Which heloc would you take

[Kevin Allen]

Which heloc would you take. Wanting to set of a heloc on my primary residence before I move. Adjustable rate is 7 year draw period, 25 year payback. 4.25% Fixed rate is 5 year draw period. 15 year payback@ 4.75%

[Kyle McCorkel]

Interesting perspective and wise words from @Will Gaston

That being said...what DO you plan to use the HELOC for? If you use it for shorter term flips or BRRRR's, it might be less risky because you are using it to generate more equity to pay it off.

For example let's say you use a $50K HELOC to buy and rehab a property with an ARV of $80K. Now you just made an additional $30K in equity and can either sell or refinance to pay off the HELOC.

So, that all being said, my personal preference would be the adjustable rate with a longer payback period.  The monthly payment will be lower.  @Will Gaston brings up a great point about being "forced" to pay extra towards principal, but if you are disciplined enough you should be building up your CASH for in case the market turns south.  If the market tanks...you want extra CASH...not equity...because the equity will disappear due to a drop in the market.