That said, these products operate in different ways, and they come with unique pros and cons in the interest rate environment of early 2025. So, prospective borrowers need to explore both before applying. But which will be better for 2025? A $100,000 home equity loan or $100,000 HELOC? That's what we'll explore below.

Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes. A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home’s value and pay that amount back in monthly installments.

HELOCs and home equity loans became (slightly) less affordable in the most recent week. The $30,000 home equity line of credit (HELOC) climbed two basis points to 8.28 percent, according to Bankrate’s national survey of lenders.

For reference, it also helps to know what they could look like if they rise by that same amount, should economic factors result in rate upticks: