Home equity loan rates and terms vary, essentially, loans on your home’s equity fall into one of two types: open ended loans and closed loans. A closed or fixed loan would be for a specific time frame with fixed monthly payments usually up to 15 years in term.Open ended loans are those most often called a line of credit. With a highly flexible line of credit type loan, the borrower can draw, repay and then redraw, so they treat it like an overdraft and determine when they want to borrow and repay. Much the same as a credit card facility, in fact some of these facilities can be access with a credit card.

Line of Credit type loans usually require a more comfortable home equity for the lender and sound credit history, as they never know what their exposure on that loan will be from time to time except for its credit limit.