Your home is more than just a place to live; it can also be a smart financial tool. If you’ve built up equity in your home, you might be able to tap into that value to help pay for important goals, big expenses, or even reduce high-interest debt. But how exactly does that work?
Let’s break it down.
What Is Home Equity?
Home equity is the difference between your home’s current market value and the balance you still owe on your mortgage. If your home is worth $300,000 and you owe $200,000, you’ve built $100,000 in equity. That equity grows over time as you pay down your mortgage or as your home’s value increases.
In Texas, you can borrow up to 80% of your home’s appraised value, minus what you still owe on your mortgage. So, if your home is worth $300,000, 80% of that is $240,000. If you still owe $200,000 on your mortgage, you may be able to borrow up to $40,000 through a home equity loan.
What Does a Home Equity Loan Do?
A home equity loan lets you borrow against that built-up value. Think of it as a second mortgage, one that gives you a lump sum of cash up front, which you pay back over time with a fixed interest rate. That predictability makes it a great option for:
- Home renovations or repairs
- Consolidating high-interest debt
- Covering tuition or education costs
- Funding a major purchase
- Emergency expenses
You can also explore cash-out refinancing, which replaces your mortgage with a larger one and gives you the difference in cash.
How Do I Get a Home Equity Loan?
The process is easier than you might think, especially when you work with a credit union that puts members first. Here’s how to get started:
- Figure out how much equity you have – Use a recent appraisal or market estimate and subtract your mortgage balance. In Texas, the formula to estimate your borrowing limit is:
(Home Value × .80) – Mortgage Balance
For example, if your home is valued at $300,000 and you owe $200,000, you could potentially borrow up to $40,000. - Check your credit and income – Lenders will look at your credit score, income, and debt-to-income ratio to determine eligibility.
- Choose the right product – Our lending team can help you compare fixed-rate home equity loan options tailored to your needs.
- Apply with confidence – You can quickly and easily apply online, and we’ll walk you through the paperwork, rates, terms, and next steps.
Why Work with a Credit Union Like ATFCU?
Unlike big banks, we focus on helping our members succeed, not maximizing profits. That means lower rates, fewer fees, and personalized service every step of the way. Whether you're upgrading your kitchen or refinancing high-interest debt, we’ll help you use your home’s equity wisely and affordably.
Ready to get started?
Austin Telco's friendly lending team will explain how your home's value may be the key to an affordable loan that you can use for almost any purpose.
- Funds provided in a single, lump sum payment
- Fixed interest rates mean your monthly payments will never increase
- Borrow against up to 80% of your home’s value (minus any existing mortgage loan balance)
- Repayment periods of up to 20 years
- A good way to consolidate higher interest debt
- No prepayment penalties for early payoff or additional principal payments
- No closing costs for loans of less than $250,000²
- Interest may be tax-deductible. ³
- The property used for collateral must be a single-family, owner-occupied homestead property.
Effective July 15th, 2025
Home Equity¹
| Loan Type |
5 Years Fixed
as low as
|
10 Years Fixed
as low as
|
15 Years Fixed
as low as
|
20 Years Fixed
as low as
|
30 Years Fixed*
as low as
|
|---|---|---|---|---|---|
| Home Equity | 5.39% | 5.79% | 6.09% | 6.49% | 6.99% |
Upon submission of your online inquiry a member of our home equity team will contact you to let you know of any additional supporting documentation needed and will send you additional required disclosures needed to complete your inquiry submission. Upon completion of your application submission a Loan Estimate will be sent to you indicating the terms you qualify for within 3 business days.
If you need more information, talk to one of our home equity specialists by calling 512-302-5555, ext. 7194, or email homeequity@atfcu.org
Resource Links for Texas Home Equity Loan
- Home Equity Application Package and FAQs
- Home Equity Loan Checklist
- FAQs for On-Time Closing
- HUD's Settlement Cost Booklet
- Home Mortgage Disclosure Act
¹Annual Percentage Rate. All rates are expressed "as low as". Rates shown are for first-lien home equity loans, second lien loan rates may be higher, please call for details. A 30-year term is only available for first-lien home equity loans and requires a loan minimum of $50,000. All rates and terms are subject to change without notice.
²Austin Telco pays all standard closing costs for new Home Equity/HELOC loans below $250,000. These costs include: title search, flood determination, credit report, and county filing fees. Refinances of existing Austin Telco Home Equity/HELOC loans are subject to a $300 refinance fee. If necessary, additional fees for member requested appraisal, survey, and/or title company closing costs will be the responsibility of the borrower. Estimated costs will be disclosed within three business days of receipt of a completed application. Loans of $250,000 and above may require an appraisal, title policy, and title company closing costs at the member’s expense. Hazard insurance is required. All loans are subject to standard credit approval.
³Consult with the IRS or a tax professional concerning tax deductible in your specific situation.