Home Equity Loan or 2nd Mortgage
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HEL vs. HELOC
The table gives a brief difference between home equity loan and home equity line of credit. Pledging home equity as collateral, they vary in the type of credit - one-time loan and revolving credit – and interest rates applied. Pay attention to qualifying requirements of HEL and HELOC and apply online.
| Home Equity Loan | Home Equity Line of Credit |
| Home used as collateral | Home used as collateral |
| Requires good to excellent credit history | Requires good to excellent credit history |
| One-time lump-sum loan, often with a fixed interest rate | Line of revolving credit with an adjustable interest rate |
| For one-time financing, planned needs | For ongoing financing, unexpected needs |
| Tax Deductible Interest | Tax Deductible Interest |
Home equity loan (HEL) and home equity line of credit (HELOC) both pledge your home equity as collateral, but they vary in the principle of lending. While HEL is a one-time, lump-sum loan, HELOC is a revolving type of credit. Home equity loan is typically more expensive in APRs due to the risk of cashing out all the money at once. HELOC charges lower variable APR only to the amount drawn against the line.
National Mortgage Averages
| Mortage Type | Today | Last Week | Change |
| 10 Years | 7.47% | 7.47% | — |
| 15 Years | 7.61% | 7.62% |  -0.01 |
Home Equity: Money for Different Needs
While home equity loan (HEL) and home equity line of credit (HELOC) are both used to borrow against the equity in the home, they are different in principle. Applying for a HEL, you get a one-time lump-sum loan amounting to the equity already built.
A home equity loan is often much riskier, as the borrower cashes out the total value of the equity, and so much more expensive. You usually pay a high fixed interest rate applied to the entire sum of the equity borrowed.
A HELOC is a fine option when you don’t need all the money at once but prefer a line of credit instead. Using the home equity as collateral, the lender issues you a proper line of credit and applies a variable interest rate to the amount drawn against it.
Your total equity becomes the credit limit and you can borrow up to the limit any time. A second mortgage is often used as synonym to HEL and HELOC and stands for any loan with a 2nd lien on the property.
Find the best lowest rates second mortgage loans on our site and apply online!
Home Equity Loan Tips
A home equity loan, also known as a HEL or a second mortgage, is a loan in which a borrower leverages the equity in a home. In other words, a home is used as collateral. With a second mortgage, borrowers receive a lump sum of money at closing. The amount of money owners can borrow depends on certain factors, including income, credit history, the amount of equity the borrower has, and others. Generally, it's a big sum of money that can be used for a variety of reasons from financing college education and medical bills to house repairs.
Looking for a way to borrow a large amount of money for home repairs, a child's college education or medical bills? If you have your own home and some equity in your property, then a home equity loan can be your excellent choice! They are specially designed to serve many different purposes from education to debt consolidation. If you don't own property, borrowing such large amounts can be very expensive. Home equity loans let you enjoy beneficial interest rates, longer repayment terms, and more affordable monthly repayments.
After you choose the lender of your future home equity loan (HEL) online, it is necessary to decide whether you are going to get a fixed or variable rate. Let us look at the option of a home equity fixed loan.
A fixed rate equity loan is remarkable for having the fixed interest rate for the life of a loan. Many people find fixed interest mortgages easier to cope with, this is why nearly 75% of all HELs used by consumers have fixed interest rate.
Need money to pay for medical bills? Want to invest in retirement property? Or don't know how to give your children a proper education? Take advantage from the equity in your home. Apply for a home equity loan and make your projects come true!
A home equity loan, or HEL, is a type of second mortgage. It allows you to borrow money by pledging your house as collateral. You will receive a single lump sum. The payment and interest rate will typically remain the same during the life of your loan.
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