Home equity loans

Home equity is the amount of value you currently own in your home. It’s calculated by subtracting the unpaid balance of your mortgage(s) from your home’s current market value.

Both are based on the equity in your home. However, a home equity loan offers a lump sum payment, a fixed interest rate, and fixed monthly repayment amounts, while a HELOC is a revolving form of credit similar to a credit card. You can draw down against a total approved amount, repay, and then borrow what you’ve paid off again.

Generally, a home equity line of credit is a good choice if you aren't sure exactly how much money you may need and over what period of time you'll need it. A home equity loan, on the other hand, is ideal if you want access to a one-time lump sum of money and more predictable repayment terms. Get in touch with a Webster banker today for help choosing the right product for you.

A home equity loan can help you fund important goals and, because it is secured by your home, interest rates tend to be lower compared to credit cards or unsecured personal loans. Home equity loans have fixed interest rates, predictable monthly payments, and relatively long repayment timelines.

However, because your home is collateral for the loan, you could lose your home if you’re unable to make your payments. And if the value of your home decreases, you could end up owing more than the house is worth.