Home Equity Loan Terms

What are the terms, rates, and maturity amounts of a home equity loan?

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The terms of a home equity loan (HEL) are usually akin to a simple fixed-interest loan. A HEL is characterized by the following:

  • The amount you can borrow is usually 85% of the home equity.

  • The loan proceeds are paid out in a lump sum.  

  • A loan term can be 5–20 years.

  • The interest rate is fixed throughout the loan's lifespan.

  • The loan is amortized over its lifespan with regular, same-value payments. These payments pay for both the interest and principal of the loan.

A home equity loan is a second mortgage, so you’ll be charged again for application fees, closing fees, etc. The interest rate on a home equity loan is determined by:

  • Market conditions

  • Loan term

  • Loan Amount

  • Your credit score and income

  • Value of your home

  • Loan to value ratio of your home

If you’d like more information on what the terms of a home equity loan would look like, fill out the form below and a home.loans specialist will contact you.