| Credit Score | Rate Range | Monthly Payment ($50K, 15yr) | Total Interest |
|---|---|---|---|
| Excellent (760+) | 7.50–8.50% | $463–$492 | $33,300–$38,600 |
| Good (700–759) | 8.50–9.50% | $492–$522 | $38,600–$43,900 |
| Fair (640–699) | 9.50–10.50% | $522–$552 | $43,900–$49,300 |
| Below avg (580–639) | 10.50–12.00% | $552–$600 | $49,300–$58,000 |
| Feature | Home Equity Loan | HELOC |
|---|---|---|
| Rate type | Fixed | Variable |
| Disbursement | Lump sum upfront | Draw as needed (credit line) |
| Payment | Fixed monthly | Interest-only during draw period |
| Initial rate | 7.5–10.5% | 6.5–9.5% (lower initially) |
| Rate risk | None (fixed) | Can increase significantly |
| Best for | One-time projects, debt consolidation | Ongoing expenses, flexible needs |
| Closing costs | 2–5% | 0–3% (often lower) |
Typical closing costs on a home equity loan include: appraisal ($300–$500), origination fee (0.5–1% of loan amount), title search ($100–$250), title insurance ($200–$600 on larger loans), recording fee ($50–$150), attorney or document preparation fee ($200–$500), and credit report fee ($30–$50). On a $75,000 loan, total closing costs are typically $2,000–$4,000. Some lenders waive some or all closing costs in exchange for a slightly higher interest rate or a minimum loan term commitment. Always compare the total cost of both options over your expected loan duration.
A home equity loan makes sense when: you need a specific lump sum for a defined purpose, you want predictable fixed payments, current rates are reasonable relative to alternatives, and you have stable income to make payments for the full term. It does not make sense when: you might need to sell your home soon (closing costs eat into value), your income is uncertain, you are already carrying significant debt, or you would be borrowing above 85% LTV. A personal loan or 0% APR credit card may be better for smaller amounts under $15,000–$20,000 where closing costs make a home equity loan less economical.