Skip Navigation Download Adobe® Acrobat Reader to view.
ROUTING# 302075267 | Locations | Rates
Colorado Credit Union
Open Search
Join Now

Home Equity Loans vs. HELOCs: How Colorado Homeowners Can Use Their Equity to Borrow Smarter

Published: December 2, 2025

Your home is more than a place to live; it’s one of your most powerful financial assets. With Colorado home values continuing to rise, many homeowners have built significant equity without realizing it. That equity can open the door to lower-cost borrowing for home improvements, debt consolidation, major life expenses, and more.

If you're thinking about tapping into your home’s value, you’re likely comparing two popular options:
a Home Equity Loan and a Home Equity Line of Credit (HELOC). 

This guide explains how each one works, how much you may be able to borrow, and how to choose the right option for your financial goals.

 

What Is Home Equity?


Home equity is the difference between your home’s current market value and what you still owe on your mortgage.

For example:

  • Home value: $400,000

  • Mortgage balance: $250,000

  • Estimated equity: $150,000

Most lenders allow homeowners to borrow up to 80–90% of their home’s value (minus the mortgage balance).
In this example, that means you may be able to access $70,000–$110,000 through a home equity loan or HELOC.


Why Home Equity Matters


Your home’s equity can help you:

  • Upgrade or renovate your home

  • Consolidate high-interest credit card or loan balances

  • Pay for education or large life expenses

  • Cover emergency costs

  • Finance long-term projects or phased renovations

“Many homeowners don’t realize how much equity they’ve built and how easily it can be used to improve their financial lives,” said Shauna Brazil, Senior Vice President of Lending at Colorado Credit Union.

“Our goal is to help members leverage that equity in ways that make sense for their goals, whether that’s home improvements, debt consolidation, or planning for life’s big moments.”

 


Home Equity Loan vs. HELOC: What’s the Difference?


Both options use your home’s equity as collateral, but they work very differently, and choosing the right one depends on how you plan to use the funds.

Home Equity Loan (Fixed-Rate Second Mortgage)


Best for: One-time expenses and predictable monthly payments

A Home Equity Loan gives you a lump sum upfront with:

  • A fixed interest rate

  • A fixed term

  • Consistent monthly payments

This option is ideal for:

✔ Major home improvements

✔ Debt consolidation

✔ Large purchases or expenses with a known cost

Why borrowers choose it: Stability. Your rate and payment never change.


HELOC (Home Equity Line of Credit)


Best for: Flexible access to funds over time

A HELOC works like a credit card backed by your home’s equity. You can borrow as needed during the 10-year draw period, then repay the balance during the 15-year repayment term.

There are two HELOC options:

1. Platinum HELOC

  • Variable interest rate

  • Borrow what you need, when you need it

  • Ideal for ongoing or unpredictable expenses

2. Interest-Only HELOC

  • Variable interest rate

  • Make interest-only payments during the draw period

  • Lower required monthly payments

  • Full principal + interest begins in the repayment period

Why borrowers choose it: Flexibility and access. Perfect for phased renovations, tuition payments, or emergency funds.

 

How to Choose Between a Home Equity Loan and a HELOC


Ask yourself these questions:

1. Is your expense a single known amount or ongoing?

  • One-time cost → Home Equity Loan

  • Multiple or uncertain expenses → HELOC

2. Do you prefer predictable payments or flexible access?

  • Predictable → Home Equity Loan

  • Flexible → HELOC

3. How will interest rates affect your plans?

  • Want a locked-in rate → Home Equity Loan

  • Comfortable with rate changes → HELOC

4. Do you want lower payments upfront?

 

 

How Much Can Colorado Homeowners Borrow?


Most homeowners qualify for 80–90% loan-to-value, minus the current mortgage balance.

Use Colorado Credit Union’s Home Equity Calculator to estimate your available equity and explore your loan options.

Why Colorado Credit Union Is a Top Choice for Home Equity Loans


As a local, member-owned financial institution serving Denver, Littleton, Brighton, and the Front Range, Colorado Credit Union offers:

  • Competitive Colorado home equity rates

  • No annual fees or prepayment penalties

  • Fast decisions from local lending experts

  • Personalized guidance tailored to your goals

  • A community-first approach—neighbors helping neighbors

When you join Colorado Credit Union, you’re not just a customer—you’re a member, a neighbor, and part of a community that cares.


Smart Uses for Home Equity in 2025


Colorado homeowners most commonly use home equity to:

  • Update kitchens and bathrooms

  • Add square footage or finish basements

  • Build outdoor living spaces

  • Consolidate high-interest debt

  • Pay for college or educational expenses

  • Cover medical or emergency expenses

  • Finance major life milestones

Used wisely, home equity can help you build long-term financial freedom.

 


Ready to Put Your Home’s Equity to Work?


Colorado Credit Union is here to help you explore your options, estimate your borrowing power, and choose the best home equity solution for your goals.

Call us at 303.978.2274.

or

Apply Now

 

Your home is more than a place.
It’s your financial future—and we’re here to help you make the most of it.

 
*Loans subject to credit approval.