Borrowing money, no matter the funding source, should always be done strategically. But when the funding source is your own home, it must be done with precision. After all, if you're ultimately unable to repay a home equity loan or home equity line of credit (HELOC), you could lose your home to the lender in a foreclosure. And the chances of having trouble making your repayments rise the more you borrow from your home. To avoid this situation, then, it helps to start by calculating your potential repayment costs.

This can be difficult to do with home equity loans and HELOCs since they have different rate structures and repayment requirements. But it can be done, approximately, and it should be done when borrowing home equity, particularly a large, six-figure sum like $100,000. In today's economic climate, then, with inflation concerns stubborn and interest rates only slightly cooler, which will be cheaper to borrow: a $100,000 home equity loan or a $100,000 HELOC? Below, we'll do the math.

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$100,000 home equity loan vs. $100,000 HELOC: Which is cheaper now?

To determine the repayment costs of borrowing $100,000 worth of home equity via either of these options, homeowners will need three primary figures: the amount of money, the interest rate and the length of the repayment period. That noted, HELOC rates, while slightly lower than home equity loans as of mid-June 2025, are variable, meaning that they'll change monthly for borrowers, perhaps to a significant degree depending on market conditions. So, the HELOC rate here assumes a consistency that is unlikely to replicate itself when borrowing. Here's what both would cost borrowers right now:

• $100,000 10-year home equity loan at 8.25%: $1,226.53 per month
• $100,000 15-year home equity loan at 8.25%: $970.14 per month

• $100,000 10-year HELOC at 8.22%: $1,224.93 per month
• $100,000 15-year HELOC at 8.22%: $968.40 per month

So, right now, the difference between borrowing $100,000 with either a home equity loan or HELOC is negligible, just a few dollars per month, with the HELOC slightly less expensive. That said, HELOCs could become materially cheaper in the months to come if interest rate cuts are issued, . And, with a HELOC, borrowers won't have to do anything to exploit that cooler rate climate, as the rate and payment will adjust independently. This will not only save them extra time and effort but also on refinancing costs, which they'll be liable for if they want to refinance their home equity loan into the new, prevailing rate.

Other factors can also impact your monthly payment, unrelated to the rate or amount of equity withdrawn. With a home equity loan, for instance, borrowers will receive the money in a single lump sum, and be expected to repay it immediately each month. HELOC borrowers, will not, as they'll receive the money as a revolving line of credit which they can utilize similarly to a credit card. Even when using the line of credit, interest-only payments will be mandated during the initial draw period before full payments are required in the repayment period. 

With so much to consider, then, and every homeowner coming to the home equity borrowing process with a unique set of circumstances, it may be beneficial to speak with a home equity lending expert who can offer insight and guidance. 

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The bottom line

While rates (and payments) on a $100,000 home equity loan and $100,000 HELOC are almost identical now, the inherent differences of these borrowing products and repayment systems all but ensure that they won't remain that way long term... or even in the next few months. Against this reality, then, homeowners should carefully consider the pros and cons of each, match them against their own financial needs and calculate the short- and long-term costs to determine affordability not only now, but over multiple years. With the home functioning as collateral, it's critical that this math adds up. If it doesn't, alternative borrowing options may be more appropriate.