Home equity loan
A fixed-rate second mortgage that gives you a lump sum against your equity, repaid in equal installments over a set term.
What does home equity loan mean?
A home equity loan is a fixed-rate second mortgage: you borrow a lump sum against your equity and repay it in equal installments over a set term. Unlike a HELOC variable, revolving line, the rate and payment are locked, which makes it the cleaner choice for a one-time expense with a known price tag — a single renovation, say, or consolidating a fixed amount of debt.
Frequently asked
How does a home equity loan work?
You borrow a lump sum against your equity as a fixed-rate second mortgage and repay it in equal monthly installments over a set term, on top of your first mortgage.
The rate and payment are locked, so the cost is predictable from day one.
How much can I borrow with a home equity loan?
Usually enough to bring your combined loan-to-value (all mortgages ÷ home value) up to about 80–85%. On a $400,000 home with a $250,000 first mortgage, an 85% CLTV cap leaves roughly $90,000 of borrowable equity.
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