That’ll depend largely on your finances and how you plan to use the HELOC. Relatively high home values mean that you may have access to more cash than you will in the future. The squeeze of inflation is also very real right now, and a HELOC could help ease some of that strain. However, there’s never a good time to take out a HELOC whose payments you can’t afford. The negative consequences of late payments or default can be severe, both for your credit score and your ability to stay in your home.
Compare Home Equity Line of Credit (HELOC) Rates in April 2024
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Current HELOC Rates
LOAN AMOUNT |
APR AS LOW AS |
|---|---|
|
$25,000 |
6.99% |
|
$50,000 |
6.99% |
|
$100,000 |
7.13% |
Rates are calculated based on conditional offers for both home equity loans and home equity lines of credit with 30-year repayment periods presented to consumers nationwide by LendingTree’s network partners in the past 30 days for each loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.
Written by Rene Bermudez | Edited by Crissinda Ponder | Updated April 11, 2024How to get the best HELOC rates
- Boost your credit score. Pay off credit card balances (or keep them low) and make payments on time before applying for a HELOC. Lenders typically give borrowers with higher credit scores the best HELOC rates.
- Borrow less of your home’s value. A lower loan-to-value (LTV) ratio often comes with lower HELOC rates — in other words, only borrow what you need, especially if you plan to sell your home soon. The more equity you use with a HELOC, the less you’ll get to cash out when you sell.
- Shop around. Look at HELOC rates from at least three to five lenders, and don’t forget lenders you already bank with. Comparison shopping can save you thousands of dollars over the long haul, according to LendingTree data. If you don’t know where to begin, check out our lender list below.
How to compare HELOC rates
Gather rate quotes from three to five lenders and, if at all possible, make sure you apply for all of them on the same day. That way, when you compare rates you’re make an “apples to apples” comparison.
Can I get a fixed-rate HELOC?
Yes, but you’ll likely pay a higher interest rate — that means your payment on the amount you draw will be higher than a comparable, variable-rate HELOC. You won’t have to worry about rising rates in the future, though, which is especially important if you’re living on a fixed income.
The best HELOC lenders of 2024
Best HELOC for high loan amounts: Flagstar Bank
10 years
20 years
$1 million
Why we chose Flagstar Bank
Flagstar, a large regional bank based in New York, offers HELOCs in 49 states (excluding only Texas) in amounts ranging from $10,000 to $1 million. You’ll even have the flexibility to secure the loan with a primary or secondary residence. Just keep in mind their maximum LTV is still 85%, even with a higher loan amount.
Read our full Flagstar Bank mortgage review.
Best HELOC for quick closing: Guaranteed Rate
User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services.
User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services.
2 to 5 years
5 to 30 years
5 to 10 days
Why we chose Guaranteed Rate
If you’re looking for a speedy closing, you’ll likely appreciate Guaranteed Rate’s 100% digital application process and option to “FlashClose” — that is, sign most of your closing documents online. Guaranteed Rate boasts a five- to 10-minute application process and a five- to 10-day wait for funds. That’s quite fast compared to the 45 to 60 days you could wait with a traditional HELOC lender.
Read our full Guaranteed Rate mortgage review.
Best for HELOCs with no closing costs: Bank of America
User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services.
User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services.
None
No application fees or annual fees
HELOC rate discounts for eligible borrowers
Why we chose Bank of America
As a national bank, Bank of America offers the convenience of accessibility — regardless of where you live or any changes life throws your way, you’ll likely be able to access a branch. And if you’re looking for a lender advertising HELOCs with no closing costs, Bank of America has that and more — plus, they also charge no application fees and no annual HELOC fees. In addition, there are several ways to earn rate discounts on your HELOC, but you’ll need to have a Bank of America checking account to utilize most of them.
Read our full Bank of America mortgage review.
20 years
20 years
95%
Why we chose Navy Federal Credit Union
Navy Federal CU serves active duty service members, veterans, members of the U.S. Department of Defense and their immediate families and household members. Their HELOCs — which allow a maximum combined loan-to-value ratio (for primary and secondary residences) of 95% — were among the most generous of the lenders surveyed. And with a solid online experience and 24/7 customer support, Navy Federal could be your best bet if you’re looking for a high-LTV HELOC.
Read our full Navy Federal Credit Union mortgage review.
Best for fixed-rate HELOCs: Truist
10 years
5 to 30 years*
8.68% to 16.00%
*Repayment periods for fixed-rate HELOCs can vary. Variable-rate HELOCs are only offered a 20-year repayment period.
Why we chose Truist
Truist allows you to take out a variable-rate HELOC — and, if you choose, you can lock in a fixed rate on up to five draws at a time (though you’ll have to draw at least $5,000 to take advantage of this option). You can expect APRs ranging from 8.78% to 16.00% depending on your credit score, how much you’re borrowing and which repayment period you’ve chosen. Truist lends to customers in every state but three: Alaska, Arizona and Hawaii.
Read our full Truist mortgage review.
Learn more about how we chose our best HELOC lenders.What is a home equity line of credit (HELOC)?
A HELOC is a line of credit secured by your home’s equity. Just like a credit card, you can draw on the line any time and your payment is based only on the amount you use. You can pay it down to zero whenever you want and reuse it as needed. You may even be able to make interest-only payments, which can help keep your monthly expenses down.
What is home equity?
Home equity is the difference between your home’s value and the money you still owe on your house. Equity is shown as a percentage and represents how much of your home that you own.
Use a HELOC calculator to see how much you could borrow.
Pros and cons of a HELOC
| Pros | Cons |
|---|---|
Competitive interest rates. HELOC rates are typically lower than home equity loan rates and personal loan rates. Less interest. You’re only charged interest on the amount you use, which isn’t how loans with a lump sum payout work. Low payments. You can make interest-only payments if your lender offers that option. Low introductory rate. Your lender may offer a low introductory rate for the first six months. Capped interest. Your interest rate has a cap and can only go so high, regardless of what happens in the broader market. Tax benefits. You can deduct interest paid on your HELOC if it's used for home improvements. | Second mortgage rates. HELOC rates are higher than cash-out refinance rates because they’re second mortgages. Unpredictable payments. Your payments can increase over time when you have a variable interest rate. Tough credit requirements. You may need a higher minimum credit score to qualify than you would for a standard loan. Payment shock. You may have a very large balloon payment due after the interest-only draw period ends. Fees. You may have to pay annual membership and maintenance fees. Sudden repayment. You may have to pay the loan back in full if you sell your house. Loss of a major asset. You could lose your home if you can’t keep up with your payments. |
How do HELOC rates work?
Most home equity lines of credit come with variable interest rates, which means that their rates — and monthly payment amounts — can change over time.
Each lender determines how an individual HELOC’s interest rate is calculated, but the same factors are always included.
Factors that affect home equity line of credit rates
1. Your loan amount
Borrowing 80% or less of your home’s value is likely to get you lower HELOC rates, although most HELOC lenders let you borrow up to 85%. The lower the percentage of equity you borrow, the better your rate will be.
2. Your credit score
A 780 score or higher is recommended to get the lowest HELOC rates offers. However, some lenders will allow a 620 minimum credit score.
3. Your debt-to-income (DTI) ratio
Your DTI ratio measures your gross monthly income relative to your monthly debt, and keeping it low will help drive down your home equity line of credit rate. The less monthly debt you have compared to your income, the better. HELOC lenders will usually allow a maximum 43% DTI ratio.
4. Interest rate adjustments
Similar to adjustable-rate mortgages, HELOCs typically have interest rates that change on a specific schedule. Lenders are required to tell you how they’ll calculate your rates before you close on the loan. There are three factors that figure into your rate adjustments:
- The index is the moving part of the formula that determines your HELOC rate. Common indexes for HELOCs are the U.S. prime rate and the Constant Maturity Treasury (CMT).
- The margin is a set amount added to the index to calculate your interest rate. This gap between what the market determines and what you pay is how lenders make money on a HELOC.
- The ceiling sets a limit on how high your rate can rise at any time during the loan term.
5. Loan-to-value (LTV) ratio
Your LTV ratio measures how much of your home’s value you’re financing. Most lenders will require you to maintain at least 15% equity in your home, which limits your maximum LTV to 85%. There are some lenders who offer high-LTV HELOCs with LTVs of up to 100% — however, you usually have to accept a higher interest rate.
Average 30-year HELOC monthly payments
| Loan amount | Monthly payment |
|---|---|
| $25,000 | $166.16 |
| $50,000 | $332.32 |
| $100,000 | $673.72 |
| $150,000 | $996.95 |
Rates are calculated based on conditional offers for both home equity loans and home equity lines of credit with 30-year repayment periods presented to consumers nationwide by LendingTree’s network partners in the past 30 days for each loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.
HELOC rate trends: Are rates going up or down?
HELOC rates will probably keep increasing if job reports continue to show low unemployment and inflation remains high, even if mortgage rates fall or stay the same.
HELOC rates, like interest rates, are relatively high right now compared to where they sat before the pandemic. However, HELOC rates don’t necessarily move in the same direction that mortgage rates do, says Jacob Channel, LendingTree’s senior economist. That’s because they’re directly tied to a benchmark called the prime rate. When the prime rate goes up, HELOC rates follow.
One way to predict what HELOC rates will do in the future is to look at the federal funds rate, a driver behind the prime rate’s movements. The federal funds rate is the benchmark controlled by the Federal Reserve, and when it changes, the prime rate generally follows the same pattern.
The federal funds rate rose by 23% between January 1st of 2023 and January 1st of 2024. Since then, the average rate offered on the LendingTree platform for a 10-year HELOC moved from 8.10% to 9.47% in March—about a 17% increase.
Is a HELOC a good idea for you?
A HELOC can be a good idea if you need a more affordable way to pay for expensive projects or financial needs. It may make sense to take out a HELOC if:
You’re planning smaller home improvement projects. You can draw on your credit line for home renovations over time, instead of paying for them all at once.
You need a cushion for medical expenses. A HELOC gives you an alternative to depleting your cash reserves for unexpectedly hefty medical bills.
You need help covering the costs associated with running a small business or side hustle. We know you have to spend money to make money, and a HELOC can help pay for expenses like inventory or gas money.
You’re involved in fix-and-flip real estate ventures. Buying and fixing up an investment property can drain cash quickly; a HELOC leaves you with more capital to buy other properties or invest elsewhere.
You need to bridge the gap in variable income. A line of credit gives you a financial cushion during sudden drops in commissions or self-employed income.
How to apply for a HELOC
The application process for a home equity line of credit is very similar to what you do to apply for a home loan. You need to provide documentation of your finances, have your home appraised and check the loan estimates a lender gives you.
To qualify for a HELOC, you commonly need to meet the following three requirements:
- Minimum 620 credit score. You’ll get a better rate if your score is at least 780.
- Maximum 43% debt-to-income (DTI) ratio. Your lender will calculate your DTI ratio by dividing your monthly debt by your gross monthly income. The payments for the loan you’re applying for will also be factored in.
- Maximum 85% loan-to-value (LTV) ratio. As long as the amount you want to borrow doesn’t exceed 85% of your home’s appraised value, you may qualify for approval.
Be sure to shop with multiple lenders to make sure you’re getting the best deal. This simple step can save you a lot of money over the life of your loan.
Think a HELOC is right for you? Compare Top Lenders and RatesAlternatives to a HELOC: Which has the best rates?
Home equity loan vs. HELOC rates
Home equity loan rates are often slightly higher than HELOC rates, but they do have one big advantage: the rates are fixed rather than variable. This is a big selling point for people that prefer a simpler loan with stable monthly payments. So if you just need a lump sum of money, you may want to consider a home equity loan instead of a line of credit.
On the other hand, if you’ll need funds for unpredictable expenses — perhaps startup costs related to a business venture or a fixer-upper home project — a HELOC offers more flexibility and could save you money if it comes with a teaser rate.
Learn more about HELOCs vs. home equity loans and how to choose.
Cash-out refinance vs. HELOC rates
Cash-out refinance rates are usually lower than HELOC rates. In fact, they’re likely to be the lowest of all of your equity-tapping loan options.
Since a cash-out refinance replaces your existing mortgage, it’s a “first” mortgage. Lenders can usually offer lower rates for a first mortgage, as they’ll be first in line to get repaid if you can’t make your payments and they foreclose on your home.
A HELOC is a “second mortgage,” and lenders charge a higher rate to cover the risk that they might not be repaid in a foreclosure.
Learn about all the ways you can convert home equity to cash
If you need help deciding whether a HELOC, home equity loan or cash-out refinance is the best match for your financial plans, check out LendingTree’s full comparison of all your equity-tapping loan options.
Frequently asked questions
You’ll typically pay HELOC closing costs equal to 2% to 5% of your credit line amount, though the fees will ultimately vary from lender to lender. Some banks even offer no-closing-cost options. However, you’ll likely have to link the payments and withdrawals to your checking account to take advantage of options like these. Watch out for other conditions on the no-cost options, too — they may come with rules about how long you have to keep the HELOC open.
A teaser rate is a low interest rate offered on a loan product for a set time period at the beginning of a loan’s repayment schedule. It may be called an initial rate, introductory rate or discount rate, and many HELOC lenders offer teaser rates to their customers. Check the fine print for extra requirements like a higher minimum credit score. Make sure you can afford the payment once the teaser rate period ends. And don’t forget: You can refinance a teaser-rate loan to a fixed-rate loan in the future, if you qualify.
There may be a slight drop in your score when you apply for a HELOC. However, if you apply with multiple lenders within a 45-day window, the credit checks usually count as one inquiry, according to the Consumer Financial Protection Bureau (CFPB).
You’ll likely need a home appraisal for a HELOC, but the requirements will vary by lender. In cases where you aren’t required to get a full appraisal, you might want to use a broker price opinion instead.
Estimating your home equity is simple — just subtract your mortgage balance from your home’s estimated value. For example, if your home is worth $450,000 and you still owe $250,000 on the loan, you have $200,000 in home equity.
When calculating your home equity for a cash-out refinance or second mortgage, your lender will order a home appraisal to get a better idea of the value of the home.
However, the only way to truly nail down how much home equity you have is to sell the house. That’s because you’ll only know then what your home’s true value is and how much you’ll have to spend to sell it.
Featured HELOC resources
How we chose our picks for the best HELOC lenders
To determine the best HELOC lenders, we reviewed data collected from 35 lender reviews completed by the LendingTree editorial staff in 2023.
Each lender review gives a rating between zero and five stars, based on several HELOC features including home equity product features and variety, digital application processes and the availability of product and lending information online. To be eligible for a “best of” HELOC title, lenders must have a lender review rating of at least four stars.
We awarded extra points to lenders who:
- Publish HELOC rates online
- Provide detailed information about one or several different HELOC loan options
- Offer a loan-to-value (LTV) ratio above the 85% industry standard
- Offer fast closing options
- Offer products with rate discounts or no closing costs
Our editorial team brought together the data from our lender reviews, as well as the scores awarded for HELOC-specific characteristics, to find the lenders with a product mix, information base and guidelines that best serve the needs of HELOC borrowers.
