A published benchmark used in the interest-rate formula for many adjustable-rate loans and HELOCs.
Put this term into context.
Use related guides, calculators, and magazine features to see how this concept affects real home-equity decisions.
Related Education Guides
Home Equity Loans for Veteran Homeowners: When a Fixed Second Payment May Fit
For veteran homeowners who want a known lump sum, a home equity loan may provide a fixed-payment alternative to a revolving line of credit.
Read guide →HELOC Rate Caps: What Can Change and How to Stress-Test the Payment
Rate caps can limit how quickly a variable HELOC rate changes, but they do not make the payment fixed. Learn how to read the…
Read guide →Home Equity Loan Closing Costs: What to Compare Beyond the Rate
A fixed rate is only one part of a home equity loan decision. Compare fees, term, payment, lien position and total borrowing cost.
Read guide →Cash-Out Refinance Closing Costs and the Break-Even Question
Replacing a first mortgage can create a new payment structure and new closing costs. A break-even framework helps put the tradeoff into context.
Read guide →Related Magazine Features
HELOC vs. HELOAN: The Core Difference Is Revolving Credit Versus a Lump Sum
Both products can use home equity without replacing the first mortgage, but one is revolving credit and the other is usually a closed-end lump-sum…
Read feature →Variable vs. Fixed: How Rate Structure Changes the HELOC–HELOAN Decision
HELOCs are commonly variable-rate while home equity loans are commonly fixed-rate, creating different types of payment uncertainty.
Read feature →Draw Period vs. Day-One Funding: How Access to Money Differs
A HELOC lets borrowers draw over time, while a HELOAN generally funds the full approved principal at closing.
Read feature →
Request Options