Home Equity Unlock Advisor
Discover how much equity you can access and get a personalized recommendation for the best way to tap it based on your specific goals.
Your credit score affects the interest rates you qualify for. Check yours free at annualcreditreport.com.
Select all that apply. Your intended use helps us recommend the best product type.
Faster funding options may have different product recommendations. HELOCs typically fund fastest.
Your Home Equity
$230,000
42% equity in your home
80% CLTV
$120,000
85% CLTV
$147,500
90% CLTV
$175,000
Recommended: HELOC
A HELOC gives you flexible access to funds with low initial payments. You only pay interest on what you draw, making it ideal for projects where costs come in stages.
Estimated Rate
8.5%
Monthly Payment
$354
Interest-only during draw period
Pros:
Interest-only during draw period
Only pay on what you use
Reusable credit line
Low closing costs
Cons:
Variable rate
Payment increases after draw period
Requires discipline
Estimated Rate
8.0%
Monthly Payment
$478
Pros:
Fixed rate & payment
Predictable budgeting
Lump sum disbursement
Cons:
Higher rate than HELOC draw period
Less flexibility
Moderate closing costs
Estimated Rate
6.8%
Monthly Payment
$2,400
Pros:
Single payment
Potentially lower rate
Large amounts available
Cons:
Closing costs: $9,250
Resets mortgage term
Slow process
Understanding Your Home Equity Options
American homeowners hold a record $32+ trillion in home equity, yet many don't know how to access it — or which product is the best fit. Whether you're renovating your kitchen, consolidating credit card debt, funding a child's education, or buying an investment property, the right equity product can save you thousands in interest compared to alternatives like personal loans or credit cards.
The 3 Main Ways to Access Home Equity:
HELOC (Home Equity Line of Credit)
- How it works: Revolving credit line you draw from as needed during a 5-10 year draw period
- Rate: Variable (prime + margin), typically 7-10%
- Best for: Ongoing projects, flexibility, uncertain costs, debt consolidation
- Pros: Only pay interest on what you use, flexible access, interest-only during draw period
- Cons: Variable rate risk, payment shock when draw period ends
Home Equity Loan (HEL)
- How it works: Lump-sum loan with fixed monthly payments over 5-30 years
- Rate: Fixed, typically 7-12%
- Best for: One-time expenses, predictable budgets, large renovations
- Pros: Fixed rate certainty, predictable payments, lump sum for large projects
- Cons: Higher initial rate than HELOC, no flexibility to draw more later
Cash-Out Refinance
- How it works: Replace your existing mortgage with a larger one and pocket the difference
- Rate: Fixed, typically 6-8% (same as mortgage rates)
- Best for: Large amounts, if current rate is high, consolidating first + second mortgage
- Pros: Potentially lowest rate, single payment, long repayment term
- Cons: Restarts your mortgage amortization, higher closing costs (2-5%), loses your existing low rate
How Much Equity Can You Access?
Most lenders allow a Combined Loan-to-Value (CLTV) of 80-90%, meaning you can borrow up to 80-90% of your home's value minus your existing mortgage balance. For example, a $500,000 home with a $300,000 mortgage at 80% CLTV gives you up to $100,000 in accessible equity. Some programs allow up to 90% CLTV for borrowers with excellent credit (740+).
Pro Tip: Protect Your Low Mortgage Rate
If you locked in a mortgage rate below 5% during 2020-2022, a cash-out refinance would replace that rate with today's higher rates — costing you hundreds per month on your existing balance. In this scenario, a HELOC or Home Equity Loan is almost always the smarter choice because it keeps your low first mortgage intact. You only pay the higher rate on the new money borrowed, not your entire mortgage balance.
Important: Tax Deductibility Rules
Home equity interest is only tax-deductible if the funds are used to "buy, build, or substantially improve" your home (per the 2017 Tax Cuts and Jobs Act). Using a HELOC for a kitchen renovation? The interest is deductible. Using it for debt consolidation or college tuition? The interest is not deductible. This distinction can significantly affect your true cost of borrowing. Consult a tax professional for your specific situation.
Related Equity Tools:
- HELOC Calculator — Calculate your HELOC payments during draw and repayment periods.
- Home Equity Calculator — Discover how much equity you have and visualize growth over time.
- Refinance vs. HELOC — Side-by-side comparison of cash-out refinance and HELOC.
- Debt Consolidation Calculator — See how much you save consolidating high-interest debt into a HELOC.
- Deal Analyzer — Thinking of using equity to buy an investment property? Score the deal first.
Ready to Unlock Your Equity?
Connect with an equity specialist who can help you choose the right product and get the best rate for your situation. Fast approvals for HELOCs and DSCR loans.