$40,000 home equity loan vs. $40,000 HELOC: Which is cheaper this May?

Homeowners should closely compare their home equity loan and HELOC costs before getting started with either. Nora Carol Photography/ With household debt levels high, credit card interest rates still sitting around 20% (on average) and inflation rising once again, millions of Americans now find themselves in need of extra financing. And they'll need access to a large amount fairly quickly to make ends meet. Fortunately, for homeowners, there are two viable options to secure this funding: home equity loans and home equity lines of credit (HELOCs) . With home equity levels in the United States reaching a record high in 2025 and with more than $10 trillion considered borrowable in today's economy, this May could be the smart time to leverage those funds with one of these products. And while $40,000 may feel like a lot to borrow, with hundreds of thousands in equity (on average) to use, a HELOC or home equity loan of this size will still allow you to maintain a healthy equity cushion for the future. To better determine the merits of each product now, it helps to know the associated monthly costs each comes with. Between a $40,000 home equity loan and a $40,000 HELOC , then, which will be cheaper this May (and in the months to follow)? That's what we'll examine below. Start by seeing how much home equity you could borrow here . $40,000 home equity loan vs. …