Understanding Your Home Equity Options
Three powerful ways to access your home's equity. Here's a plain-English breakdown of how each works, so you can choose with confidence.
HELOC
Home Equity Line of Credit
Think of a HELOC like a credit card secured by your home. You're approved for a maximum credit limit, and you borrow only what you need, when you need it. During the "draw period," you can borrow, repay, and re-borrow freely.
How it works
- 1You get a revolving credit line based on your equity
- 2Draw funds anytime during the 10-year draw period
- 3Pay interest only on what you borrow
- 4Repay and re-borrow as needed
- 5After draw period ends, repay over 20 years
Best for
Ongoing projects, emergency funds, or anyone who wants flexible access to cash without taking a lump sum.
Did you know? Fixed-Rate HELOC Options
Many HELOCs offer a fixed-rate conversion — you can lock all or part of your balance into a fixed rate with full principal & interest payments, just like a traditional loan.
- Lock in a fixed rate on draws you've already taken
- Pay principal + interest on the locked portion
- Keep the variable-rate line open for future draws
- Best of both worlds: flexibility + payment certainty
Home Equity Loan
Also called a HELOAN or second mortgage
A Home Equity Loan gives you a single lump-sum payment with a fixed interest rate and predictable monthly payments. Your existing mortgage stays untouched — this is a separate, standalone loan.
How it works
- 1Receive the full amount upfront in one payment
- 2Fixed interest rate that never changes
- 3Same monthly payment for the life of the loan
- 4Terms typically up to 20 years
- 5Your first mortgage remains separate
Best for
Large one-time expenses like home renovations, debt consolidation, or major purchases where you know exactly how much you need.
Cash-Out Refinance
Replace your existing mortgage with a new, larger one
A cash-out refinance pays off your current mortgage and replaces it with a new, bigger loan — you keep the difference in cash. Because it is a first mortgage, it typically offers the lowest rate of the three options, but you are resetting your entire loan term.
How it works
- 1New mortgage pays off your existing loan balance
- 2Borrow up to 80% of your home value in total
- 3Receive the difference as a cash lump sum
- 4One single mortgage payment going forward
- 5Often the lowest rate — but you restart the clock
Best for
Homeowners who can also lower their current rate — if today's rates beat what you have, you save on your whole mortgage while pulling cash out at the same time.
HELOC vs. Home Equity Loan vs. Cash-Out Refinance
| Feature | HELOC | Home Equity Loan | Cash-Out Refi |
|---|---|---|---|
| Funds access | Revolving credit line | One-time lump sum | One-time lump sum |
| Interest rate | Variable (fixed-rate option available) | Fixed | Fixed (lowest of the three) |
| Monthly payment | Interest-only or P&I if locked | Fixed, predictable (P&I) | Fixed, replaces your mortgage |
| Re-borrow funds | Yes, during draw period | No | No |
| Existing mortgage | Stays in place | Stays in place | Paid off & replaced |
| Best for | Flexibility & ongoing access | Known one-time expenses | Lowering your rate + cash out |
The Broker Difference
Why use a broker instead of going to your bank?
A single bank can only offer its own products. As a broker, we shop across multiple wholesale lenders to find the right fit for your situation.
More Options
Access to wholesale products from multiple lenders — not just one bank's menu.
Better Rates
Wholesale pricing is often lower than what retail banks offer directly to consumers.
Your Advocate
We work for you, not the lender — comparing terms to find your best deal.