HELOCs vs. home equity loans: Which is cheaper as rates are cut?

Securing a loan against your home’s equity can be a cost-effective option, even as interest rates fluctuate. With the Federal Reserve expected to continue cutting rates, now may be a good time to consider a home equity loan or a HELOC. While HELOC rates are currently slightly higher than home equity loan rates, they are likely to decrease in the future. HELOCs also offer the flexibility of a variable rate and easier qualification. On the other hand, home equity loans provide the security of a fixed rate that won’t change over time. Ultimately, the best choice depends on your timeline and risk tolerance, with a HELOC being better for immediate borrowing and a home equity loan potentially offering better rates in the future.