Home Equity Loans: Fixed-Rate Cash Backed by Your Home
A home equity loan lets you borrow a lump sum against your home’s equity and repay it in predictable monthly payments. If you want stability—one rate, one payment, one payoff timeline—this is often the simplest home-equity option to understand.
This page helps you decide if a home equity loan fits your situation, what lenders typically look for, and how to compare offers without missing the details that quietly change the true cost. If you’re still not sure how much equity you can access, start with the Home Equity Checker on our homepage, then come back here to compare fixed-loan trade-offs.
Disclosure: We may earn a commission if you choose a lender through affiliate links or partner placements. We still aim to explain options fairly.
Fixed-rate confidence
Many home equity loans come with a fixed interest rate, which makes long-term planning easier and reduces payment surprises.
Simple lump-sum funding
You receive the money once and begin repayment—great for a single purpose like a remodel, tuition, or consolidating debt.
Use equity strategically
When used thoughtfully, a fixed equity loan can reduce higher-interest balances or fund improvements that support home value.
Home Equity Loan vs HELOC vs Cash-Out Refinance
A home equity loan is usually easiest to compare because it behaves like a traditional installment loan. A HELOC behaves more like a credit card backed by your home: you draw funds as needed and your rate may vary. Cash-out refinance is different—it replaces your existing mortgage and can change your payment, term, and long-run interest cost.
| Option | How you get funds | What it feels like |
|---|---|---|
| Home Equity Loan | Lump sum at closing | Fixed monthly payment (often fixed rate) |
| HELOC | Draw funds over time | Flexible access; payment can fluctuate |
| Cash-Out Refi | New mortgage replaces old one | One loan; may reset term and costs |
Practical tip: If your goal is “one-time expense + predictable payment,” home equity loans are often the cleanest match. If your goal is “access over time,” start at the HELOC page.
Eligibility: What Lenders Typically Evaluate
Each lender is different, but most look at a consistent set of signals to decide how much you can borrow and at what price. Use this list as a pre-check before requesting offers.
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Equity & combined LTV
Many lenders prefer a cushion of equity after adding your new loan.
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Income & debt-to-income
Stable income and manageable monthly obligations can improve pricing.
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Credit profile
Credit score, payment history, and recent inquiries can affect approval and rate.
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Property type & occupancy
Primary residence is often easiest; condos/investment properties may be treated differently.
“Offer-Ready” Checklist (What to Compare)
If two offers look similar, the differences are usually hiding in the fine print. When you compare home equity loan offers, look at: APR (not just interest rate), closing costs, origination fees, prepayment rules, and whether the lender requires automatic payments for the best pricing.
Your goal matters too. If you’re consolidating debt, a fixed payment can be ideal—just be sure you’re not replacing short-term debt with a longer, more expensive payoff horizon. If you’re renovating, check whether the lender allows you to choose a term that aligns with your budget and timeline.
Reminder: borrowing against your home has risk—missed payments can put the home at risk of foreclosure.
Quick FAQ
Is a home equity loan the same as a second mortgage?
Often, yes. A home equity loan is commonly structured as a second lien behind your primary mortgage.
How fast can it fund?
Funding timelines vary by lender, appraisal needs, and documentation. Planning ahead helps you avoid rush decisions.
Should I choose a HELOC instead?
If you want to draw funds over time or keep a reserve available, a HELOC may fit better than a lump-sum loan.
Looking for the broader picture? Use the Home Equity Calculator and then compare options side-by-side.