If you’re considering using your home equity to finance major expenses, it’s important to understand the differences between a second mortgage and a home equity loan. A second mortgage is an additional loan taken out against a property that already has a mortgage. However, the terms “second mortgage,” “home equity loan,” and “home equity line of credit” (HELOC) can be confusing. A second mortgage can either be a home equity loan, which provides a lump-sum loan with a fixed rate and term, or a HELOC, which offers a revolving line of credit with variable rates and ongoing access to funds.