Home Equity Loan & HELOC Rates
Your rate is priced for you - by your credit, your equity, and the market. Here's how it works, and how to get a better one.
How Home Equity Rates Work
HELOC rates
Variable
Your rate = index + margin. The index is usually the Prime Rate, which moves when the Federal Reserve changes its target rate. Your margin is set when you open the line and doesn't change.
- • Payment can rise or fall with the index
- • Lifetime rate cap disclosed in your agreement
- • Many lenders offer fixed-rate locks on part of the balance
Home equity loan rates
Fixed
A home equity loan's rate is set when you lock or close and never changes. Fixed rates follow longer-term market rates rather than the Prime Rate, so they can start higher than a HELOC's but protect you if rates rise.
- • Same payment for the entire term
- • Terms commonly 5 to 30 years
- • Shorter terms usually mean less total interest
Your rate depends on your credit score, combined loan-to-value ratio, debt-to-income ratio, property type, occupancy, and loan amount. Home equity loans have fixed rates; HELOCs have variable rates that can increase after account opening. All loans are subject to credit and property approval.
What Affects Your Rate?
Credit score
The biggest single factor. Lenders price in tiers, and the best pricing usually starts around 740. Paying down card balances before you apply can raise your score quickly.
Combined loan-to-value (CLTV)
The less of your home you borrow against, the lower the lender’s risk. Staying at 80% CLTV or below often earns better pricing than borrowing up to 90%.
Debt-to-income ratio (DTI)
Your monthly debt payments divided by gross income. A lower DTI shows room for the new payment and can improve your rate and approval odds.
Property type and occupancy
Owner-occupied single-family homes get the best terms. Condos, multi-unit homes, second homes, and rentals are often priced higher, if eligible.
Loan amount and term
Very small loans can carry higher rates because fixed costs are spread over less money. For home equity loans, longer terms may be priced higher.
The market
HELOC rates follow an index, usually the Prime Rate, which moves with the Federal Reserve. Fixed home equity loan rates track longer-term market rates.
How to Get a Better Home Equity Rate
Before you apply
- • Check your credit reports and fix errors
- • Pay down revolving balances to lift your score
- • Estimate your CLTV with the calculator below
- • Borrow only what you need - a lower CLTV can mean a lower rate
- • Gather income, mortgage, and insurance documents
When you compare offers
- • Compare APRs and total closing costs together
- • For HELOCs, compare the margin and the lifetime cap
- • Look past introductory rates to the fully indexed rate
- • Ask about annual, inactivity, and early closure fees
- • Ask about autopay or relationship discounts
Shopping around won't hurt your score as much as you think
Credit scoring models generally treat multiple mortgage-related inquiries within a short window (commonly 14 to 45 days) as a single inquiry, so compare lenders within a few weeks.
Estimate Your Borrowing Power
Estimate how much you could borrow and what your payments might be.
For illustration only; not a loan offer or commitment to lend. Results use the interest rate you enter and exclude taxes, insurance, and closing costs. HELOC rates are variable, so actual payments can rise or fall. The repayment estimate assumes the full amount is still owed when the draw period ends. Actual rates, terms, and borrowing limits depend on credit, income, property, and lender approval.
Home Equity Rates in Your State
We offer home equity loans and HELOCs in 15 states. See local home values and costs that affect your closing.
Home Equity Rate FAQs
How are HELOC rates set?
Most HELOCs use a variable rate equal to an index, usually the Prime Rate, plus a margin based on your credit and CLTV. The margin is fixed for the life of the line; the index moves with the market. Your agreement must disclose the maximum rate the line can reach.
How are home equity loan rates set?
Home equity loans have a fixed rate set when you lock or close. It reflects longer-term market rates plus the lender’s pricing for your credit score, CLTV, loan amount, and term. It will not change for the life of the loan.
What is the difference between the interest rate and the APR?
The interest rate is the cost of borrowing the money. The APR (annual percentage rate) also includes certain finance charges, like some lender fees, expressed as a yearly rate. For HELOCs, the APR generally reflects only interest and does not include closing costs, so compare fees separately.
Do home equity rates vary by state?
Rates are driven mostly by your credit profile and CLTV, not your state. State-specific costs such as recording taxes and attorney closing requirements can change your total closing costs, though.
Will checking my rate affect my credit?
It depends on the lender and the step. Some lenders show initial options using a soft credit check that does not affect your score; a full application usually requires a hard inquiry. For credit scoring, multiple mortgage inquiries within a short window (commonly 14 to 45 days) are generally treated as a single inquiry.
What is an introductory HELOC rate?
Some HELOCs offer a lower rate for the first several months. After the introductory period, the rate resets to the index plus margin. Compare the fully indexed rate, not just the intro rate.
See the Rate You Qualify For
The only way to know your rate is to check it. Start online in a few minutes.