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Written by Jeff Ostrowski Linda Bell
Edited by Troy Segal
Reviewed by Mark Hamrick
Edited by Troy Segal
Reviewed by Mark Hamrick
Updated October 03, 2024
On this page
- Today's average HELOC rates
- How to get the best HELOC
- HELOC rates
- What is a home equity line of credit?
- Pros and cons of HELOCs
- Alternatives to a HELOC
- FAQs about HELOCs
- Check your credit score
The higher yourcredit score, the better your rates and the more likely you are to be approved. If you have a credit score in the mid-600s or below, work to pay off existing debt and make timely payments on your credit cards toimprove your score. - Shop Around
To make sure you're getting the best rate and terms possible, research a few lenders and take advantage of any prequalification offers available. - Gather your application materials
Many lenders will ask for your Social Security number or other identification, salary, employment information and estimated home value. Now is also a good time to collect details about your home's outstanding mortgage balance. After you apply, lenders should reach out within a few days, although some online lenders offer same-day approval. - Complete the verification process
Once you've accepted a line of credit offer, you'll have to provide verification documents, which may include pay stubs, W-2s or tax returns. You may also have to get an appraisal on your home. At this time, lenders will perform a hard credit check, which will temporarily ding your credit score. - Receive funds
The time between offer acceptance and funds disbursement varies by lender, but some may make HELOC funds available in as little as one week. From there, you can use your funds as needed and begin making payments.
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On This Page
On This Page
- Today's average HELOC rates
- How to get the best HELOC
- HELOC rates
- What is a home equity line of credit?
- Pros and cons of HELOCs
- Alternatives to a HELOC
- FAQs about HELOCs
What are today's average HELOC rates?
LOAN TYPE | AVERAGE RATE | AVERAGE RATE RANGE |
---|---|---|
HELOC | 8.94% | 8.35% – 10.54% |
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 October 2, 2024. 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.
National HELOC interest rate trends
HELOC rates stay under 9%
The average rate on a home equity line of credit (HELOC) was unchanged at 8.94 percent as of Oct. 2, the lowest level of the year, according to Bankrate’s survey of large lenders.
Home equity credit lines have variable interest rates, which change based on the prime rate, which is tied to Federal Reserve policy. On Sept. 18, the Fed announced a half-point cut to interest rates, a move that’s likely to drive down HELOC rates in the near term.
“The Federal Reserve may also implement a total rate cut of about 1 percent by year’s end, which may result in a significant decrease for those with equity loans,” says Jason Obradovich, chief investment officer at New American Funding, a mortgage lender.
HELOC rates can also change because one or more home equity lenders markets an especially generous rate. That’s one reason why it often pays to search around for HELOC offers, at least for a lower introductory rate.
HELOCs are more attractively priced compared to unsecured personal loans, which currently average 12.43 percent. If you’re looking to finance a renovation and have equity to tap, a line of credit could be less expensive than a home improvement loan. It’d also save you from a cash-out refinance, which could mean giving up a low rate on your mortgage in exchange for a new one.
A line of credit isn’t the only way to leverage your home’s equity. Another option: home equity loans, or second mortgages, which come with fixed interest rates. As of Sept. 25, the average rate for a 10-year, $30,000 loan fell to 8.47 percent and for a 15-year, $30,000 loan retreated to 8.38 percent, according to Bankrate’s survey.
How to get the best HELOC rate
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.
Before you start shopping for a HELOC, make sure you meet lenders’ requirements. Then, take some time to improve your credit score. If you carry a big credit card balance, pay it down. If your auto loan 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. 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 to get a sense of the APR, and make sure you’re not comparing apples to oranges.
Best home equity line of credit (HELOC) rates in October 2024
LOAN TYPE | CREDIT LINE AMOUNT | TERM PERIOD | CURRENT APR |
---|---|---|---|
Comerica Bank | $10,000–$500,000 | 30 years | 6.24% |
Bethpage Federal Credit Union | Up to $500,000 | 10-year draw, 20-year repay | 6.99% |
BMO | $25,000-$150,000 | 10-year draw/ 20-year repay for variable-rate HELOC; 5-20-year repay for fixed-rate HELOC | 8.04% (fixed) / 8.75% (variable) |
Bank of America | $15,000–$1 million | 10-year draw, 20-year repay | 7.24% |
Rate | $25,000–$400,000 | Up to 30 years | 7.60% |
Third Federal Savings | $10,000–$200,000 | 10-year draw, 30-year total repay period | 7.99% |
TD Bank | Starting at $25,000 | Not Specified | 8.49% |
Connexus Credit Union | Starting at $5,000 | 15-year draw, 15-year repay | 8.74% standard HELOC / 9.24% interest-only HELOC |
Note: The above APRs are current as of September 4, 2024. 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.
Comerica Bank
Comerica Bank
Rating: 4 stars out of 5
4
Bankrate Score
Bankrate Rating = 4/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
- Lender
- Comerica Bank
- Interest Rates
- Starting at 6.24% APR (special introductory rate)
- Approval Time
- N/A
- Max LTV Ratio
- 80%
- Minimum Credit Score
- N/A
- Available Term Lengths
- 30 years
- Line of Credit Amount
- $10,000-$500,000
- Fees
- Comerica’s fees vary by state. For example, California has an early termination fee of 2 percent of the credit limit with a maximum fee of $500 if the account is closed within the first three years.
Bethpage Federal Credit Union
Bethpage Federal Credit Union
Rating: 4.2 stars out of 5
4.2
Bankrate Score
Bankrate Rating = 4.2/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
- Lender
- Bethpage Federal Credit Union
- Interest Rates
- 6.99% APR (for 12 months)
- Approval Time
- 6-10 weeks
- Max LTV Ratio
- 75%
- Minimum Credit Score
- 720
- Available Term Lengths
- 10-year draw period with a 20-year repayment period
- Line of Credit Amount
- Up to $1,000,000
- Fees
- If 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.
Bank of America
Bank of America
Rating: 3.5 stars out of 5
3.5
Bankrate Score
Bankrate Rating = 3.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
- Lender
- Bank of America
- Interest Rates
- Starting at 7.24% APR (special introductory rate)
- Approval time
- 5-7 weeks
- Max LTV Ratio
- 85%
- Minimum Credit Score
- Unavailable
- Available Term Lengths
- 10-year draw period with a 20-year repayment period
- Line of Credit Amount
- Starting at $15,000 to $1,000,000
- Fees
- Early closure fee of $450, plus taxes and fees, applies to accounts closed within 36 months
Third Federal Savings
Third Federal Savings
Rating: 4.5 stars out of 5
4.5
Bankrate Score
Bankrate Rating = 4.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
- Lender
- Third Federal Savings
- Interest Rates
- 7.99%
- Approval Time
- Not Specified
- Max LTV Ratio
- 80%
- Minimum Credit Score
- Not specified
- Available Term Lengths
- 30 years
- Line of Credit Amount
- $10,000 to $200,000
- Fees
- You don’t need to worry about application or origination fees with either home equity loan type from Third Federal, and you can pay off your debt early without a penalty. The only charge you’ll need to pay is a $95 annual fee.
BMO
BMO
Rating: 4.5 stars out of 5
4.5
Bankrate Score
Bankrate Rating = 4.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
- Lender
- BMO
- Interest Rates
- 8.04% (fixed) / 8.75% (variable)
- Approval Time
- Not Specified
- Max LTV Ratio
- 70%
- Minimum Credit Score
- 650-680
- Available Term Lengths
- 10-year draw period and 20-year repayment term for HELOC (5-year to 20-year repayment term for fixed-rate HELOC)
- Line of Credit Amount
- $25,000-$150,000
- Fees
- BMO advertises both home equity loans and HELOCs with no application fees and low-to-no closing costs. If you close your account within three years, the bank might charge a fee to recoup closing costs, though. Additionally, the variable-rate HELOC comes with a $75 annual fee during the draw period, and there’s a $75 fee every time you convert a part of your balance to a fixed-rate after closing.
TD Bank
TD Bank
Rating: 4.1 stars out of 5
4.1
Bankrate Score
Bankrate Rating = 4.1/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
- Lender
- TD Bank
- Interest Rates
- 8.49% APR
- Approval Time
- 2.5 days
- Max LTV Ratio
- 90%
- Minimum Credit Score
- 660
- Available Term Lengths
- Not specified
- Line of Credit Amount
- Starting at $25,000
- Fees
- There’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.
Connexus Credit Union
Connexus Credit Union
Rating: 3.5 stars out of 5
3.5
Bankrate Score
Bankrate Rating = 3.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
- Lender
- Connexus
- Interest Rates
- 8.74% standard HELOC / 9.24% interest-only HELOC
- Approval Time
- within 30 days of applying
- Max LTV Ratio
- 80%
- Minimum Credit Score
- 640
- Available Term Lengths
- 15-year draw period with a 15-year repayment term
- Line of Credit Amount
- Starting at $5,000
- Fees
- Depending on loan terms and property location, closing costs can range from $175 to $2,000.
Rate
Rate
Rating: 3.3 stars out of 5
3.3
Bankrate Score
Bankrate Rating = 3.3/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
- Lender
- Guaranteed Rate
- Interest Rates
- 7.60% APR
- Approval Time
- 5-10 minutes
- Max LTV Ratio
- 90%-95%
- Minimum Credit Score
- 620
- Available Term Lengths
- Two-year to five-year draw period, up to 30-year repayment period
- Line of Credit Amount
- $25,000-$400,000 (Minimum of $25,001 in Alaska)
- Fees
- Guaranteed Rate charges a 1.99% origination fee for a HELOC. This charge is deducted from the line of credit, however; you don’t need to bring any money to closing.
Methodology
To determine this best HELOC rates list, we surveyed over 30 lenders offering home equity lines of credit. The top HELOC rates displayed here may be special introductory rates, and represent the lowest advertised APR (annual percentage rate) based on a borrower with a credit score of 700 or higher and a combined loan-to-value (CLTV) ratio of 80 percent obtaininga 30-year, $30,000 home equity line of credit.
Note that the lenders listed here are based solely on their offering the lowest APR, and are not necessarily the best overall HELOC lenders Bankrate has scored. Learn more about Bankrate’s lender review methodology.
What is a home equity line of credit, or HELOC?
AHELOCis a variable-rate home equity product that works like acredit 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 theprime ratemoves 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 aninterest-only draw period, you can make both interest and principal payments to pay off the line of credit faster.
When theline 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 do I qualify for a HELOC?
In addition toestimating your home equity, lenders look at your credit history, credit score, income and other debts. Most lenders require a combinedloan-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.
Your home equity is the key factor lenders look at when deciding if you will qualify for a HELOC. Remember, your equity serves as collateral for the HELOC, and lenders require that you have enough of an ownership stake in your property. While the criteria differ among lenders, some may let you tap as much as 90 percent of your home’s value. But to do so, you also must meet very stringent credit and debt-to-income requirements.— Linda Bell, Senior Writer, Home Lending
Read more:HELOC and home equity loan requirements in 2024
Pros and cons of HELOCs
HELOCs combine relatively low interest rates with the flexibility to borrow what you need when you need it. If you need money over an unpredictable period of time, 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
Lets you tap home equity without disturbing the primary mortgage (nice if you’ve locked in a low rate).
Typically lower upfront costs than 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.
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. home equity loan
While similar in some ways — they both allow homeowners to borrow against the equity in their homes — HELOCs and home equity loans have a few distinct differences. A HELOC functions like a credit card with a revolving line of credit and typically has variable interest rates. A home equity loan functions more like a second mortgage, providing funds upfront in a lump sum at a fixed rate of interest.
HELOC vs. cash-out refinance
Acash-out refinancereplaces 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 maindifference between a cash-out refinance and a HELOCis that a cash-out refinance requires you to replace your current mortgage, while a HELOC leaves your current mortgage intact; it adds an additional debt to your finances.
HELOC vs. reverse mortgage
With areverse 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).
Read more:HELOC vs. reverse mortgage
HELOC vs. personal loan
Personal loansmay have higher interest rates than home equity loans, but they don't use your home as collateral. Like ahome equity loan, they havefixed interest ratesand disburse money in a lump sum.
FAQs about home equity lines of credit
Home equity lenders reviewed by Bankrate
- Amerant
- Amplify
- Bank of America
- Bethpage Federal Credit Union
- BMO
- Chase
- Citibank
- Citizens
- Connexus Credit Union
- Credit Union of Texas
- Discover
- Fifth Third Bank
- Figure
- Flagstar Bank
- Frost Bank
- Homeside
- HSBC
- KeyBank
- Lower
- Northpointe
- PenFed Credit Union
- PNC Bank
- Police and Fire Federal Credit Union
- Prosper
- Quorum
- Republic Bank and Trust
- Regions Bank
- Rockland Trust Bank
- Spring EQ
- TD Bank
- U.S. Bank
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.
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