Home equity loan rates are typically fixed, meaning the interest rate remains the same throughout the loan term. Rates are determined by factors such as credit score, loan amount, and market conditions. HELOC rates, on the other hand, are usually variable and tied to the prime rate.

The initial rate on a HELOC is often lower than a home equity loan rate, but it can increase over time. Make sure you understand how much your rate could potentially increase and what that would do to your monthly payment.