Best HELOCs With Low Rates
The average HELOC rate today ranges between 8% and 10%. When compiling our list of best HELOC options, we took into account various factors, with the APR being one of the key considerations. However, it wasn’t the sole determinant. Here is a summary of our top HELOC choices:
- Citizens: APRs starting at 8.50%
- Fifth Third Bank: APRs starting at 8.50%
- Connexus Credit Union: APRs starting at 8.74%
- Alliant Credit Union:APRs starting at 8.75%
- U.S. Bank:APRs starting at 8.95%
Best flexibility for borrowers
Citizens
4.5
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
8.50%
CLTV
80%
Min. credit score
Does not publicly disclose
Compare rates from participating lenders in your area via Bankrate.com
8.50%
80%
Does not publicly disclose
Why We Picked It
Citizens offers HELOCs with APRs starting at the prime rate, currently 8.50% as of December 1, 2023, which was comparable to the national average at that time. Citizens does not disclose how low of a credit score an applicant may have to qualify, however.
The bank does not charge an application fee or closing costs. And it offers a 0.25% interest rate discount for borrowers who make automatic payments from a Citizens checking account.
Pros & Cons
- No application fee or closing costs
- 0.25% interest rate discount for borrowers who automatically pay from a Citizens checking account
- Not available in all states
- Doesn’t disclose credit requirements
Extra details
Loan Terms
Citizens offers HELOCs starting as low as $17,500; however, you must have a credit line of more than $200,000 to get the lowest APR available. The draw period is for 10 years, and the repayment period is 15 years. There are no fees, and some discounts are available, including for Citizens checking account customers. A $50 annual fee is waived during the first year of financing.
Not Available Nationwide
Citizens’ HELOCs are only available in the following areas: Connecticut, Delaware, Florida, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia or Vermont as well as Washington, D.C.
How To Apply
Borrowers can start the application online, in person or by phone. Customer support by phone is available from Monday to Friday 7 a.m. to 10 p.m. ET, and Saturday to Sunday 9 a.m. to 6 p.m. ET.
Best for Rate-Lock Options
Fifth Third Bank
4.5
Our ratings take into account a product's benefits and coverage levels. All ratings are determined solely by our editorial team.
APRs starting at
8.50%
CLTV
Min. credit score
660
Compare rates from participating lenders in your area via Bankrate.com
8.50%
90%
660
Why We Picked It
Fifth Third Bank HELOC rates start at the prime rate, which, as of December 1, 2023, is 8.50%. Fifth Third also does not charge closing costs with its HELOCs and offers a special rate lock feature in which you can lock in a fixed rate on any amount of your loan for a $95 fee. You can also unlock the rate at any time and do up to three rate locks at the same time.
Pros & Cons
- Offers a unique rate-lock option, which helps in a rising-rate environment
- Homeowners can access up to 90% of their home’s equity
- No closing costs
- Bank did not disclose its loan closing timelines
- Only available in 11 states
Extra Details
Loan Terms
Fifth Third offers HELOCs from $10,000 to $500,000. The HELOC has a 30-year term, beginning with a 10-year draw period where you only pay interest. After that, there is a 20-year repayment period where you pay the outstanding balance, plus interest.
Available Nationwide
Fifth Third’s HELOCs are available in the following 11 states:
- Ohio
- Florida
- Georgia
- Illinois
- Indiana
- Kentucky
- Michigan
- North Carolina
- South Carolina
- Tennessee
- West Virginia
How To Apply
You can fill out a lead form online, but you will need to meet with a Fifth Third Bank representative in person or speak to one over the phone to complete the HELOC application. Customer support by phone is available Monday through Friday, 8 a.m. to 6 p.m. ET and Saturday 10 a.m. to 4 p.m. ET. Fifth Third is closed on Sundays.
Best for quick turnaround times
Connexus Credit Union
4.5
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
8.74%
CLTV
80%
Min. credit score
Does not publicly disclose
Compare rates from participating lenders in your area via Bankrate.com
8.74%
80%
Does not publicly disclose
Why We Picked It
Connexus has a starting APR of 8.74%, as of December 1, 2023.
Connexus also offers an interest-only HELOC with a starting APR of 9.24%.
Since Connexus is a credit union, you will have to become a member to access its loan products.
Pros & Cons
- Offers a variety of home loan options including home equity loans and an interest-only HELOC
- APRs comparable to the national average
- Can approve most home equity products online and has fast turnaround times
- Connexus does not offer HELOCs in some states
- Its CLTV cap of 80% is average but some lenders allow up to 90%
Extra Details
Loan Terms
You must borrow at least $5,000 to receive the promotional APR. Connexus HELOCs have a 15-year draw period and then a 15-year repayment period. The minimum payment requirement is 1.5% of the amount borrowed (a $25 minimum).
Not Available Nationwide
Connexus’ home equity products are not available in Alaska, Hawaii, Maryland or Texas.
How To Apply
Borrowers can start the application process online, and Connexus says most applications can be completed entirely online. Customer support by phone is available Monday, Tuesday, Wednesday and Friday from 7 a.m. to 7 p.m. CT; Thursday from 9 a.m. to 7 p.m. CT; and Saturday from 8 a.m. to 1 p.m. CT.
Best for borrowers with low credit scores
Alliant Credit Union
4.5
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
8.75%
CLTV
80%
Min. credit score
620
Compare rates from participating lenders in your area via Bankrate.com
8.75%
80%
620
Why We Picked It
Alliant’s HELOC APR’s start at 8.75%, which is comparable to the national average. You’ll need to retain at least 20% equity (80% LTV) to take out a HELOC with Alliant.
Alliant also waives the application fee, appraisal fee or closing costs on HELOCs up to $250,000.
Pros & Cons
- Interest rates are still low, even for borrowers with lower credit scores
- Online application process
- Not available in all states
Extra Details
Loan Terms
Alliant offers HELOCs as low as $10,000 and up to $250,000 in order to get certain closing costs waived. Terms range from 15 to 30 years.
Not Available Nationwide
Alliant says its HELOCs are available in most states.
How To Apply
Borrowers can start the application online. Customer support by phone is available Monday through Saturday 7 a.m. ET to midnight ET, and Sunday 9 a.m. to midnight ET.
Best for large HELOC amounts
U.S. Bank
4.5
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
8.95%
CLTV
80%
Min. credit score
660
Compare rates from participating lenders in your area via Bankrate.com
8.95%
80%
660
Why We Picked It
U.S. Bank’s HELOCs have APRs that range from 8.95% APR to 13.10% APR as of December 1, 2023. Its starting rate was comparable to the national average at the time. U.S. Bank offers HELOCs to borrowers with credit scores of 660 or higher, and borrowers can choose between either a variable- or fixed-rate option.
The bank does not charge an application fee or closing costs in most cases. And it offers a 0.50% interest rate discount for borrowers who make automatic payments from a U.S. Bank account.
Pros & Cons
- A wide variety of options for homeowners who need cash, including home equity lines of credit and loans, and cash-out refinances
- HELOCs do not have closing costs
- Borrowers cannot complete an application entirely online
Extra Details
Loan Terms
U.S. Bank offers HELOC amounts from $15,000 to $750,000, or up to $1 million for California properties. The draw period is for 10 years. During this period, U.S. Bank does allow you to lock in your HELOC from an adjustable to a fixed rate on any outstanding balances.
Available Nationwide
U.S. Bank’s HELOCs are available in all states.
How To Apply
Borrowers can start the application online. Customer support by phone is available 24/7.
Summary: Best HELOC Rates
| Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating | APRs starting at | CLTV | Min. credit score | Learn More CTA text | Learn more CTA below text | Learn More |
|---|---|---|---|---|---|---|---|---|---|
| Citizens |  | 4.5 |  | 8.50% | 80% | N/A | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| Fifth Third Bank |  | 4.5 | | 8.50% | 90% | 660 | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| Connexus |  | 4.5 | | 8.74% | 80% | N/A | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| Alliant Credit Union |  | 4.5 | | 8.75% | 80% | 620 | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| US Bank |  | 4.5 | | 8.95% | 80% | 660 | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com |
Methodology
We reviewed nearly 20 mortgage lenders that offer home equity lines of credit for customers across the U.S. Lenders that do not display their interest rates online are not eligible for review.
We scored lenders primarily on the basis of their interest rates but added additional information that’s most important to borrowers such as time to close, discounts or promotional rates offered, closing costs, minimum credit score requirements and general loan terms.
The score is weighted evenly among the following loan and lender features:
- Interest Rate: 20%
- Minimum credit score requirements: 20%
- Closing timelines: 20%
- Accessibility: 20%
- Lender fees: 20%
Bonus points: Lenders who also underwrite home equity loans are awarded five points for offering more equity loan options
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Mortgage Lenders.
HELOC Rates Forecast for 2024
HELOC interest rates are variable, meaning they can rise just as easily as they can fall and lead to sizable increases in your monthly payment. The interest rate movement on a HELOC is indirectly influenced by what the Federal Reserve does to the federal funds rate.
With inflation levels trending lower in recent months, the Fed has signaled it may be done with rate hikes. But officials haven’t declared an end to hikes just yet. Should inflation not continue to slow down, it’s likely HELOC rates will remain elevated. The average HELOC rate is now ranging between 8% to 10%.
How Do HELOC Interest Rates Work?
HELOC rates are based on the prime rate, which is the rate banks use to lend to highly qualified customers. While most HELOC rates are variable—meaning they change periodically—some lenders offer fixed-rate HELOCs that allow you to lock in an interest rate and monthly payment on all or part of your balance.
What Is a Good HELOC Rate?
A competitive HELOC rate for most homeowners currently ranges from 7.5% to 9%. Several factors impact the interest rate such as prime rate, loan repayment term and your credit history.
How Often Do HELOC Rates Change?
Variable HELOC rates can adjust up or down as frequently as every month, but each lender has a different policy and your rate may fluctuate less often. Fixed rates, on the other hand, remain the same for the life of your loan.
The loan agreement discloses how often your rate can change, and you’ll receive a rate change notice on your monthly statement about upcoming adjustments.
How To Get the Best HELOC Rate
Before you apply, here are some actions you can take to lower your HELOC rate:
- Compare lenders. Getting quotes from several of the best HELOC lenders will give you a clear idea of which company offers the best rates and fees for your desired draw period and repayment term. You may also be eligible for discounted introductory rates.
- Have good or excellent credit. Borrowers with credit scores from 670 to 850 are more likely to qualify for a lower HELOC rate.
- Reduce your debt-to-income (DTI) ratio. Having a DTI ratio below 43% is helpful, but try to aim for 36% or lower to get the best rate.
- Increase your home equity. Lenders may let you borrow up to 85% of your home equity, although having a lower loan limit can help you qualify for a better rate. This is because it lowers your combined loan-to-value (CLTV) ratio, which factors in any existing home loans.
- Choose a shorter repayment period. Similar to home purchase loans, opting for a shorter repayment period, such as 10 or 15 years, can help you land a lower rate. However, expect your monthly payment to be higher once it’s time to repay the balance.
- Consider a traditional HELOC. Lenders may offer traditional HELOC—as opposed to the more popular interest-only HELOCs—that require principal and interest payments during the draw period. While your monthly payment is higher than an interest-only HELOC, you can typically get a better rate since you start repaying your loan balance immediately.
Pros and Cons of a HELOC
Pros
- Competitive interest rates. HELOCs tend to have lower rates than unsecured personal loans and credit cards since your home equity serves as collateral. It’s also common for lenders to waive closing costs and appraisal fees.
- Interest-only payments. An interest-only HELOC only requires you to repay the monthly interest charges during the draw period. This flexibility allows for affordable payments up front, giving you the option to use your money for other expenses.
- Multiple withdrawals. You can make as many withdrawals as you want during the draw period. This is helpful in reducing your interest expenses since you’ll only pay interest on what you take out compared to home equity loans, which require you to pay interest on the full loan amount.
- Potential tax deductions. HELOC interest is tax-deductible in select situations, such as completing home improvements on the home that secures your line of credit.
Cons
- Fluctuating interest rates. HELOC rates can fluctuate as the prime rate changes. Rising rates increase your total borrowing costs, so you may need to consider refinancing a HELOC into a fixed interest rate for predictable payments.
- Potentially expensive monthly payments. Your monthly payment during the repayment phase can be unexpectedly high if you only make interest payments during the draw period.
- Early closure fees. Lenders may charge an early closure fee or prepayment penalty if you pay off your balance or close your account before a specific number of months. These restrictions are more likely when you don’t need to pay closing costs.
- Foreclosure risk. You may lose your home if you default on your HELOC as your property is collateral.
How Do I Get a HELOC?
Start by comparing rates from multiple HELOC lenders. After choosing a lender, you can submit an application online or at a local branch. The loan officer will verify your credit and income history and request any additional documentation. A virtual or full appraisal is also required to calculate your available equity.
To get approved for a HELOC, you’ll need to meet the lender’s HELOC requirements, which are usually similar to its mortgage requirements. For example, most lenders require a minimum 620 credit score, a maximum 50% DTI ratio and proof of income. You’ll also need at least 15% to 20% equity to apply, depending on the lender.
Frequently Asked Questions (FAQs)
What is home equity?
The equity you have in your home is defined as the home’s value minus any debts you owe on the house, such as a first mortgage. In order to approve you for a home equity loan or line of credit, a lender will generally require you to have an appraisal so there’s a trusted third-party assessment of the value of the property.
How does a HELOC work?
HELOCs are revolving credit lines, meaning you can make use of only the amount you need, repay it and use it again. This takes place during what’s known as a draw period. Draw periods typically last 10 years. During this time, you still have to make a monthly payment, but it is often interest only.
However, once the draw period is up, you’re no longer allowed to use the line of credit and must start repaying the balance, including principal and interest. Repayment periods often last 20 years, though that can vary by lender.
How long does it take to get a HELOC?
The HELOC underwriting process typically takes from two to six weeks. You can typically start making withdrawals four business days after closing. Your lender may also require a minimum initial withdrawal.
What is a combined loan-to-value ratio?
Your combined loan-to-value (CLTV) ratio is the sum of any loans or debts you owe on the home—such as a first mortgage, second mortgage or home equity loan—divided by the home’s value. For example, if you have a $200,000 mortgage plus a $50,000 home equity line of credit, and your home is worth $300,000, your CLTV is 83%.
Next Up in Home Equity
- How Much HELOC Money Can I Get?
- Best Ways To Tap Your Home Equity
- Interest-Only HELOC Ultimate Guide
- What Is A Home Equity Line Of Credit?
- Ways To Get The Best HELOC Rates
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