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Should I get a HELOC or a Home Equity Loan?

Home Equity Line of Credit (HELOC)

A home equity line of credit is like a bank account where you can continuously access your available funds up to your credit limit. As you repay the loan you can access the money available again and again, without having to reapply for the loan. Easily transfer funds from your HELOC to your checking or savings account through online or mobile banking, or use complimentary checks to pay for purchases. The annual percentage rate is variable and will change with the prime rate.

Fixed Rate Home Equity Loan

With a fixed rate home equity loan, you borrow a fixed amount and pay back the loan over a pre-determined period of time. The monthly payment for a fixed rate loan is typically higher than a line of credit, but you may pay off the loan quicker.

Home Equity Loan

Home Equity Line of Credit

Fixed Rate Home Equity Loan

Monthly Payments

Minimum of $50, or as low as 1% of amount financed

Set amount


Up to 100%

Up to 100%

Repayment Term

Up to 22 years

Up to 15 years

Closing Costs



Annual Fee

No, for qualified credit


Tax Deductible Interest**



The home equity interest you pay is usually tax deductible.

The interest you pay on a home equity loan or line of credit is usually tax deductible, which further reduces the cost of borrowing. This type of deduction is not available for interest paid on credit cards, car loans, and personal loans. Generally, if you itemize deductions rather than take the standard deduction, the interest is deductible on a home equity line of credit or fixed rate home equity loan of up to $100,000, or $50,000 for married couples filing separately.

**Closing costs do not include cost of appraisal, if needed, which can range from $400 to $700. Consult a tax advisor about tax deductibility.

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