Which Is Better? Home Equity Loan vs HELOC Explained for 2026 homeowners
Why Spring Is a Great Time to Use Your Home Equity
Your home is more than just a place to live – it’s the foundation for your biggest dreams and one of your most valuable assets. As you build home equity, you’re creating a ripple that can turn into a major wave of opportunity. Whether you’re ready to renovate, consolidate debt, or fund a life-changing milestone, RadiFi is here to guide you through the best pathways to empower your life.
Choosing Your Path: HELOC vs Home Equity Loan Comparison
Spring is a popular time for homeowners to begin home improvement projects, consolidate debt, or plan for major expenses throughout the year. As home values increase and equity grows, many homeowners explore financing options like home equity loans or home equity lines of credit (HELOCs).
These financing options can help provide funds for renovations, unexpected expenses, or other financial goals while potentially offering lower interest rates than many unsecured borrowing options.
In this article, we’ll explain how each option works, when each makes sense, and how homeowners can secure their home equity loan with RadiFi Credit Union.
Home Equity Loan vs HELOC
The main difference between a home equity loan and a HELOC is how the funds are provided and how the interest rate works.
- Home Equity Loan: Funds are disbursed as a lump sum with a fixed interest rate and predictable monthly payments.
- HELOC (home equity line of credit): Provides a revolving line of credit you can borrow from as needed, usually with a variable interest rate. Home equity loans are typically best for large, one-time expenses, while HELOCs are ideal for ongoing or flexible spending needs.
What Is a Home Equity Loan?
A home equity loan allows homeowners to borrow against the equity they’ve built in their home and receive the funds as a single, lump sum.
The loan is repaid through fixed, monthly payments with a fixed-interest rate, making it one of the most predictable financing options available.
Many homeowners prefer this option because it provides stability and clear budgeting.
What are the Key Features of Home Equity Loans?
- Fixed interest rate
- Lump-sum funding
- Predictable monthly payments
- Terms up to 20 years
- Secured by your home’s equity
At RadiFi Credit Union, homeowners may be able to borrow up to 90% of their home’s value, or up to 95% for home improvement projects, depending on qualifications.
Loan amounts typically range from $10,000 to $250,000, making home equity loans flexible enough for both small and large financial needs.
What Is a HELOC?
A home equity line of credit (HELOC) works more like a credit card. Instead of receiving the full loan upfront, you’re approved for a revolving credit line that you can draw from when needed.
HELOC borrowers only pay interest on the amount they borrow.
What are the Key Features of a Home Equity Line of Credit (HELOC)?
- Revolving credit line
- Borrow funds as needed
- Variable interest rates
- Flexible payment structure
- Long borrowing window
At RadiFi Credit Union, HELOCs feature an 8-year draw period, followed by a 12 year repayment period – giving homeowners extended flexibility to achieve their goals.
Pick Your Path to Accessing Your Home Equity
When a Home Equity Loan from a Credit Union Is the Better Choice
A home equity loan is often the best choice when you know the total cost of a project upfront.
How Can I Use My Home Equity Loan?
- Home renovations
- Debt consolidation
- Medical expenses
- Education expenses
Because payments stay consistent, many homeowners prefer a home equity loan for long-term financial planning.
When a HELOC Makes More Sense
A HELOC is typically better when the amount needed may change over time.
How Can I Use My Home Equity Line of Credit (HELOC)?
- Multi-phase home renovations
- Emergency financial backup
- Tuition funding, spread over several years
- Major life events or expenses
Since you only borrow what you need, home equity lines of credit (HELOCs) offer flexibility that homeowners find valuable.
Experience the RadiFi Difference: Bold Banking for Homeowners
Since 1935, we’ve been your trusted neighborhood credit union in Northeast Florida. We aren’t “another big bank”. We’re a not-for-profit financial cooperative owned by members like you, FOR members like you.
Why members love making waves with us:
- Up to $500 Closing Cost Credit*. We help you keep more of your money with a credit toward closing costs on home equity products.
- Relationship Discounts. Active checking members with direct deposit can receive a 0.25% APR* discount on their loan rate.
- Local Decisions. Our lending decisions are made right here in our community, ensuring faster approvals and personalized guidance.
- People-Centered Service. We’re committed to a people-first mentality. Partnering with our members at every life event and milestone to make waves in the next step of their financial journey.
Ready to Access Your Home’s Equity?
Your home’s equity is ready to help you live vibrantly. Whether you’re planning that spring home improvement project or just need to catch up on some unexpected expenses, we’re here to help you grow.
RadiFi Credit Union is proud to serve homeowners exploring home equity loans in Florida and Southern Georgia with competitive rates, flexible terms, and personalized service.
Frequently Asked Questions about Home Equity Loans and Lines of Credit (HELOC)
A home equity loan is typically better for one-time expenses because it offers fixed rates and predictable monthly payments. A HELOC is better for flexible or ongoing expenses because it allows you to borrow gradually.
A home equity loan provides a lump sum with fixed payments, while a HELOC provides a revolving credit line you can borrow from as needed.
Many lenders allow homeowners to borrow 80–90% of their home’s value minus the remaining mortgage balance, depending on qualifications.
You can use your home’s equity to fund:
- Home improvements or repairs
- Debt consolidation
- Education expenses
- Major purchases or life events
- Emergency expenses
- And more!
It’s your equity—use it your way.
RadiFi Credit Union offers home equity loans and HELOCs for qualified homeowners in Florida and Southern Georgia.
Nope! You can apply for a home equity loan or HELOC with RadiFi even if your first mortgage is with another lender. Apply Online Now.
Yes—but it’s easy to join! If you live, work, worship, or attend school in Duval, Clay, St. Johns, Nassau or Baker County, FL—or just about anywhere in the U.S. through our partnership with the American Consumer Council—you’re eligible.
Fixed Rate Home Equity Loan Rates
|
Purpose/Limitations |
Term (Years) |
Rate |
Pre-Paid Finance Charge2 |
APR2 |
P&I Payment3 |
|---|---|---|---|---|---|
|
1 When a paid-off home is on your horizon, our Fixed-Rate First Lien Home Equity Loan will get you there fast! The minimum loan amount is $50,000, Maximum amount is $250,000. Enjoy our quick turnaround, and up to $500 credit toward closing costs. Loan amounts over $150,000 require a full appraisal. The example is based on a $25,000 loan balance over 10 years. 2 Prepaid Finance Charges paid by the member and affect the Annual Percentage Rate. 3 Escrow for taxes and insurance may be needed and are not included in the principal and interest (P&I) payment amount shown above. 4 Cash-out is limited to $2,000. APR = Annual Percentage Rate. The listed APRs are effective as of 4/1/2026 and are subject to change at any time without notice. Your rate may be higher than the stated APR. Rates are based on creditworthiness, loan-to-value, and other criteria. |
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|
Purpose/Limitations Refinance – No Cash Out4 |
Term (Years) 10 |
Rate 5.75% |
Pre-Paid Finance Charge2 $543.86 |
APR2 6.23% |
P&I Payment3 $274.42 |
|
Purpose/Limitations Cash Out |
Term (Years) 10 |
Rate 6.00% |
Pre-Paid Finance Charge2 $547.05 |
APR2 6.48% |
P&I Payment3 $277.55 |
|
Term (Years) |
Rate |
Pre-Paid Finance Charge2 |
APR2 |
P&I Payment3 |
|---|---|---|---|---|
|
1 Fixed Rate, up to 95% loan to value ratio (LTV) for home improvement. Great rates and multiple term options are available with approved credit. The example is based on a $25,000 loan balance. Displayed rate for borrowers with excellent credit. Don’t worry, other rates and terms are available. Up to $500 credit toward closing costs available. 2 Prepaid Finance Charges paid by the member. Annual Percentage Rate shows effect of pre-paid finance charges on the rate. 3Principal and Interest (P&I) together equal the payment amount. APR = Annual Percentage Rate. APRs listed are effective as of 4/1/2026 and subject to change at any time without notice. Your rate may be higher than the stated APR. Rates are based on creditworthiness, loan-to-value, and other criteria. |
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|
Term (Years) 5 |
Rate 6.25% |
Pre-Paid Finance Charge2 $547.40 |
APR2 7.16% |
P&I Payment3 $486.23 |
|
Term (Years) 10 |
Rate 6.50% |
Pre-Paid Finance Charge2 $553.49 |
APR2 6.99% |
P&I Payment3 $283.87 |
|
Term (Years) 15 |
Rate 6.80% |
Pre-Paid Finance Charge2 $561.12 |
APR2 7.16% |
P&I Payment3 $221.92 |
|
Term (Years) 20 |
Rate 6.99% |
Pre-Paid Finance Charge2 $567.73 |
APR2 7.24% |
P&I Payment3 $193.67 |
|
Term (Years) |
Rate |
Pre-Paid Finance Charge2 |
APR2 |
P&I Payment3 |
|---|---|---|---|---|
|
1 Fixed Rate, up to 95% loan to value ratio (LTV) for home improvement. Great rates and multiple term options are available with approved credit. The example is based on a $25,000 loan balance. Displayed rate for borrowers with excellent credit. Don’t worry, other rates and terms are available. Up to $500 credit toward closing costs available. 2 Prepaid Finance Charges paid by the member. Annual Percentage Rate shows effect of pre-paid finance charges on the rate. 3 Principal and Interest (P&I) together equal the payment amount. APR = Annual Percentage Rate. APRs listed are effective as of 4/1/2026 and subject to change at any time without notice. Your rate may be higher than the stated APR. Rates are based on creditworthiness, loan-to-value, and other criteria. |
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|
Term (Years) 5 |
Rate 7.00% |
Pre-Paid Finance Charge2 $556.37 |
APR2 7.93% |
P&I Payment3 $495.03 |
|
Term (Years) 10 |
Rate 7.25% |
Pre-Paid Finance Charge2 $563.30 |
APR2 7.76% |
P&I Payment3 $293.50 |
|
Term (Years) 15 |
Rate 7.55% |
Pre-Paid Finance Charge2 $571.87 |
APR2 7.92% |
P&I Payment3 $232.46 |
|
Term (Years) 20 |
Rate 7.63% |
Pre-Paid Finance Charge2 $577.63 |
APR2 7.88% |
P&I Payment3 $203.39 |
|
Term (Years) |
Rate |
Pre-Paid Finance Charge2 |
APR2 |
P&I Payment3 |
|---|---|---|---|---|
|
1 Loans over $150,000 and/or loans with an LTV (Loan to Value) greater than 90% require a full appraisal. Fixed Rate, up to 95% loan to value ratio (LTV) for home improvement. Great rates and multiple term options are available with approved credit. The example is based on a $25,000 loan balance. Up to $500 credit toward closing costs available. 2 Prepaid Finance Charges paid by the member. Annual Percentage Rate shows effect of pre-paid finance charges on the rate. 3 Principal and Interest (P&I) together equal the payment amount. APR = Annual Percentage Rate. APRs listed are effective as of 4/1/2026 and subject to change at any time without notice. Your rate may be higher than the stated APR. Rates are based on creditworthiness, loan-to-value, and other criteria. |
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|
Term (Years) 5 |
Rate 8.25% |
Pre-Paid Finance Charge2 $571.53 |
APR2 9.21% |
P&I Payment3 $509.91 |
|
Term (Years) 10 |
Rate 8.50% |
Pre-Paid Finance Charge2 $580.08 |
APR2 9.03% |
P&I Payment3 $309.96 |
|
Term (Years) 15 |
Rate 8.80% |
Pre-Paid Finance Charge2 $590.35 |
APR2 9.20% |
P&I Payment3 $250.60 |
|
Term (Years) 20 |
Rate 8.99% |
Pre-Paid Finance Charge2 $599.42 |
APR2 9.26% |
P&I Payment3 $224.77 |
|
Loan Paid Off In |
% Of Closing Cost Reimbursed to RadiFi by the Borrower |
|---|---|
|
* All rates include up to $500 credit toward closing costs. However, reimbursement is required as a percentage of the fees if the loan is paid off in less than 3 years. Closing cost fees may range from $400 to $2,000 or more based on the size of your loan. These fees are shown on the addendum to your note. Here is a list of the standard closing cost fees. Flood Certification: $16.00
Higher appraisal fees may apply on a case-by-case basis. Full appraisals are needed for loans over $150,000 and for LTVs above 90%. Title Fees:
State of Florida Documentary Stamps: .0035 times the loan amount.
|
|
|
Loan Paid Off In Less than 12 Month |
% Of Closing Cost Reimbursed to RadiFi by the Borrower 100% |
|
Loan Paid Off In Less than 24 Months |
% Of Closing Cost Reimbursed to RadiFi by the Borrower 50% |
|
Loan Paid Off In Less than 36 Months |
% Of Closing Cost Reimbursed to RadiFi by the Borrower 25% |
HOME EQUITY LINE OF CREDIT (HELOCs)
|
Loan to Value Ratio |
Index Rate4 |
Margin |
Index Plus Margin |
APR2 |
|---|---|---|---|---|
|
¹ We offer a quick turnaround, up to $500 credit toward closing costs, an Annual Rate Cap2 that provides extra peace of mind, 8-year Draw Period, Low Margins over the Index Rate. Make sure to use your line of credit as inactivity fees3 apply!
2 Annual Percentage Rate. 3 $50 annual inactivity fee in January when prior YTD finance charges were less than $100. 4 Index: Variable rate subject to change annually based on prime rate as published in the WSJ (Wall Street Journal). Maximum rate is 15%, minimum rate is 3.25%. Maximum annual rate increase (Annual Cap) is 3% per year. Displayed rate for borrowers with excellent credit. Other rates and terms are available. The rate and APR are the same. The actual rate is the greater of the current index rate plus the margin or the minimum rate (floor). The minimum rate is 3.25%. Payment is amortized based on the remaining term on the loan and is recalculated after each advance and/or annual change to the index rate. For example, on a $25,000 loan, the monthly payment would be $191. APR = Annual Percentage Rate. APRs listed are effective as of 4/1/2026 and subject to change at any time without notice. Your rate may be higher than the stated APR. Rates are based on creditworthiness, loan-to-value, and other criteria. |
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|
Loan to Value Ratio 0-80% |
Index Rate4 6.75% |
Margin 0.00% |
Index Plus Margin 6.75% |
APR2 6.75% |
|
Loan to Value Ratio 81-90% |
Index Rate4 6.75% |
Margin 0.25% |
Index Plus Margin 7.00% |
APR2 7.00% |
|
Payment |
Remaining Term |
Time of Advance |
|---|---|---|
|
First liens may require escrow of taxes and insurance which will increase the payment amount. |
||
|
Payment $191 |
Remaining Term 20 Years |
Time of Advance At initial advance |
|
Payment $254 |
Remaining Term 12 Years |
Time of Advance End of draw period (max 8 years) |
|
Loan Paid Off In |
% Of Closing Cost Reimbursed to RadiFi by the Borrower |
|---|---|
|
* All rates include up to $500 credit toward closing costs. However, reimbursement is required as a percentage of the fees if the loan is paid off in less than 3 years. Closing cost fees may range from $400 to $2,000 or more based on the size of your loan. These fees are shown on the addendum to your note. Here is a list of the standard closing cost fees. Flood Certification: $16.00
Higher appraisal fees may apply on a case-by-case basis. Full appraisals are needed for loans over $150,000 and for LTVs above 90%. Title Fees:
State of Florida Documentary Stamps: .0035 times the loan amount.
|
|
|
Loan Paid Off In Less than 12 Month |
% Of Closing Cost Reimbursed to RadiFi by the Borrower 100% |
|
Loan Paid Off In Less than 24 Months |
% Of Closing Cost Reimbursed to RadiFi by the Borrower 50% |
|
Loan Paid Off In Less than 36 Months |
% Of Closing Cost Reimbursed to RadiFi by the Borrower 25% |
Ready to Unlock the Potential of Your Home’s Equity?
Our trusted team of local mortgage loan originators are standing by to answer all of your questions and help make the process a breeze.