Home equity line of credit (HELOC) rates for January 2023

Written by
Jeff Ostrowski
Edited by
Suzanne De Vita
Reviewed by
Mark Hamrick
As of January 27, 2023

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A home equity line of credit, or HELOC, is a type of home equity loan that allows you to draw funds as you need them and repay the money at a variable interest rate. Because of this, HELOCs are generally best for people who need funds for ongoing home improvement projects or who need more time to pay down existing debt. HELOCs typically have lower interest rates than home equity loans and personal loans; to get the best rates, you'll have to have a high credit score, a low debt-to-income ratio and a lot of tappable equity in your home.

Bankrate's home equity line of credit (HELOC) rate offers help you compare interest rates, fees, terms and more as you start your search for a loan. The resources below also serve as a starting point for learning about how home equity works and when a HELOC is a good option.

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Bankrate guide to home equity lines of credit (HELOCs)

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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.

What are today's current HELOC rates?

LOAN TYPE AVERAGE RATE AVERAGE RATE RANGE
HELOC 7.73% 6.24% – 9.05%
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 Jan. 25, 2023. 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.

Best home equity line of credit (HELOC) rates in January 2023

LOAN TYPE LOAN AMOUNT LOAN TERM APR RANGE BEST FOR
$10,000–$200,000 10-year draw, 30-year repay 6.49% Long repayment terms
Up to $500,000 10-year draw, 20-year repay 6.99% Fixed-rate options
$15,000–$1 million 10-year draw, 20-year repay Starting at 6.24% Low fees
$10,000–$500,000 10-year draw, 20-year repay Starting at 5.49% Good credit
$15,000–$400,000 5–30 years Not specified Fast funding
Starting at $5,000 10-year draw, 15-year repay Not specified Low loan amounts
$25,000–$150,000 10-year draw, 20-year repay Starting at 6.89% Different loan options
$15,000–$350,000 10-year draw, unspecified repay Not specified Quick approval
$25,000–$500,000 10-year draw, 20-year repay Starting at 8.00% Flexible membership requirements
$10,000–$1 million Not specified Not specified Borrowing options
Starting at $25,000 Not specified 7.34% In-person service
Note: The above APRs are current as of January 2023. 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.

Third Federal Savings and Loan: Best home equity line of credit with a long repayment term

4.4
Bankrate Score

Overview

Third Federal offers home equity loans and HELOCs featuring long repayment terms, potentially low interest rates and few fees.
 
 
Lender:
Third Federal Savings and Loan
Interest Rates:
6.49% APR
Qualifications:
Borrow up to 80% of your home's value
Available Term Lengths:
10-year draw period with a 30-year repayment period
Line of Credit Amount:
$10,000 to $200,000
Fees:
A $65 annual fee applies (waived in the first year). Some borrowers may be responsible for taxes and flood insurance.

Bethpage Federal Credit Union: Best home equity line of credit with a fixed-rate option

Bethpage Federal Credit Union logo
4.2
Bankrate Score

Overview

Bethpage is a credit union that serves over 400,000 members. The credit union offers mortgage loans, refinance loans and HELOCs. Its HELOCs have zero fees.
 
 
Lender:
Bethpage Federal Credit Union
Interest Rates:
6.99% APR
Qualifications:
Must be a member of the credit union by opening a savings account with a minimum balance of $5
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: Best home equity line of credit for low fees

Bank of America logo
4.2
Bankrate Score

Overview

Bank of America offers HELOCs in all 50 states and Washington, D.C., and nixes a lot of fees that other banks charge. You can also shave 0.25 percent off your rate when you set up automatic payments from a Bank of America checking or savings account, up to 0.75 percent off for making an initial withdrawal and up to 0.375 percent off for being a Preferred Rewards client.
 
 
Lender:
Bank of America
Interest Rates:
Starting at 6.24% APR
Qualifications:
Not Specified
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, apply to accounts closed within 36 months

Flagstar Bank: Best home equity line of credit for good credit

Flagstar Bank logo
4
Bankrate Score

Overview

Flagstar Bank offers HELOCs that feature flexible withdrawal methods and affordable rates for those who can qualify. If you’re looking for a HELOC that offers attractive terms and you have a solid credit rating, you should check it out.
 
 
Lender:
Flagstar Bank
Interest Rates:
Starting at 5.49% APR
Qualifications:
Borrow up to 89.99% of your home's value; not valid in Texas
Available Term Lengths:
10-year draw period with a 20-year repayment period
Line of Credit Amount:
$10,000 to $500,000
Fees:
The annual fee is $75 (waived the first year), and borrowers may have to pay back closing fees if the account is closed within 36 months. Some loans require title insurance, government taxes and fees at closing.

Figure: Best home equity line of credit for fast funding

Figure logo
4.7
Bankrate Score

Overview

Figure is an online lender that offers HELOCs in 41 states and Washington, D.C. Its rates include an origination fee of up to 4.99 percent and discounts for enrolling in autopay and joining one one of it partner credit unions. Its HELOC works a bit like a home equity loan in the beginning: You get the full loan amount (minus the origination fee) with a fixed rate. As you pay off the line of credit, you can borrow funds again up to the limit. These draws will get a different interest rate.
 
 
Lender:
Figure Lending LLC
Interest Rates:
Not specified
Qualifications:
Borrow up to 95% of your home’s value, depending on lien position and credit score. The minimum credit score is 620 in most states and 720 in Oklahoma.
Available Term Lengths:
5 to 30 years
Line of Credit Amount:
$15,000 to $400,000
Fees:
Pay an origination fee of up to 4.99% of your initial draw

Citizens: Best home equity line of credit for low amounts

4.6
Bankrate Score

Overview

Established in 1828, Citizens now has 1,000 branches spread across 11 states in the New England, Mid-Atlantic and Midwest regions. If you’re looking to borrow a small amount and you prefer banking in person, Citizens is a solid choice.
 
 
Lender:
Citizens
Interest Rates:
Not specified
Qualifications:
Not specified
Available Term Lengths:
10-year draw period with 15-year repayment period
Line of Credit Amount:
Minimum $5,000, but lines over $200,000 are available and have the lowest rates
Fees:
There’s a $50 annual fee during the draw period (waived in the first year) and a $350 prepayment fee if you close your HELOC within 36 months.

BMO Harris Bank: Best home equity line of credit for different loan options

3.9
Bankrate Score

Overview

 BMO Harris Bank has more than 500 branches spread across eight states. However, customers nationwide can bank with BMO online. Its HELOCs start at $25,000, come with flexible repayment terms and have no setup fees.
 
 
Lender:
BMO Harris Bank
Interest Rates:
Starting at 6.89% APR
Qualifications:
Typically, the minimum credit score for borrowers is 650 to 680
Available Term Lengths:
10-year draw period with 20-year repayment period
Line of Credit Amount:
$5,000 to $1,000,000
Fees:
BMO Harris covers the setup costs, but the borrower may have to repay those costs if the line of credit is closed within 36 months. Depending on the state, borrowers may also have to pay mortgage taxes. In some states, there is a $75 annual fee during the draw period.

Lower: Best home equity line of credit for quick approval

Lower logo
3.7
Bankrate Score

Overview

Lower, a fintech company that was founded in 2018, analyzes data to recommend the best loan for each borrower's financial situation. Lower offers mortgages, refinance loans, home equity loans and HELOCs.
 
 
Lender:
Lower
Interest Rates:
Not Specified
Qualifications:
Borrow up to 95% of your home’s equity
Available Term Lengths:
10-year draw period, unspecified repayment period
Line of Credit Amount:
$15,000 to $350,000
Fees:
There's an origination fee of 1% on each HELOC transaction.

PenFed Credit Union: Best home equity line of credit with flexible membership requirements

3.9
Bankrate Score

Overview

Pentagon Federal Credit Union, or PenFed, serves 2 million members in all 50 states, Washington, D.C., and military bases in Guam, Puerto Rico and Okinawa. This credit union offers competitive rates on its HELOCs, along with other financial services, including credit cards, checking accounts, savings accounts, mortgages and auto loans.
 
 
Lender:
PenFed Credit Union
Interest Rates:
Starting at 8.00% APR
Qualifications:
Minimum credit score of 660. Maximum debt-to-income ratio of 50 percent. Borrow up to 90% of your home’s value for owner-occupied properties and 80% for non-owner-occupied properties depending on state, home type and credit score.
Available Term Lengths:
10-year draw period with a 20-year repayment period
Line of Credit Amount:
$25,000 to $500,000
Fees:
$99 annual fee, waived if $99 in interest was paid during the preceding 12-month period; $30 returned loan payment, check or ACH fee; $20 lien processing fee; late fee of 5% of past due amount, with $20 minimum.

PNC: Best home equity line of credit for flexible borrowing options

PNC logo
4
Bankrate Score

Overview

PNC offers HELOCs, mortgage refinancing products and mortgage products. Its products and services vary by location, so you'll need to input your ZIP code on the website to see the rates and terms available to you.
 
 
Lender:
PNC
Interest Rates:
Not Specified
Qualifications:
Borrow up to 89.99% of your home's value.
Available Term Lengths:
Not Specified
Line of Credit Amount:
Not Specified
Fees:
PNC does not specify any typical fees on its website, but it does charge $100 every time you convert some of your HELOC into a fixed-rate option.
Additional Requirements:
PNC does not offer details about additional requirements.

TD Bank: Best home equity line of credit for in-person service

TD Bank logo
3.9
Bankrate Score

Overview

TD Bank is a great option if you live along the East Coast and prefer to bank in person. With that said, you can also bank by phone, online or via mobile app.
 
 
Lender:
TD Bank
Interest Rates:
Starting at 7.34% APR
Qualifications:
Not specified
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.

Methodology

To select the top lenders that offer home equity lines of credit (HELOCs), Bankrate considered 15 factors that help consumers decide whether a lender is a good fit for them, such as minimum APR and minimum draw requirements. We sought lenders with low fees and a range of loan amounts for borrowers with varying budgets and credit profiles. We also looked for conveniences like online applications and fast funding.

Of the 34 lenders reviewed, 11 made Bankrate's list of best HELOCs. Each lender has a Bankrate rating, which consists of three categories. These categories include:

  • Availability: The minimum loan amount, time to approval, days to close, minimum draw requirement, minimum credit score and loan types offered
  • Affordability: The minimum APR, intro APR, discounts for auto-payers and fees
  • Customer experience: Online application availability, online account access, customer support options, auto-payment and app availability

What is a home equity line of credit, or HELOC?

A HELOC is a variable-rate home equity product that works like a credit 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 the prime rate moves 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 an interest-only draw period, you can make both interest and principal payments to pay off the line of credit faster.

When the line 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.

What is a good HELOC rate?

Home equity line of credit rates are determined by your financial situation, your credit score and broader economic factors outside of your control. Generally speaking, any rate below the average would be considered a good HELOC rate.

Who is HELOC best for?

Because you have the ability to draw only what you need from a HELOC over 10 to 20 years, it’s best for people who need access to funds over a number of years — for a series of home improvement projects, for example — and who are comfortable using their homes as collateral.

How do I qualify for HELOC?

In addition to estimating your home equity, lenders look at your credit history, credit score, income and other debts. Most lenders require a combined loan-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.

How do rising mortgage rates affect HELOCs?

The Federal Reserve has implemented historic rate hikes in 2022 to combat inflation, and it’s likely these increases will continue for the time being. This action from the Fed has driven HELOC rates higher.

Common uses of a HELOC

Some of the most popular ways homeowners use HELOC funds include:

  • Home improvements - Using your home equity to pay for home improvement projects that increase the value of your home can be a smart move.
  • Medical expenses - A HELOC may be a good option if you have large or ongoing medical expenses and want to take advantage of lower interest rates.
  • Large purchases - Because HELOCs have longer repayment periods than many loans, they may be an attractive choice for making large purchases.
  • Tuition or education costs - HELOCs often have lower interest rates than student loans, though some lenders may place restrictions on how you can use the funds.
  • Debt consolidation - A HELOC may be a good choice for consolidating credit card debt. However, be careful not to rack up even more debt during the HELOC's draw period.

Pros and cons of HELOCs

HELOCs offer a combination of relatively low interest rates and the flexibility to borrow what you need when you need it. If you need money over a staggered period, 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

  • Checkmark

    Typically lower upfront costs than with home equity loans.

  • Checkmark

    Lower interest rates than with credit cards.

  • Checkmark

    Usually low or no closing costs.

  • Checkmark

    Interest charged only on the amount of money you use.

CONS

  • Close X

    Lenders may require minimum draws.

  • Close X

    Interest rates can adjust upward or downward.

  • Close X

    Lenders may charge a variety of fees, including annual fees, application fees, cancellation fees or early closure fees.

  • Close X

    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 options may be a better fit:

  • Home equity loan - A home equity loan is a second mortgage with a fixed interest rate that provides a lump sum to use for any purpose. Unlike a HELOC with an interest-only period, you’ll be responsible for both interest and principal payments when the loan closes.
  • Cash-out refinance - If you can qualify for a lower interest rate than what you're currently paying on your mortgage, you may want to refinance your mortgage. If you refinance for an amount that's more than your current mortgage balance, you can pocket the difference in cash.
  • Reverse mortgage - With a reverse 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).
  • Personal loan - Personal loans may have higher interest rates than home equity loans, but they don't use your home as collateral. Like home equity loans, they have fixed interest rates and disburse money in a lump sum.

HELOC vs. home equity loan

While HELOCs and home equity loans are similar in some ways, they have a few distinct differences. These are some of the key factors you should consider when deciding between a HELOC and a home equity loan.

HELOCS HOME EQUITY LOANS
Interest Rates Variable Fixed
APRs Slightly lower Slightly higher
Funds disbursement Line of credit Lump sum
Repayment terms First 5-10 years: Interest-only payments Last 10-20 years: interest and principal 10-30 years of fixed payments
Best for Ongoing home improvement projects, college tuition payments, medical expenses Debt consolidation, large home improvement projects, major purchases

HELOC vs. cash-out refinance

A cash-out refinance replaces 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 main difference between a cash-out refinance and a HELOC is that a cash-out refinance requires you to replace your current mortgage, while a HELOC adds a loan to your current mortgage.

A HELOC may be a better option for you if:

  • You want more flexibility.
  • You already have a good mortgage rate.
  • You plan to use your HELOC only for tax-deductible home improvement projects.

A cash-out refinance may be a better option for you if:

  • You prefer a fixed monthly payment.
  • You want a lower mortgage rate.
  • You want to withdraw more home equity.

How to apply for a HELOC

With most HELOC lenders, you can generally get the application process started in just a few minutes online. You’ll simply enter some personal and financial information, such as your name, address, salary, desired loan amount and estimated credit score.

To apply for a HELOC, start with these steps:

    1. Check your credit score. The higher your credit 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 to improve your score.
    2. 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
    3. 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.
    4. 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.
    5. 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.

How to find the best HELOC rates

To find the best HELOC rate, it's critical to compare multiple lenders — a rule of thumb is to get quotes from at least three so you can compare rates, fees and terms. You’ll also want to try improving your credit score, clearing out existing debt and making additional mortgage payments to increase your home equity.

FAQs about home equity lines of credit