Home equity line interest rate

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home equity line of credit, or HELOC, is a type of home equity loan that allows you to draw funds as you need them and repay the money at a variable interest rate. Because of this, HELOCs are generally best for people who need funds for ongoing home improvement projects or who need more time to pay down existing debt. HELOCs typically have lower interest rates than home equity loans and personal loans; to get the best rates, you’ll have to have a high credit score, a low debt-to-income ratio and a lot of tappable equity in your home.

Home equity line interest rate

Bankrate’s home equity line of credit (HELOC) rate offers help you compare interest rates, fees, terms and more as you start your search for a loan. The resources below also serve as a starting point for learning about how home equity works and when a HELOC is a good option.Advertiser DisclosureZIP codeProperty valueRemaining mortgage balanceLoan amountCredit score780+760 – 779740 – 759720 – 739700 – 719680 – 699660 – 679640 – 659620 – 639Loan type

Home equity loan (2)HELOC (5)Cash-out refinance (0)Terms explained

Showing results for: HELOC loans for $75,000

LenderAPRUpfront costsMo. payment
Third Federal Savings and Loan Association of ClevelandNMLS #4494014.4HELOC6.74%Rate: 6.740%$0Not applicableNextLender info
Flagstar BankNMLS #4174904.3HELOC7.76%Rate: 7.740%Term: 10-year fixed$75Not applicableNextLender info
PNC BankNMLS #4463034.3HELOCApply within 15 minutesFixed Rate Option, only pay interest on borrowed amountRenovate your home, refinance your mortgage, consolidate debtNextLender info
Figure4.7HELOCBorrow $15k – $400k with a Figure HELOCApproval in 5 minutes. Funding in as few as 5 days100% online application. Seamless process with fixed ratesNextLender info
CitizensNMLS #4339604.7HELOCRates as low as 6.75% APR*No closing cost, application fees, origination fees, or prepayment penalty.Easy online application, apply in minutesNextLender info

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Bankrate guide to home equity lines of credit (HELOCs)

Why trust Bankrate?

At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure our content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.

When shopping for a HELOC, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date. Check the lenders’ websites for more current information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.

What are today’s current HELOC rates?

LOAN TYPEAVERAGE RATEAVERAGE RATE RANGE
HELOC8.49%6.49% – 8.77%

To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. The rates shown above are calculated using a loan or line amount of $30,000, with a FICO score of 700 and a combined loan-to-value ratio of 80 percent.

Note: The above APRs are current as of Feb. 8, 2023. The exact APR you might qualify for depends on your credit score and other factors, such as whether you’re an existing customer or enroll in auto-payments.

https://inline.bankrate.com/r/3b066a5a-94bb-4d31-bdb8-79904984a807?utm_campaign=br-he-main-rt&utm_medium=embed&selector=%23cash-out-refi+%3E+div&csid=3671dc51-6412-4a88-8e6d-cc13867a93fd&caid=684641af-f84c-4b70-b113-6b3f49cf1d44&ciid=a16c0069-ffc4-40fc-b933-ec9190d16649&ctid=30c09cfb-05b9-48b8-9ea8-56fcf2d68059&tenant=wk_2HY72DnK7gi69dEoWAHQTskzorW&srckey=src_1NT28tRM614f69qC61p7Wxy1iJa&cxsid=1ce0e64d-cd65-469c-acb0-4f5c2cf894dd&placement=92e4927d38&imre=aHR0cHM6Ly93d3cuYmFua3JhdGUuY29tL2hvbWUtZXF1aXR5L2hlbG9jLXJhdGVzLz96aXBDb2RlPTQ4MDE3&_mfuuid_=1232e95c-1b7e-4620-b060-b1a87a7fc150&width=936&ts=1676138602254

Best home equity line of credit (HELOC) rates in February 2023

LOAN TYPELOAN AMOUNTLOAN TERMAPR RANGEBEST FOR
Third Federal Savings and Loan$10,000–$200,00010-year draw, 30-year repay6.49%Long repayment terms
Bethpage Federal Credit UnionUp to $500,00010-year draw, 20-year repay6.99%Fixed-rate options
Bank of America$15,000–$1 million10-year draw, 20-year repayStarting at 6.24%Low fees
Flagstar Bank$10,000–$500,00010-year draw, 20-year repayStarting at 5.49%Good credit
Figure$15,000–$400,0005–30 yearsNot specifiedFast funding
CitizensStarting at $5,00010-year draw, 15-year repayNot specifiedLow loan amounts
BMO Harris Bank$25,000–$150,00010-year draw, 20-year repayStarting at 6.89%Different loan options
Lower$15,000–$350,00010-year draw, unspecified repayNot specifiedQuick approval
PenFed Credit Union$25,000–$500,00010-year draw, 20-year repayStarting at 8.00%Flexible membership requirements
PNC$10,000–$1 millionNot specifiedNot specifiedBorrowing options
TD BankStarting at $25,000Not specified7.34%In-person service

Note: The above APRs are current as of January 2023. The exact APR you might qualify for depends on your credit score and other factors, such as whether you’re an existing customer or enroll in auto-payments.

Third Federal Savings and Loan: Best home equity line of credit with a long repayment term

Rating: 4.4 stars out of 5

4.4

Bankrate Score

Overview

Third Federal offers home equity loans and HELOCs featuring long repayment terms, potentially low interest rates and few fees.LenderThird Federal Savings and LoanInterest Rates6.49% APRQualificationsBorrow up to 80% of your home’s valueAvailable Term Lengths10-year draw period with a 30-year repayment periodLine of Credit Amount$10,000 to $200,000FeesA $65 annual fee applies (waived in the first year). Some borrowers may be responsible for taxes and flood insurance.

  • Why Third Federal Savings and Loan is the best home equity line of credit with a long repayment term:
  • Perks
  • What to watch out for:

Bethpage Federal Credit Union: Best home equity line of credit with a fixed-rate option

Bethpage Federal Credit Union logo

Rating: 4.2 stars out of 5

4.2

Bankrate Score

Overview

Bethpage is a credit union that serves over 400,000 members. The credit union offers mortgage loans, refinance loans and HELOCs. Its HELOCs have zero fees.LenderBethpage Federal Credit UnionInterest Rates6.99% APRQualificationsMust be a member of the credit union by opening a savings account with a minimum balance of $5Available Term Lengths10-year draw period with a 20-year repayment periodLine of Credit AmountUp to $1,000,000FeesIf you close your HELOC within 36 months, you’ll need to repay the closing costs you would’ve paid. Hazard insurance and flood insurance may be required.

  • Why Bethpage Federal Credit Union is the best home equity line of credit with a fixed-rate option:
  • Perks
  • What to watch out for:

Bank of America: Best home equity line of credit for low fees

Bank of America  logo

Rating: 4.2 stars out of 5

4.2

Bankrate Score

Overview

Bank of America offers HELOCs in all 50 states and Washington, D.C., and nixes a lot of fees that other banks charge. You can also shave 0.25 percent off your rate when you set up automatic payments from a Bank of America checking or savings account, up to 0.75 percent off for making an initial withdrawal and up to 0.375 percent off for being a Preferred Rewards client.LenderBank of AmericaInterest RatesStarting at 6.24% APRQualificationsNot SpecifiedAvailable Term Lengths10-year draw period with a 20-year repayment periodLine of Credit AmountStarting at $15,000 to $1,000,000FeesEarly closure fee of $450, plus taxes and fees, apply to accounts closed within 36 months

  • Why Bank of America is the best home equity line of credit for low fees:
  • Perks
  • What to watch out for:

Flagstar Bank: Best home equity line of credit for good credit

Flagstar Bank logo

Rating: 4 stars out of 5

4

Bankrate Score

Overview

Flagstar Bank offers HELOCs that feature flexible withdrawal methods and affordable rates for those who can qualify. If you’re looking for a HELOC that offers attractive terms and you have a solid credit rating, you should check it out.LenderFlagstar BankInterest RatesStarting at 5.49% APRQualificationsBorrow up to 89.99% of your home’s value; not valid in TexasAvailable Term Lengths10-year draw period with a 20-year repayment periodLine of Credit Amount$10,000 to $500,000FeesThe annual fee is $75 (waived the first year), and borrowers may have to pay back closing fees if the account is closed within 36 months. Some loans require title insurance, government taxes and fees at closing.

  • Why Flagstar Bank is the best home equity line of credit for people with good credit:
  • Perks
  • What to watch out for:

Figure: Best home equity line of credit for fast funding

Figure logo

Rating: 4.7 stars out of 5

4.7

Bankrate Score

Overview

Figure is an online lender that offers HELOCs in 41 states and Washington, D.C. Its rates include an origination fee of up to 4.99 percent and discounts for enrolling in autopay and joining one one of it partner credit unions. Its HELOC works a bit like a home equity loan in the beginning: You get the full loan amount (minus the origination fee) with a fixed rate. As you pay off the line of credit, you can borrow funds again up to the limit. These draws will get a different interest rate.LenderFigure Lending LLCInterest RatesNot specifiedQualificationsBorrow up to 95% of your home’s value, depending on lien position and credit score. The minimum credit score is 620 in most states and 720 in Oklahoma.Available Term Lengths5 to 30 yearsLine of Credit Amount$15,000 to $400,000FeesPay an origination fee of up to 4.99% of your initial draw

  • Why Figure is the best home equity line of credit for fast funding:
  • Perks
  • What to watch out for:

Citizens: Best home equity line of credit for low amounts

Rating: 4.6 stars out of 5

4.6

Bankrate Score

Overview

Established in 1828, Citizens now has 1,000 branches spread across 11 states in the New England, Mid-Atlantic and Midwest regions. If you’re looking to borrow a small amount and you prefer banking in person, Citizens is a solid choice.LenderCitizensInterest RatesNot specifiedQualificationsNot specifiedAvailable Term Lengths10-year draw period with 15-year repayment periodLine of Credit AmountMinimum $5,000, but lines over $200,000 are available and have the lowest ratesFeesThere’s a $50 annual fee during the draw period (waived in the first year) and a $350 prepayment fee if you close your HELOC within 36 months.

  • Why Citizens is the best home equity line of credit for low loan amounts:
  • Perks
  • What to watch out for:

BMO Harris Bank: Best home equity line of credit for different loan options

Rating: 3.9 stars out of 5

3.9

Bankrate Score

Overview

 BMO Harris Bank has more than 500 branches spread across eight states. However, customers nationwide can bank with BMO online. Its HELOCs start at $25,000, come with flexible repayment terms and have no setup fees.LenderBMO Harris BankInterest RatesStarting at 6.89% APRQualificationsTypically, the minimum credit score for borrowers is 650 to 680Available Term Lengths10-year draw period with 20-year repayment periodLine of Credit Amount$5,000 to $1,000,000FeesBMO Harris covers the setup costs, but the borrower may have to repay those costs if the line of credit is closed within 36 months. Depending on the state, borrowers may also have to pay mortgage taxes. In some states, there is a $75 annual fee during the draw period.

  • Why BMO Harris Bank is the best home equity line of credit for different loan options:
  • Perks
  • What to watch out for:

Lower: Best home equity line of credit for quick approval

Lower logo

Rating: 3.7 stars out of 5

3.7

Bankrate Score

Overview

Lower, a fintech company that was founded in 2018, analyzes data to recommend the best loan for each borrower’s financial situation. Lower offers mortgages, refinance loans, home equity loans and HELOCs.LenderLowerInterest RatesNot SpecifiedQualificationsBorrow up to 95% of your home’s equityAvailable Term Lengths10-year draw period, unspecified repayment periodLine of Credit Amount$15,000 to $350,000FeesThere’s an origination fee of 1% on each HELOC transaction.

  • Why Lower is the best home equity line of credit for quick approval:
  • Perks
  • What to watch out for:

PenFed Credit Union: Best home equity line of credit with flexible membership requirements

Rating: 3.9 stars out of 5

3.9

Bankrate Score

Overview

Pentagon Federal Credit Union, or PenFed, serves 2 million members in all 50 states, Washington, D.C., and military bases in Guam, Puerto Rico and Okinawa. This credit union offers competitive rates on its HELOCs, along with other financial services, including credit cards, checking accounts, savings accounts, mortgages and auto loans.LenderPenFed Credit UnionInterest RatesStarting at 8.00% APRQualificationsMinimum credit score of 660. Maximum debt-to-income ratio of 50 percent. Borrow up to 90% of your home’s value for owner-occupied properties and 80% for non-owner-occupied properties depending on state, home type and credit score.Available Term Lengths10-year draw period with a 20-year repayment periodLine of Credit Amount$25,000 to $500,000Fees$99 annual fee, waived if $99 in interest was paid during the preceding 12-month period; $30 returned loan payment, check or ACH fee; $20 lien processing fee; late fee of 5% of past due amount, with $20 minimum.

  • Why PenFed Credit Union is the best home equity line of credit for flexible membership requirements:
  • Perks
  • What to watch out for:

PNC: Best home equity line of credit for flexible borrowing options

PNC logo

Rating: 4 stars out of 5

4

Bankrate Score

Overview

PNC offers HELOCs, mortgage refinancing products and mortgage products. Its products and services vary by location, so you’ll need to input your ZIP code on the website to see the rates and terms available to you.LenderPNCInterest RatesNot SpecifiedQualificationsBorrow up to 89.99% of your home’s value.Available Term LengthsNot SpecifiedLine of Credit AmountNot SpecifiedFeesPNC does not specify any typical fees on its website, but it does charge $100 every time you convert some of your HELOC into a fixed-rate option.Additional RequirementsPNC does not offer details about additional requirements.

  • Why PNC is the best home equity line of credit for flexible borrowing options:
  • Perks
  • What to watch out for:

TD Bank: Best home equity line of credit for in-person service

TD Bank logo

Rating: 3.9 stars out of 5

3.9

Bankrate Score

Overview

TD Bank is a great option if you live along the East Coast and prefer to bank in person. With that said, you can also bank by phone, online or via mobile app.LenderTD BankInterest RatesStarting at 7.34% APRQualificationsNot specifiedAvailable Term LengthsNot specifiedLine of Credit AmountStarting at $25,000FeesThere’s a $50 annual fee on loans over $50,000 and a $99 origination fee. The 2% termination fee (max $450) applies if you pay the line of credit off and close it within 24 months. You will also have to pay closing costs on lines over $500,000.

  • Why TD Bank is the best home equity line of credit for in-person service:
  • Perks
  • What to watch out for:

Methodology

To select the top lenders that offer home equity lines of credit (HELOCs), Bankrate considered 15 factors that help consumers decide whether a lender is a good fit for them, such as minimum APR and minimum draw requirements. We sought lenders with low fees and a range of loan amounts for borrowers with varying budgets and credit profiles. We also looked for conveniences like online applications and fast funding.

Of the 34 lenders reviewed, 11 made Bankrate’s list of best HELOCs. Each lender has a Bankrate rating, which consists of three categories. These categories include:

  • Availability: The minimum loan amount, time to approval, days to close, minimum draw requirement, minimum credit score and loan types offered
  • Affordability: The minimum APR, intro APR, discounts for auto-payers and fees
  • Customer experience: Online application availability, online account access, customer support options, auto-payment and app availability

What is a home equity line of credit, or HELOC?

HELOC is a variable-rate home equity product that works like a credit card — you have access to a credit line that you can draw from and pay back as needed. HELOC rates are tied to a benchmark interest rate. As the prime rate moves up or down, so does your HELOC rate. Payments vary depending on the interest rate and how much money you have used.

How does a HELOC work?

With a HELOC, you’re given a line of credit that’s available for a set time frame (known as the draw period), usually up to 10 years. While most HELOCs have an interest-only draw period, you can make both interest and principal payments to pay off the line of credit faster.

When the line of credit’s draw period expires, you enter the repayment period, which can last up to 20 years. You’ll pay back the outstanding balance that you borrowed, as well as any interest owed. A lender may allow you to renew the credit line.

How to apply for a HELOC

With most HELOC lenders, you can generally get the application process started in just a few minutes online. You’ll simply enter some personal and financial information, such as your name, address, salary, desired loan amount and estimated credit score.

To apply for a HELOC, start with these steps:

  • 1. Check your credit score
  • 2. Shop around
  • 3. Gather your application materials
  • 4. Complete the verification process
  • 5. Receive funds

What is a good HELOC rate?

Home equity line of credit rates are determined by your financial assets and liabilities, your credit score and broader economic factors outside of your control. Generally speaking, any rate below the average HELOC would be considered a good rate. 

Home equity rates moved up sharply in 2022, reflecting mostly what the Federal Reserve was doing with interest rates — a trend that could continue into at least the first quarter of 2023. That said, lenders often dangle attractive promotional rates to win your business. Just make sure that you’ll be happy with the new (almost certainly higher) rate when it resets in six months to a year.

Who is HELOC best for?

Because you have the ability to draw only what you need from a HELOC over 10 to 20 years, it’s best for people who need access to funds over a number of years — for a series of home improvement projects, for example — and who are comfortable using their homes as collateral.

How do I qualify for a HELOC?

In addition to estimating your home equity, lenders look at your credit history, credit score, income and other debts. Most lenders require a combined loan-to-value ratio (CLTV) of 85 percent or less, a credit score of 620 or higher and a debt-to-income (DTI) ratio below 43 percent to approve you for a home equity line of credit.

How do rising interest rates affect HELOCs?

The Federal Reserve implemented historic rate hikes in 2022 to combat inflation, and it’s likely these increases will continue for the time being. This action from the Fed has driven HELOC rates higher. “As long as the Fed is active, HELOC rates are going to continue to march higher,” says Greg McBride, Bankrate’s chief financial analyst. “The important point for homeowners who have a home equity line is that if the Fed raises interest rates another percentage point, your home equity line is going to go up another point.”

Common uses of a HELOC

Some of the most popular ways homeowners use HELOC funds include:

  • Home improvements
  • Medical expense
  • Large purchases
  • Tuition or education costs
  • Debt consolidation

Using your home equity to pay for home improvement projects that increase the value of your home can be a smart move. If you’re upgrading the kitchen or adding a bathroom — anything that enhances the living space — all is good. Be careful, though, about tapping home equity for more exotic uses, such as a swimming pool or a tennis court – you might not recoup your investment.

Pros and cons of HELOCs

HELOCs offer a combination of relatively low interest rates and the flexibility to borrow what you need when you need it. If you need money over a staggered period, a line of credit is ideal. However, there are always risks when you take out a loan, especially one that’s secured by your home. Here are some of the key considerations for getting a HELOC.

PROS

  • Typically lower upfront costs than with home equity loans.
  • Lower interest rates than with credit cards.
  • Usually low or no closing costs.
  • Interest charged only on the amount of money you use.

CONS

  • Lenders may require minimum draws.
  • Interest rates can adjust upward or downward.
  • Lenders may charge a variety of fees, including annual fees, application fees, cancellation fees or early closure fees.
  • Late or missed payments can damage your credit and put your home at risk.

HELOC vs. home equity loan

While HELOCs and home equity loans are similar in some ways, they have a few distinct differences. These are some of the key factors you should consider when deciding between a HELOC and a home equity loan.

HELOCSHOME EQUITY LOANS
Interest RatesVariableFixed
APRsSlightly lowerSlightly higher
Funds disbursementLine of creditLump sum
Repayment termsFirst 5-10 years: Interest-only payments Last 10-20 years: interest and principal10-30 years of fixed payments
Best forOngoing home improvement projects, college tuition payments, medical expensesDebt consolidation, large home improvement projects, major purchases

HELOC vs. cash-out refinance

cash-out refinance replaces your current home mortgage with a larger home loan. The difference between the original mortgage and the new loan is disbursed to you in a lump sum. The main difference between a cash-out refinance and a HELOC is that a cash-out refinance requires you to replace your current mortgage, while a HELOC adds a loan to your current mortgage.

A HELOC may be a better option for you if:

  • You want more flexibility.
  • You already have a good mortgage rate.
  • You plan to use your HELOC only for tax-deductible home improvement projects.

A cash-out refinance may be a better option for you if:

  • You prefer a fixed monthly payment.
  • You want a lower mortgage rate.
  • You want to withdraw more home equity.

Other alternatives to a HELOC

A HELOC is not the right choice for every borrower. Depending on what you need the money for, one of these alternative options may be a better fit:

HELOC vs. reverse mortgage

With a reverse mortgage, you receive an advance on your home equity that you don’t have to repay until you leave the home. However, these often come with many fees, and variable interest accrues continuously on the money you receive. These are also only available to older homeowners (62 or older for a Home Equity Conversion Mortgage, the most popular reverse mortgage product, or 55 and older for some proprietary reverse mortgages).

HELOC vs. personal loan

Personal loans may have higher interest rates than home equity loans, but they don’t use your home as collateral. Like home equity loans, they have fixed interest rates and disburse money in a lump sum.

How to find the best HELOC rates

Before you start shopping for a HELOC, take some time to improve your credit score. If you carry a big credit card balance, pay it down. If your auto note is almost done, you might pay it off a month or two early. You might also make a few additional mortgage payments to increase your home equity.

Once everything is in order, shop around. To find the best HELOC rate, compare multiple lenders — a rule of thumb is to get quotes from at least three so you can compare offers. Remember, the rate is important, but it’s not the only factor you should consider. Competing HELOC rates are likely to be close, so be sure to also scrutinize fees and terms.

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