Loans · Home equity
Home equity loan vs HELOC.
A home equity loan pays out once at a fixed rate and amortizes from the first payment. A HELOC usually charges interest only during a draw period and then amortizes, often at a variable rate. Enter the terms from your two quotes and see the monthly payment, the peak payment and the total cost side by side.
The loan payment stays level. The HELOC starts lower, then jumps when repayment begins, and moves with the rate if the rate is variable. This shows how big that jump is and what each option costs in interest and fees over its life.
Inputs
Side by side
Fill the form and press Compare.
How the numbers are worked out
Monthly rate = annual rate ÷ 12. Your lender may compound differently, so treat the results as a close estimate.
Home equity loan. Level payment P = L × i ÷ (1 − (1 + i)−n), where L is the amount, i the monthly rate and n the number of months. Total interest is the sum of each month's balance × i.
HELOC. The full amount is assumed drawn on day one so both products borrow the same sum. During the draw period the payment is the balance × the current monthly rate. In the repayment period the remaining balance is amortized over the months left at the current rate, so every rate change re-sets the payment. The two HELOC columns use the same terms; only the rate path differs.
Rate path. Starting rate plus your step every chosen number of months, capped at your ceiling if you set one and never below zero. It is an assumption you control, not a forecast.
Fees. Closing fees are added once. The HELOC annual fee is charged for every year of its full life. Total cost = interest + fees. No rates, fees or limits are supplied by this tool: use the figures on your own loan estimate and HELOC agreement.
The two products can have different lifetimes, so compare total cost alongside the payments. This tool does not model partial draws, re-borrowing during the draw period, interest-rate floors, tax treatment, or lender rate-conversion options.
Frequently asked questions
Why does the HELOC payment jump?
During the draw period you typically pay interest only, so the balance does not fall. When repayment starts, the same balance has to be paid off over a shorter remaining time, so the payment steps up. The peak payment row shows the highest payment on the path you entered.
What rate path should I enter?
Use the starting rate and any cap from your HELOC agreement, then test a few steps (for example +0.50, 0, and a drop). If the answer only works when the rate never moves, that is worth knowing before you sign.
Does this include what I would actually be offered?
No. It has no lender data. Every rate and fee is what you type in, taken from your own quotes.
How is this different from the single-loan and HELOC calculators?
Those model one product. This one puts a fixed loan, a flat-rate HELOC and a stepped-rate HELOC next to each other on the same amount.
Estimate only — confirm with your lender
This tool illustrates arithmetic on the figures you enter. It is not lending, tax or financial advice, and it does not know your lender's terms. Confirm payments, rate adjustments, caps and fees in your loan estimate and HELOC agreement. Your home secures either loan.