Hel vs Heloc banner

Home Equity Loans (HELs) and Home Equity Lines of Credit (HELOCs) are both ways homeowners can borrow against the value they own outright in their residential property. While these options aren’t to be used frivolously, they can be an excellent way to cover major expenses like an addition to your home, a once-in-a-lifetime event like a wedding or to consolidate debts in other areas of your financial life.

Working with a mortgage and home equity expert can guide you to the solution that’s most cost-effective for your financial future. At Bethpage, we can help inform you about the differences between home equity products before you decide on a HEL or a HELOC.

Before deciding between the two major types of home equity products, it is important to know what makes the two options distinct:

Home Equity Loan HELOC
  • A HEL allows you to borrow one large amount all at once.
  • With a HELOC, money is dispersed as you need it, much like a credit card.
  • Interest
  • Repaying a HEL, you’re provided with fixed rates and fixed monthly payments. Therefore, you always know what your monthly payment will be.
  • Interest is generally a lower variable rate, but could change at any time based on prime. Monthly payments vary based on how much you borrow and the current interest rate.
  • Length
  • You can select a term of 5, 10, 15, 20 or 30 years.
  • HELOC customers can draw down on their home equity over 10 years, with 20 years to repay the amount.
  • Differences
  • These are ideal when you have a specific project or purpose for the loan, like an event or major financial undertaking.
  • These are suitable for when you are not sure how much you will need to borrow for a project.
  • Contact Bethpage Federal Credit Union today to view current rates and learn more about how you can access the equity in your home to complete a project. Our experts are experienced in guiding clients through the process.