Home Equity Loans and Lines—What’s the Difference?

Equity refers to the value of your home minus any owed mortgage balance. This equity can be used in the form of a line of credit or loan to fund home improvements, college tuition, loan consolidation, medical bills, and other expenses.

A Home Equity Loan allows you to borrow a set amount against the equity in your home in one lump sum that you pay back in regular monthly loan payments over a specific repayment term. A fixed term home equity loan is ideal when making a one-term investment, such as a kitchen remodel or consolidation of higher interest debt.

A Home Equity Line of Credit (HELOC) allows you to borrow up to a certain percentage of your equity and enjoy repeat access to those funds as you pay them back. The revolving nature of a HELOC makes it a perfect safety net for emergencies and large recurring expenses, such as college tuition. Because the loan is secured against your house, the interest rate is typically lower than traditional loans or credit cards.

Steve D., who joined Consumers in 2007, used a home equity loan to pay off his student loans. How could you put the equity in your home to work for you?

With no closing costs and variable rates as low as .99% APR* the first six months on new home equity lines of credit and as low as 3.25% APR thereafter, could a HELOC benefit you? Visit ConsumersCU.org/Loans/HELOC or call us at 800.991.2221 to learn more.

*This promotional, introductory Annual Percentage Rate (APR) applies only to new HELOCs. Rate is effective as of June 10, 2013. The introductory APR will convert to a variable rate after the first six monthly billing cycles. The variable APR can range from 3.25% – 18.00% APR. All loans subject to approval. Rates, terms, and conditions are subject to change and may vary based on creditworthiness, qualifications, and collateral conditions. Early termination fee of $300 if closed within first 24 months. Other restrictions may apply.

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