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A HELOC and a home equity loan both let you borrow against the value of your home. The difference is how you receive the money and how your rate behaves.
This comparison goes criterion by criterion, with rates published today by four lenders.
HELOC vs home equity loan: side by side
| Criterion | HELOC | Home equity loan |
|---|---|---|
| How you get money | Draw as needed | Lump sum at closing |
| Rate | Usually variable | Usually fixed |
| Monthly payment | Changes; can rise after draw period | Same every month |
| Interest charged on | Only what you draw | The full amount |
| Fees | Vary; some lenders waive closing costs | Vary by lender |
| Best use | Ongoing or uncertain costs | One known expense |
| Risk | Home secures the debt | Home secures the debt |
General product features, based on the CFPB’s HELOC guide and lender pages checked September 23, 2026.
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How you receive the money: HELOC wins on flexibility
The CFPB describes a HELOC as an open-end line you can borrow against repeatedly during the “draw period.” A home equity loan gives you the whole amount at once. If your costs arrive in stages, like a renovation, a HELOC avoids paying interest on money you haven’t used yet.
Rate and payment: the home equity loan wins on predictability
HELOCs usually have a variable rate tied to the Prime Rate, so payments can change month to month. When the draw period ends, the CFPB notes you typically repay over 10 to 20 years, with payments often significantly higher. A home equity loan locks the rate and payment from day one. U.S. Bank’s example: $50,000 over 120 months at 7.40% is $590.90 a month.
Cost: it depends on the lender
Fees vary more than the product type. Bank of America charges no application fee, no closing costs on lines up to $1,000,000 and no annual fee. U.S. Bank charges a $75 annual fee after the first year, unless you have its Platinum Checking Package, and a 1% early closure fee (maximum $500) within 30 months. Figure charges an origination fee of up to 4.99% of the initial draw. Compare the APR and every fee, not just the headline rate.
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Risk: a tie, and a serious one
Both products use your home as collateral. The CFPB warns that if you fall behind, you could lose your home. A lender can also freeze a HELOC if your finances change. Only borrow an amount you could repay if your income dropped.
Taxes and your right to cancel: the same rules for both
Interest on home equity loans and lines of credit is deductible only if the money is used to buy, build or substantially improve the home that secures the loan, according to IRS Publication 936. Using it to pay off cards or buy a car does not qualify. Under the Truth in Lending Act, implemented by the CFPB’s Regulation Z, you generally have three business days to cancel a home equity line or loan on your principal home.
Lenders we checked
U.S. Bank
- HELOC: 6.20%–11.10% variable APR as of September 17, 2026; 7.05% national average shown. The rate never exceeds 18% APR or state law.
- Home equity loan: 7.40% fixed APR for 10- or 15-year terms, as of September 21, 2026, on $50,000–$99,999 up to 60% LTV.
- Best rates need: a FICO score of 730 or higher, autopay from a U.S. Bank account and a 60% LTV.
Bank of America
- HELOC: 5.740% introductory variable APR for 6 months, then 8.525% variable APR, based on rates as of September 23, 2026.
- Assumptions: a $100,000 line, with 0.125% autopay and 0.600% initial-draw discounts. Intro rates vary by state.
- Extras: convert $5,000 or more to a fixed rate.
Figure
- HELOC: initial APRs from 7.25% to 14.70%, as of September 23, 2026.
- Amounts: $15,000 to $750,000. The initial draw is funded at origination, and you can redraw as you repay.
- Speed: online application; funding in as few as 5 days; no in-person appraisal under $400,000.
Achieve
- Product: a fixed-rate home equity line that Achieve calls a home equity loan. You get the full amount up front and can redraw during a 5-year draw period.
- Rates and amounts: 5.75%–15.17% fixed APR; $15,000 to $700,000; 10- to 30-year terms.
- Requirements and fees: minimum 600 credit score; closing fees from $750 to $10,304, which can include origination of up to 3.5%.
Verdict by profile
- Choose a HELOC if your costs come in stages, you can handle a changing payment, and you plan to repay soon after drawing.
- Choose a home equity loan if you need one known amount and want a payment that never changes.
- Consider a cash-out refinance only if the new first-mortgage rate works for you; see our look at mortgage and refinance rates in 2026.
- Think twice about using home equity for card debt. A 0% balance transfer card or one of the best debt consolidation loans doesn’t put your house on the line.
- Don’t tap equity for emergencies if you can avoid it; building an emergency fund is the safer cushion.
How we compared
- Checked: every rate and fee on September 23, 2026, on each lender’s official page. Some lenders date their rates a few days earlier, as noted.
- Order: no ranking. U.S. Bank comes first because we checked both of its products, then the two HELOCs we checked, then Achieve’s hybrid product.
- Legal and tax rules: from consumerfinance.gov and irs.gov only.
- Independence: no lender paid for placement.
FAQ
How does a HELOC calculator estimate how much I can borrow?
Most start from your home value times a maximum loan-to-value, minus your mortgage balance. Bank of America’s example: a $200,000 home at 85% is $170,000; minus a $120,000 mortgage leaves a $50,000 maximum line.
How does a HELOC payment calculator work?
It needs your balance, rate and phase. During the draw period some lenders allow interest-only payments. U.S. Bank warns that choosing interest-only can make your payment rise, possibly substantially, once repayment begins.
Is a HELOC loan calculator different from a home equity loan calculator?
Yes. A home equity loan calculator uses one fixed rate and term, like any installment loan. A HELOC calculator should also model rate changes and the switch from draw to repayment.
Is HELOC or home equity loan interest tax deductible?
Only when the money buys, builds or substantially improves the home securing the loan, per IRS Publication 936. Limits apply to your total mortgage debt.
Can I cancel after I sign?
For a HELOC or home equity loan on your principal home, federal rules generally give you three business days to cancel. Check your closing documents for the exact deadline.
For the full picture, see our hub Best Personal Loans 2026 (US), our comparison of the best personal loans of 2026 and our guide to personal loans for bad credit with fair terms.
Sources
- U.S. Bank HELOC — official page
- U.S. Bank home equity loan — official page
- Bank of America home equity — official page
- Figure HELOC — official page
- Achieve home equity — official page
- CFPB — What is a home equity line of credit (HELOC)?
- CFPB — Right to rescind
- IRS — Publication 936, Home Mortgage Interest Deduction
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