Home equity interest rates (HELOC) on loans with a 20-year repayment period edged up slightly to an average of 6.16%, according to Bankrate’s latest rates for the week ended April 18. But for 10-year loans, interest rates are stable at 4.06%. Here you can see the lowest home equity rates you might qualify for.

All about HELOCs

HELOCs are revolving lines of credit granted to homeowners based on the equity they have in their home. HELOCs can be used to cover large expenses, home remodeling and repairs, medical bills and more. One thing that sets HELOCs apart from other types of loans is that once the funding is raised, the borrower can use the money as needed — either all at once or incrementally over time.

HELOCs typically have both a draw period and a payback period. The drawing period for a HELOC is typically the first 10 years of the loan. During this time, the borrower only has to make interest payments. After the drawing period has expired, the repayment period begins and the borrower can no longer withdraw any money. You are then responsible for paying back the principal and interest.

HELOCs often offer cheaper interest rates than other types of loans because the lenders are guaranteed the equity in your home as collateral. (Here you can see the lowest home equity rates you might qualify for.) Another reason HELOCs are popular is that they can be used very flexibly, from high-yield debt consolidation to home renovations to emergency medical expenses. Another thing that makes HELOCs attractive is variable interest rates, which can mean lower introductory interest rates, followed by interest rates that fluctuate over the life of the loan — meaning they can get higher over time.

It is imperative that borrowers keep track of interest and principal payments. Should you default, the lender can come to your house. Another factor to consider is that applying for a HELOC costs hundreds of dollars upfront. Lenders often charge appraisal fees, application fees, and title search fees during the application process.

Get a HELOC

You can expect to be eligible for a massive loan, but even homeowners with a lot of equity don’t always get as much money as they expect. This is because lenders often want borrowers to keep a 20% interest in their home. If you need more money, it might be worth considering a non-home equity loan. However, if you don’t find it difficult to borrow a certain amount of money, a HELOC can be beneficial as you don’t have to withdraw all the money and should you end up using all the funds, you don’t have to use them all at once.

When applying for a HELOC, experts recommend shopping around and getting three to five quotes from different lenders to ensure you’re getting the best rates and terms.