Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes. A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home’s value and pay that amount back in monthly installments.

Both home equity lines of credit (HELOCs) and home equity loans are up in numbers, their originations rising in Q3 2024 by 6 and 8 percent, respectively. HELOC balances are bigger, too: They climbed in Q4 of last year, marking the 11th quarter in a row of growth.

But which will be better to open in the new month, a HELOC or a home equity loan? The answer to this question may be less clear than prospective borrowers would like. Below, we'll detail when either would be preferable. Start by seeing how much home equity you could potentially borrow here.