A HELOC or fixed home equity loan lets you use equity without disturbing your first mortgage. The right tool when today's mortgage rates are higher than the rate you're already locked into.
No cash-out refi means your existing rate, term, and amortization stay intact.
HELOCs let you take what you need, when you need it — only pay interest on what you've drawn.
Home equity loans deliver a fixed lump sum at a fixed rate — simple, predictable, fully amortized.
Many HELOCs close in 14–21 days with reduced documentation versus a full refi.
The HELOC unlocks substantial flexibility while keeping a 3.25% first mortgage intact — the cheapest debt this household will ever have.
For illustration only. Numbers are hypothetical and don't represent an offer, rate lock, or guarantee. Actual rates, payments, fees, and qualification depend on your credit profile, the property, the lender, current market conditions, and required taxes & insurance. APR will differ from interest rate. 8Twelve Mortgage is an independent brokerage and arranges — but does not make — loans. Equal Housing Opportunity.
A HELOC is a credit card secured by your home — revolving, flexible, usually variable rate. A home equity loan is a fixed second mortgage — lump sum, fixed rate, fixed payment. Choose HELOC for flexibility and phased projects; choose home equity loan for predictability and one-time uses.
A typical HELOC has two phases. The draw period (usually 10 years) lets you borrow and repay flexibly, with interest-only minimum payments allowed. The repayment period (usually 20 years) closes the draw and converts the balance to a fully amortizing principal-plus-interest loan. The payment can jump meaningfully at the transition — plan for it.
If your first mortgage rate is meaningfully below today's market, doing a cash-out refi means giving up that rate on the entire balance. A HELOC keeps the great rate intact and prices only the new borrowed amount at today's market. On a $400k first mortgage at 3.5% with a $50k cash need, the HELOC almost always wins.
If you know the exact amount you need, want a fixed payment, and don't want to think about rate adjustments, a home equity loan is cleaner. It's also better psychologically for borrowers who'd be tempted to re-draw a HELOC instead of paying it down.
The strongest uses are ones that build or preserve wealth, not consume it. Renovations that raise the home's value. Debt consolidation of high-rate cards. A down payment on an income property. Bridge financing to buy the next home before selling the current one.
A HELOC is a revolving line of credit you can draw from over time, usually at a variable rate. A home equity loan is a fixed lump sum at a fixed rate. HELOCs are flexible; home equity loans are predictable.
Most HELOCs and home equity loans go up to 80–85% combined loan-to-value (your first mortgage plus the new line). Some programs reach 90% for very strong files. Subtract your current mortgage balance from that cap to find your available equity.
HELOC rates are typically variable, indexed to the Prime Rate plus a margin. Many HELOCs let you convert a portion to a fixed rate. Home equity loans are fully fixed.
A typical HELOC has a 10-year draw period (interest-only payments allowed) followed by a 20-year repayment period (principal + interest). Plan for the payment to step up when the repayment period begins.
Some do, some don't. Many lenders offer no-closing-cost HELOCs in exchange for a slightly higher margin. Home equity loans typically have closing costs similar to a small refi.
Yes — this is exactly when HELOCs and home equity loans shine. You keep your sub-4% first mortgage untouched and add a second lien for the equity you want to use.
A 3-minute application. Soft credit pull. A real rate from a broker shopping 50+ lenders for you.
