Who has the best HELOC rates?
Unlock the potential of your home with a Home Equity Line of Credit (HELOC) from these top lenders. Benefit from competitive rates and outstanding service, allowing you to access the equity in your home for renovations, education, or unexpected expenses.
NMLS #2042345
We try to reduce as many fees as possible.
4.9
on 3,049 reviews
NMLS #167283
Get personalized lender recommendations for $0
4.7
on 19,928 reviews
NMLS #1168
Loans and refinance - cash out
4.5
on 12,816 reviews
NMLS #1717824
100% digital app & online appraisal
4.4
on 2,472 reviews
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What Is A HELOC?
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by the equity in your home. It allows homeowners to borrow money as needed, up to a predetermined limit, using their home as collateral. Unlike a traditional loan, a HELOC functions much like a credit card, offering the flexibility to borrow, repay, and borrow again. The interest rates on HELOCs are typically variable, followed by a repayment period where both principal and interest are paid. HELOCs are often used for home improvements, debt consolidation, education expenses, or unexpected financial needs, providing a versatile financial tool for homeowners.
How to Choose?
- Interest Rates: Compare both the initial rates and the potential for rate increases over time.
- Fees and Costs: Look for application fees, annual fees, and closing costs.
- Repayment Terms: Understand the length of the draw period and the repayment period.
- Borrowing Limits: Assess larger amounts using your home’s equity.
- Flexibility: Check if the HELOC offers flexible borrowing and repayment options.
- Lender Reputation: Research customer reviews and the lender’s history of service.
When comparing HELOCs, it is crucial to consider various factors to ensure you select the best option for your financial needs. Interest rates are a primary consideration, so be sure to check both the initial rate, the index they rely upon and how they may adjust over time. Fees and costs, such as application fees, annual fees, and closing costs, can add up, so it’s important to understand all associated expenses. Repayment terms, including the length of the draw and repayment periods, will affect your monthly payments and overall financial planning. Additionally, look at the borrowing limits to ensure the HELOC provides sufficient funds for your needs. Flexibility in borrowing and repayment terms can offer convenience and peace of mind. Finally, researching the lender’s reputation through customer reviews and service history can help you choose a reliable provider.
Fees
Providers may charge fees in order to apply for and receive a HELOCs, a loan where borrowers use their home equity as collateral. These fees can include application fees, appraisal fees, attorney fees, and annual or maintenance fees. They vary by lender and can impact the overall cost of borrowing. Understanding these fees is crucial for homeowners considering a HELOC, as they affect the loan's affordability and overall value.
APR
The Annual Percentage Rate (APR) for HELOCs represents the interest rate on a HELOC per year. For a HELOC - it may not include origination fees and other fees (which are expressed separately).
Fixed vs. Variable rate: Unlike fixed-rate loans, HELOCs typically have variable interest rates tied to a benchmark like the prime rate, meaning the APR can fluctuate over the loan's life. This means when rates change so can your APR.
Fixed Rate: A fixed-rate loan has an interest rate and payment that remains constant for the entire term of the loan.
Advantages:
- Predictability: Monthly payments are consistent and predictable, making it easier for borrowers to budget and plan their finances.
- Protection from Rate Increases: Borrowers are protected from interest rate increases, ensuring stability regardless of market conditions.
Disadvantages:
- Higher Initial Rates: Fixed rates often start higher than initial variable rates, as they account for the risk of rate increases over time.
- Less Flexibility: If market rates fall, borrowers with fixed rates do not benefit from lower rates unless they refinance – often with new fees.
Variable Rate: A variable-rate loan has an interest rate that can change periodically based on an underlying benchmark or index, such as the prime rate or SOFR.
Advantages:
- Potential for Lower Initial Rates: Variable rates often start lower than fixed rates, providing initial savings.
- Benefit from Decreases in Rates: If market rates fall, borrowers benefit from reduced interest rates and lower monthly payments.
Disadvantages:
- Uncertainty: Monthly payments can fluctuate, making it harder to budget and predict long-term costs.
- Risk of Rate Increases: If market rates rise, borrowers face higher interest costs and increased monthly payments.
Cashback Features
Some HELOC accounts - like Aven actually offer cashback rewards1 during use. That’s because the Aven HELOC is also accessible via a credit card (alongside their cash features) - and they offer a strong 2% unlimited cashback program on any purchases with no limit. This benefit/feature be super valuable if you are looking to make purchases for a home improvement project.
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The annual percentage rate (“APR”) is the cost of credit as a yearly rate and does not include costs other than interest. The APR is a variable rate based on the Federal Funds Target Rate – Upper Limit (“FFTR-UL”) index (“Index”). The FFTR – UL is determined by the Federal Reserve’s Federal Open Market Committee and published periodically by the Wall Street Journal in its Money Rates section. The FFTR – UL as of August 4th, 2024, is 5.50%. Your initial APR is based on a margin, determined by your creditworthiness when you open your account, plus the Index at the time of application. Your APR is subject to change as allowed by applicable law. Best rates available only to the highest-qualified borrowers. The maximum APR will not exceed 18% during the life of your account. Cash Out (draw to bank account) fee and Balance Transfer fee is 2.5% of amount transferred, this fee is subject to change.
AutoPay Discount of 0.25% is offered to new cardholders only. You are not required to sign-up for Autopay. To keep the discounted rate, you must enroll in AutoPay by the end of your first billing cycle, or APR will increase by 0.25%. Unenrolling from AutoPay will increase your APR. Aven reserves the right to terminate the AutoPay Discount program for unenrolled cardholders at anytime and without notice.
Cash back available to those who enroll in AutoPay, refer to AutoPay Terms & Conditions. Cash back applies to valid purchases (not on refunds or returns) made using the Aven card, and does not apply to non-card transactions, including balance transfers, cash-outs and reward redemptions. Cash back is accumulated as points and redeemable as statement credit. Refer to Rewards Terms & Conditions.
- Our fixed monthly payment option (Aven Simple Loan) is available based on your APR plus fees not exceeding the High Cost Mortgage threshold set by regulation (CFPB § 1026.32). While the Aven Simple Loan plan is open, the rate will not increase.
The Aven Card is issued by Coastal Community Bank, pursuant to a license from Visa U.S.A., Inc. Aven accounts are made by Coastal Community Bank, Member FDIC. Equal Housing Lender. NMLS #2042345 (NMLS Consumer Access Page). For additional information or complaints to Coastal Community Bank, visit www.federalreserveconsumerhelp.gov
* Board of Governors of the Federal Reserve System (US), Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis [DGS10], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/DGS10.
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