A lump-sum loan secured by your home equity, with a fixed interest rate and fixed monthly payments.
Full Definition
A home equity loan lets you borrow against the equity you've built in your home. Unlike a HELOC, you receive all funds at once and repay them in fixed monthly installments at a fixed interest rate over 5–30 years. Because the rate and payment are fixed, budgeting is straightforward. Home equity loans are second mortgages — your primary mortgage remains in place. Common uses include major home renovations, education costs, and large purchases. The combined loan-to-value (CLTV) ratio — your primary mortgage plus the new loan — typically can't exceed 80–85% of your home's appraised value.
Related Terms
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