Updated July 2, 2026
What actually decides this
It isn't really the rate, it's your timeline. A HELOC and a fixed home equity loan can borrow the identical $60,000, but one locks a rate for fifteen years and the other doesn't. At today's averages the HELOC edges out the fixed loan by about $23 a month and roughly $4,027 in total interest, yet that gap can flip the moment the prime rate ticks up, while the fixed loan's number never moves at all.
Three questions worth asking before you compare a single rate
- How long will this balance actually exist? A two-year payoff barely feels a rate move. A fifteen-year one feels every basis point.
- Do you need to draw more than once? A home equity loan hands you the full amount on day one and that's it. A HELOC lets you redraw as you repay, which is the whole point of a revolving line.
- Can your budget absorb a worse-case payment? Run the HELOC rate a point or two higher in the fields above; if the new payment would strain you, the fixed loan's certainty is worth more than its slightly higher starting cost.
Bankrate's weekly lender surveys are the source for both default rates above, and that 65-basis-point gap between them is unusually narrow by historical standards, so treat either average as a starting point rather than your actual quote.
FAQs
What is the main difference between a HELOC and a home equity loan?
A home equity loan is a single lump sum at a fixed rate, so the payment is set the day you sign. A HELOC is a revolving line at a variable rate, so you draw as needed and the payment can shift with the index. The CFPB describes these as the two standard ways to borrow against home equity.
Why does the HELOC win by $4,027 in this specific example?
At the default rates, 7.47% versus 8.12%, the HELOC's lower rate outweighs the fact that both are amortized the same way here. Narrow that rate gap, or flip which one is higher, and the winner in the results panel changes with it.
Should I pick fixed or variable?
Favor fixed if you want one number for the life of the debt and plan to carry the balance for years. Favor variable if you'll likely repay quickly or think rates are more likely to fall than rise from here.
Are these numbers final?
No. They're planning estimates built from national averages, not a loan offer. Your real quote depends on your lender, your credit profile, and any caps written into the specific product.
Not sure how much to borrow?
Check your available equity before you commit to either option.