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Fund your home project with a home equity loan

Are you ready to make a change to your home? If you’re planning to take on a home improvement project, a home equity loan might be for you. When you take out an amortizing home equity loan, you’ll make stable monthly payments over the term of your loan. This tool is best for those who need cash immediately, and have a specific payoff end date and purpose in mind.

Types of home equity loans

15-year and 10-year fixed-rate

When you take out a 15-year or 10-year home equity loan, you’ll pay off your loan balance faster than a longer-term loan.

Apply for a 15-year or 10-year fixed-rate loan if you:

  • Have a larger loan amount.
  • Want monthly payments to remain fixed for the life of the loan.
  • Think interest rates could rise and want to maintain the current interest rate over the life of your loan.

Considerations:

  • This loan will be outstanding for a longer period of time.
  • Interest rates on the 15- and 10-year fixed home equity products are higher than 5-and 3-year loans.
  • There are never any prepayment penalties.

5-year or 3-year fixed-rate

When you take out a 5-year or 3-year fixed-rate home equity loan, your monthly payments will be higher, but you’ll pay down your loan faster.

Apply for a 5-year fixed-rate loan if you:

  • Want to pay off your loan balance quicker.
  • Want a lower interest rate.
  • Want monthly payments to remain fixed for the life of the loan.
  • Think interest rates could rise and want to maintain the current interest rate over the life of your loan.

Considerations:

  • You’ll make more progress toward the principal and rebuild your equity faster compared to a longer-term loan of the same amount.

5/5/5 adjustable-rate

When you take out a 5/5/5 adjustable-rate loan, your loan rate will stay fixed in 5-year increments. Your rate will only adjust twice over the term of your loan.

Apply for a 5/5/5 adjustable-rate loan if you:

  • Want a loan with the low payment flexibility of a longer-term loan combined with a lower interest rate.
  • Think interest rates may fall in the future and want to take advantage of lower rate option.

Considerations:

  • Interest rates could increase at the 5-year and 10-year points of the loan, which could adjust your monthly payment.