Who Offers the Best HELOC Rates?

Young African American woman enjoying the sun after looking at HELOC rates.

If you have upcoming expenses that you will need to pay for in cash but don’t have a corresponding amount in your bank accounts, then a  home equity line of credit may be what you need in order to cover those expenses.

Tap into your home equity

home equity rates - Who Offers the Best HELOC Rates?

This versatile type of loan is offered by the vast majority of mortgage lenders and can be a convenient alternative to a home equity loan (which is essentially a second mortgage), a cash-out refinance or a personal loan for those who need to get their hands on some cash quickly.


HELOC vs. Home Equity Loan

Home equity lines of credit are more appropriate for times when the borrower may need to come up with an ongoing stream of cash instead of a single lump sum. They can be used for absolutely any purpose, such as

  • Home improvements
  • Debt consolidation
  • Purchase or repair of a car
  • Medical bills
  • Cover the cost of a special event such as a wedding.

They can also be used to cover long-term care expenses or legal fees if the borrower becomes involved in litigation.

A home equity line of credit is also more advantageous in that the borrower only pays interest on the amount that is actually withdrawn as opposed to interest on the entire loan from the beginning.

Home equity lines of credit can also be divided into two time periods.

  • The draw period is the first period, and this is the period of time during which the borrower can draw from the line of credit. In many cases, the lender will permit the borrower to make interest-only payments during the draw period.
  • The repayment period is the second period, and during this period the borrower must make interest and principal payments on the amount that was withdrawn until the draw has been repaid in full.

Unlike home equity loans that charge a fixed interest rate, home equity lines of credit virtually always charge variable rates of interest, at least initially. Because this exposes the borrower to possible interest rate risk, many HELOCs allow borrowers to lock in some or all of their outstanding balances at a fixed rate.

This rate may be the lowest rate that they will have to pay compared to credit card or personal loan interest. Borrowers who want the best HELOC rates will have high credit scores and solid payment histories. But HELOCs almost always charge lower interest rates than other types of debt.

home equity line of credit rates - Who Offers the Best HELOC Rates?

HELOC funds can be accessed in several different ways. Most helocs issue the borrower a book of checks that they can write against their draw along with a debit or credit card.

Borrowers can also usually get funds via telephone, in person (at one of the lender’s branch locations) or online. The interest charged on a HELOC can also be tax-deductible if the borrower is able to itemize deductions on their tax return.

Prospective borrowers today have more options than ever when it comes to finding the best possible home equity line of credit. Following is a list of some of the major home equity lenders and their rates.


Lowest HELOC Rates

 

Connexus best HELOC rates.

This lending institution has a HELOC with a 6-month 3.49% APR introductory rate and a non-introductory rate of 3.57% for borrowers who qualify.

The draw and repayment periods are both for 15 years and each payment is for 1.5% of the total loan balance.


Flagstar Bank best HELOC rates.

This bank offers a teaser rate of 3.49% APY on its HELOCs for the first 6 months, and then the rate converts to 5.74% APY thereafter.

The variable interest rate is tied to the Prime Rate Index and the bank will not assess any fees such as a prepayment penalty as long as the line of credit is open for at least 3 years.

There is a 10 year draw period and a 20 year repayment period, and draw amounts can range from $10,000 to $1,000,000. Borrowers have several different options open to them when they want to withdraw funds, such as checks, debit cards, etc.


Suntrust best HELOC rates.

This bank offers an introductory rate of 3.99% APR for the first year for initial advances of $25,000 or more and rates ranging from 5.5% APR to 7.22% APR for subsequent cash advances.

A 0.25% APR rate reduction is available for borrowers who set up an automatic payment plan through a SunTrust checking account. There is a 10 year draw period and a 20 year repayment period.


BB&T HELOC rates

Brotherhood Bank & Trust offers an introductory rate of 3.99% APR for the first year, then converts to 5.24% APR after that. The rate is always the Prime Rate minus 0.26%.

BB&T charges no closing costs, and borrowers can choose between interest-only payments and interest and principal payments during the draw period.


Bank of America best HELOC rates

Borrowers can get an introductory rate of 3.99% APY for the first year that converts to a variable rate currently standing at 6.03%. Those who are eligible for this program cannot already have another HELOC with Bank of America. Eligible borrowers can reduce their rates even further by taking the following measures:

  • Automatic monthly payment discount from a BOA checking or savings account of 0.25%
  • Discount of up to 1.50% (0.10% discount for each $10,000 withdrawn at the time an account is established) for initial withdrawal
  • Discount of up to 0.375% for Preferred Rewards clients.

Customers who have a few blemishes on their credit reports will qualify for higher rates. BOA HELOC customers also have access to a fixed-rate option to escape rising interest rates. Bank of America’s variable interest rates are tied to the Prime Rate that is published daily in The Wall Street Journal.


Bethpage best HELOC rates.

This credit union offers an introductory rate of 3.99% APR for the first year and 5.5% (the current Prime Rate) thereafter.

There are no closing costs and interest-only payments can be made for the first 10 years.

Borrowers can also lock in a fixed rate on some or all of the amount that they have withdrawn.


Bank of the West best HELOC rates.

This bank offers new borrowers an introductory rate of 4.49% APR for the first six months, which then converts to 5.49% APR thereafter.

Borrowers can get an additional discount of 0.25% APR by setting up an automatic payment plan using a qualifying Bank of the West checking or savings account.

  • There are no origination or closing costs, and lines of credit for up to $2 million are available.

third federal heloc - Who Offers the Best HELOC Rates?

This financial institution offers rates as low as 4.49% APR with a 10 year draw period and a 20 year repayment period.

The maximum LTV is 80% and there is no annual fee in the first year.

There are also no closing costs, repayment penalties or minimum draw requirements.


Figure best HELOC rates.

This bank offers HELOCs with an introductory rate of 4.99% APR for borrowers who qualify. Its HELOCs range from $15,000 to $150,000 with a maximum LTV ratio of 95%.

Borrowers must have a credit score of at least 600 to qualify.

Tap into your home equity

home equity rates - Who Offers the Best HELOC Rates?

PenFed best HELOC rates.

This credit union’s HELOC rates are broken down as follows:

Owner-Occupied Homes

Loan to Value (LTV)                           Line Amount                     Rate

80% or Less LTV                                   $10,000 – $400,000            Variable 5.50% APR (Prime + 0%)

80.01% to 85% LTV                              $10,000 – $400,000            Variable 6.00% APR (Prime + .50%)

85.01% to 90% LTV                              $10,000 – $250,000            Variable 6.50% APR (Prime + 1.00%)

Prime Rate is 5.50% as of May 1, 2019. There is a minimum rate floor of 3.75% APR and a maximum rate of 18% APR.

Non-Owner Occupied Homes

Loan to Value (LTV)                           Line Amount                     Rate

80% or Less LTV                                   $10,000 – $400,000            Variable 6.50% APR (Prime + 1.00%)


Citibank best HELOC rates.

As one of the major national banks, Citibank offers a range of HELOC products with several different rates for each product. It currently offers a standard rate of 6.24% APR for both principal and interest loans and interest-only loans.

But Citibank also frequently markets home equity lines of credit that come with a lower teaser rate for the first year and then convert to a higher rate after that.

It has recently offered home equity lines of credit with an initial teaser rate of 3.99% APR that converts to 6.74% APR thereafter.

Citibank’s HELOCs have no application fees or closing costs and allow borrowers to access funds using a checkbook or transfers to other Citibank accounts.


TD Bank HELOC.

This bank offers several sets of interest rates based upon a number of factors, including the size of the credit line, the borrower’s credit score and credit history and whether there are any annual fees. The current rates can be broken down as follows:

With Annual Fee

Interest rate, APR and origination fee for a primary residence or second home—including the annual fee.

Rate as low as   APR as low as                Annual fee       Origination fee

$50,000 – $99,999       Prime +0.24%    5.74%                           $50                   $99

$100,000 – $199,999   Prime -0.61%    4.89%                           $50                   $99

$200,000+                   Prime -0.61%    4.89%                           $50                   $99

________________________________________

Without Annual Fee

Interest rate, APR and origination fee for a primary residence or second home—without the annual fee.

Rate as low as    APR as low as           Annual fee       Origination fee

$25,000+         Prime +1.99%     7.49%                       None                $99

________________________________________

With Annual Fee

Interest rate, APR and origination fee for an investment property—including the annual fee.

Rate as low as     APR as low as          Annual fee       Origination fee

$25,000 – $500,000     Prime +1.74%      7.24%                      $50                  $99

 


Homeside HELOC.

This company offers an introductory rate of 5.75% APR with a maximum LTV ratio of 95%.

Borrowers can withdraw anywhere from $15,000 to $350,000. There is no annual fee and no prepayment penalty.


Citizens Bank HELOC.

Although it does not post specific rates, this bank employs several factors in its computations that determine the exact rate that they will charge to each borrower.

Some of these factors include the borrower’s credit score and payment history, the loan-to-value ratio of the home, the home’s value and the size of the line of credit that is requested.

Their interest rates are tied to the Prime Rate and are generally competitive with other major banks. An additional discount is available for borrowers who set up an automatic payment plan from a PNC checking account.


Key Bank HELOC.

This bank offers variable interest rates on its HELOC products with a combined LTV of 100%. Its rates are as low as 5.50% APR and as high as 7.15% APR for first liens, depending on the loan amount, the value of your home and the borrower’s credit information.

Second lien loans range from 6.05% APR to 7.70% APR. There is also a discount of up to 0.50% APR available for borrowers who set up automatic payments using a Key Bank checking account.

Borrowers get up to three chances to lock in a fixed rate, and the draw period can last for up to 15 years. Borrowers can get their funds either by writing a check, appearing in person at a Key Bank branch or online.

There is also a $50 annual fee and a minimum draw of $10,000.


Navy Federal HELOC.

Navy Federal’s HELOCs come with an APR as low as 5.75% for qualifying members of the armed forces. Rates are tied to the Prime Rate.  HELOCs range from $10,000 to $500,000 with a maximum LTV ratio of 95%.

Both the draw and repayment periods are for 20 years.


Wells Fargo HELOC.

Wells Fargo does not publish specific interest rates for its HELOCs. The minimum rate under any circumstances is 1%, and the maximum rate is limited by state law to 18%.

The rate of interest that is charged on a HELOC will vary according to a number of factors, including the size of the loan, the customer’s credit rating and the Prime Rate as published in The Wall Street Journal.

Interest rates cannot increase by more than 2% in a given year, with a 7% absolute cap. The interest rates charged on a HELOC of $25,000 to $500,000 could be anywhere from 5% APY to 10.25% APY, assuming a loan-to-value ratio of 70% or less.


Chase HELOC.

This bank does not publish specific HELOC rates, but its rates are tied to the Prime Rate Index. Chase simply assigns a rate on a per-borrower basis that is dependent on several factors such as their credit rating, the size of the loan and other data.

Borrowers who have certain types of accounts already open with Chase can get a rate discount of up to 0.62% APY.

Borrowers also have the option of converting some or all of their outstanding HELOC balances into a fixed rate account in order to escape rising interest rates.


US Bank HELOC.

This bank charges an APY of 3.99% for the first 6 months of payments, then 5.74% on all subsequent payments. This rate is tied to the Prime Rate that is published in The Wall Street Journal.

Borrowers who make automatic payments from a U.S. Bank checking or savings account will also have their interest rates reduced by 0.50%.


M&T HELOC.

This bank does not post specific HELOC rates, as its rates are dependent upon several factors such as the borrower’s location, the size of the loan and the borrower’s credit rating.

Borrowers can lock their outstanding balances into fixed rate accounts up to three times. There is no application fee, annual fees or closing costs as long as the line of credit stays open for at least 3 years.

The maximum LTV ratio on the home value is 90% for residential homes and 71% for other kinds of properties.


East West Bank HELOC

This bank does not list specific HELOC rates, but its borrowers do not have to have a minimum credit score in order to qualify as long as they have solid payment histories.

There is a 10 year draw period and a 20 year repayment period, and the maximum LTV is 60% for lines of credit up to $1,000,000 and 50% for lines of credit from $1,000,000 to $1,500,000. Funds can be accessed via check, manual advance or online.


PNC Home Equity Line of Credit.

This bank does not publish hard and fast rates for its HELOCs, but borrowers can get a discount of 0.25% by setting up an automatic payment plan using a PNC checking account.

Borrowers can also move their outstanding HELOC balances over to a fixed account at any time, and funds can be accessed via check, debit card, telephone, in person or online.

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mark cussen - Who Offers the Best HELOC Rates?

Mark Cussen is a financial counselor with more than 13 years of experience and has professional designations as a CFP®, CMFC and AFC. Mark has worked in all segments of the financial industry from investment management to mortgage loan origination, life insurance and annuities, financial planning and income tax preparation. He currently works with the U.S. military, helping service members transition financially into civilian life and in other capacities. Mark also sells life insurance and annuities on the side. He graduated from the University of Kansas with a Bachelor’s degree in English.