HELOC or equity loan

[John Ford]

I have an investment property that has a crap-ton of equity from appreciation, about $250k in equity. My credit union will give me up to $100k in either an investment HELOC or investment equity loan, which I'm planning to use as either a down-payment or to buy another property to BRRRR. The loan has a fixed rate, a 5-year interest-only period, then a 10-year P&I period.

The HELOC has a variable rate, a 20-year interest-only draw period, then a 20-year repayment period. So theoretically, I could use it over and over for the next 40 years to finance BRRRR properties! But the rate adjusts monthly and isn't capped until 18% (currently nowhere near that, but you never know...)

Would you take the HELOC or the loan?