Home equity loan
What is home equity loan?
A home equity loan is a fixed-rate second mortgage drawn in full at closing and repaid on a fixed schedule. Your first mortgage stays exactly as it is.
What it means in practice
Often called a second mortgage, it gives you a lump sum with a fixed rate, a fixed payment, and a fixed payoff date — the predictability a HELOC lacks.
Like a HELOC it preserves your existing first mortgage rate, which matters most when that rate is below current market pricing.
Rates on home equity loans are normally higher than first-mortgage rates because the lender is in second position and gets repaid after the first lien in a foreclosure.