paid back over 5 years, with an interest rate that doesn't change. A loan that will be paid back over 10 years, with an interest rate that doesn't change. A loan that will be paid back over 15 years, with an interest rate that doesn't change.
Best choice if
  • You want fixed payments for the full term of the loan.
  • You want the security of knowing your interest rate will not change over time.
  • You think interest rates could rise in the next few years.
Advantages You will pay off the loan faster, and pay less interest than a 5-, 10-, or 15-year fixed rate loan. You will pay off the loan faster, and pay less interest than a 10-, or 15-year fixed rate loan. Lower monthly payments than a 3- or 5-year fixed rate loan. Lower monthly payments than a 3-, 5-, or 10-year fixed rate loan.
Disadvantages Higher monthly payments than a 5-, 10-, or 15-year fixed rate loan. Higher monthly payments than a 10- or 15-year fixed rate loan. You will pay off the loan slower, and pay more interest than a 3- or 5-year fixed rate loan. You will pay off the loan slower, and pay more interest than a 3-, 5-, or 10-year fixed rate loan.
Description
  • When you take out a 5/5/5 adjustable rate loan, your interest rate will be fixed in 5-year increments. Your rate could adjust at the 5- and 10-year points of the loan.
Best choice if
  • You want a loan with the low payment flexibility of a longer-term loan combined with a lower interest rate.
  • You think interest rates may fall in the future and want to take advantage of a lower rate option.
Advantages
  • Lower initial interest rate than a traditional fixed rate loan.
  • Monthly payments are typically lower during the initial fixed rate period than a traditional fixed rate loan.
Disadvantages
  • Interest rates could increase at the 5- and 10-year points of the loan, which could increase your monthly loan payment.

Home Equity Line of Credit

Description
  • When you take out a 15-year home equity line of credit, you’ll have access to reusable funds of varying amounts throughout the term of your loan.
Best choice if
  • You want to make home improvements.
  • You need cash for an unexpected financial event.
  • You would like to leverage equity in your home for the down payment on the purchase of another house.
Advantages
  • Flexible payments with an option to pay only the interest.
Disadvantages
  • The interest rate could change over time.
  • Payments vary monthly based on the outstanding principal balance and interest rate that month.

For rates, assumptions and full disclosures, visit our Daily Rate Page.