Borrowing home equity, whether it be via a home equity loan or home equity line of credit (HELOC) is a simple and effective way for homeowners to make ends meet. But they won't be able to withdraw all of their accumulated equity as many lenders require a 20% threshold to be kept in the home as a buffer. 

In today's economic climate, however, this is hardly an obstacle for the average homeowner with equity levels in the country sitting at a record high. There's around $11 trillion in equity that's considered borrowable by homeowners now, according to a March report. So, withdrawing a large, six-figure amount like $100,000 should be relatively easy. And with interest rates on home equity loans and HELOCs considerably lower than they were in recent years, this is also one of your cheapest ways to not only borrow equity but also to borrow money overall.

Still, your home does function as collateral in these exchanges, so it's critical that you go into the process clear-eyed and informed, particularly about the costs you'll be expected to repay each month. Between a $100,000 home equity loan and a $100,000 HELOC, then, which will have the cheaper monthly payments now? Below, we'll crunch the numbers homeowners need to know.

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$100,000 home equity loan vs. $100,000 HELOC: Which has the cheaper monthly payments now?

It's simple to calculate the costs of a home equity loan because the product has a fixed interest rate that will remain the same unless refinanced. A HELOC, however, has a variable rate that will change over time. Another thing to note: interest-only payments will typically be required for the HELOC's initial, 10-year draw period, while the home equity loan will be delivered in a lump sum and, thus, payments on the full loan will be expected to be made immediately. 

Here's how much each will cost monthly now, tied to two common repayment periods and the assumption that both products are fully used and then repaid (and that the HELOC rate remains constant):

$100,000 home equity loans

• 10-year home equity loan at 6.96%: $1,159.02 per month
• 15-year home equity loan at 6.96%: $896.59 per month

$100,000 HELOCs

• 10-year HELOC at 7.11%: $1,166.76 per month
• 15-year HELOC at 7.11%: $904.99 per month

For reference, here's what both cost in September 2025:

$100,000 home equity loans

• 10-year home equity loan at 8.43%: $1,236.12 per month
• 15-year home equity loan at 8.31%: $973.63 per month

$100,000 HELOCs

• 10-year HELOC at 8.05%: $1,215.92 per month
• 15-year HELOC at 8.05%: $958.54 per month

And here's how much more expensive each was earlier that year:

$100,000 home equity loans

• 10-year home equity loan at 8.57%: $1,243.60 per month
• 15-year home equity loan at 8.52%: $985.91 per month

$100,000 HELOCs

• 10-year HELOC at 8.26%: $1,227.06 per month
• 15-year HELOC at 8.26%: $970.72 per month

So, even though the calculations above require some speculating, the trajectory here is still clear – the costs of borrowing with a home equity loan or HELOC are clearly declining. And that makes the benefits of borrowing a six-figure sum, such as $100,000, stronger, as borrowers will gain access to a large amount of money while still having manageable repayment costs. 

That noted, prospective HELOC borrowers should also preemptively calculate their costs against rates that are both higher and lower than the averages noted here, as the HELOC rate can change monthly and will almost certainly change over a multi-year repayment period.

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The bottom line

This spring, a $100,000 home equity loan has cheaper monthly payments than a $100,000 HELOC. But the difference between the two isn't stark, and if rates decline again later this year, the HELOC could actually become the more cost-effective option. Evaluate both carefully before getting started, and diligently shop for rates and lenders online, as you don't need to use the same lender that holds your mortgage to borrow equity, nor should you if you can find better rates and terms elsewhere.