$25,000 home equity loan vs. $25,000 HELOC: Which will be cheaper this May?
Summary
Homeowners looking to borrow $25,000 against their home's equity have two main loan options: home equity loans and home equity lines of credit (HELOCs). As of May, both have similar monthly payments, but HELOC interest rates can change over time, while home equity loans have fixed rates.Key Facts
- The average home equity loan interest rate is about 6.95% in May.
- The average HELOC interest rate is about 7.11% in May.
- A $25,000 home equity loan payment is roughly $289.63 per month for 10 years.
- A $25,000 HELOC payment is about $291.69 per month for 10 years, assuming full repayment starts immediately.
- Interest rates for both home equity loans and HELOCs have decreased compared to late 2025.
- HELOCs have variable rates, meaning monthly payments can rise or fall in the future.
- Home equity loans have fixed rates, so payments remain steady over time.
- Shopping around can help borrowers find better rates and terms.
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