If you need to remodel your home, repair your car, pay off high-rate debt or cover another large expense, tapping into your home equity may make sense. After all, these loans use your home as collateral, so they typically come with competitive interest rates and allow you to borrow large amounts of money. On the other hand, there's more than one way to borrow against your home's equity. Two of the most common ways to do so are home equity loans and home equity lines of credit .
'If the borrower feels rates will fall in the short-term, a HELOC, which normally adjusts the interest rate monthly, may be a better opportunity.' That said, HELOC interest rates can adjust in either direction. If inflation increases and interest rates tick upward, your HELOC interest rate could increase. But with the expectation that interest rates will decline soon, a HELOC may be your best option. Take advantage of what a HELOC can offer today.