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Best HELOC lenders and rates of 2022

From credit unions to big banks, these lenders stand out for their unique offerings.

The best HELOCs offer competitive rates, low costs and fees, rate discounts and payment flexibility. We looked at over 25 HELOC lenders and weighed key factors like interest rates, annual fees, relationship discounts, line amounts and features like the ability to lock in a fixed rate and the willingness to lend against second homes.

We also scanned reviews from the Better Business Bureau and TrustPilot to get an idea of their customer service and engagement. Based on our research, this list represents our best HELOC picks for borrowers in 2022. Read the full methodology for how we rate home loan providers.

5 best HELOCs

Best for low rates: Bethpage Credit Union

Bethpage Federal Credit Union

As a nonprofit institution, Bethpage's HELOC has some of the best introductory rates around. It offers a 3.49% fixed rate for 12 months, but you must draw $25,000 at closing with a loan-to-value (LTV) ratio of 75% or less.

Your rate will change after the first year based on your credit, minimum draw amount and LTV. Bethpage lines start at $10,000 and go up to $1 million and only require a minimum $100 draw.

Best for flexible lending requirements: U.S. Bank

U.S. Bank

U.S. Bank has a broad view of credit and considers the borrower's full credit history, not just their score. This makes it an ideal choice for those who are in the process of building or rebuilding credit, offering lines starting at $15,000 up to $350,000, and possibly more. U.S. Bank doesn't charge closing costs on its HELOCs and waives the annual fee for customers with a U.S. Bank Platinum Checking Package for one year.

Best for relationship discounts: Bank of America

Bank of America

This Big Four bank has a strong HELOC program with multiple rate discounts. Automatic payments from your Bank of America checking or savings account reduce your rate by 0.25%. Preferred Rewards members can cut their rate by 0.125% to 0.375%. And the bank offers an initial draw discount of 0.1% for every $10,000 withdrawn and a 0.25% discount for HELOCs in the first lien position. BofA's HELOC limits range from $25,000 to $1 million.

Best for fast turnaround: Figure

Figure

This fintech lender offers faster-than-normal turnaround on its HELOCs. Borrowers may be approved within minutes and receive funds in as few as five days — most lenders take 30 to 35 days. Figure's fixed HELOC rates start at 3.25% APR with five- , 10-, 15- or 30-year terms. The downside is that you must take out the full amount of your HELOC when opening the line and pay up to 4.99% in origination fees, although this fee may be waived for excellent credit borrowers.

Best for comparing multiple lenders: LendingTree

LendingTree

LendingTree isn't a lender — it's an online marketplace that partners with a range of HELOC and home equity loan lenders across the country. Once you fill out an application, you'll be matched with a list of lenders that are willing to work with you and show the rates they're offering. You may even get a lower rate than you could on your own, since lenders are competing for your business.

What are HELOC introductory rates?

Introductory rates are special low rates that lenders use to entice borrowers. Intro rates are fixed rates for a set period of time — usually six to 12 months. After the intro period ends, a variable rate applies to your outstanding balance, which is usually the prime rate plus a margin. This rate will almost always be higher than the introductory rate, so be sure to check what your rate will be after the intro period, plus any caps on the rate.

5 best HELOC rates

While there may be providers with lower rates out there, these offers are some of the most competitive HELOC introductory rates as of June 2022.

  1. Regions Bank. Offers a 0.99% APR introductory rate for six months. After that, a variable rate of 4.50% to 11.375% APR applies.
  2. BMO Harris Bank. Offers an introductory rate as low as 2.75% APR for six months, and as low as 4.39% APR afterwards.
  3. Third Federal Savings and Loan. Offers 2.99% APR on HELOCs between $50,000 and $200,000 and 3.74% APR on HELOCs between $10,000 and $49,999.
  4. PNC Bank. The rates vary by state, the line limit and initial draw, but a loan officer I spoke with quoted a rate below 3% APR on a $500,000 HELOC in Florida.
  5. Citizens Bank. HELOC rates start at 3.25% on lines of $200,000 or more at an LTV of 80% or less.

When choosing a lender, always ask how long the introductory rate lasts and what your rate will be after the intro period ends. The maximum APR — the rate cap —you can be charged may be more important than the lowest available introductory rate since you’ll be paying that rate longer.

How to get the lowest rate on your HELOC

To get the lowest possible HELOC rate:

  • Compare multiple lenders. Don’t limit your search to major banks. Compare multiple lenders, including credit unions and online lenders, to see what rates and relationship discounts are available.
  • Maintain a good credit score. The best rates are available for borrowers with a FICO score of 740 and up. Avoid raising financial red flags before you apply for a HELOC, like closing or opening credit cards.
  • Lower your debt-to-income (DTI) ratio. Most lenders prefer that you have a DTI of 43% or lower for a regular mortgage, and a maximum 47% DTI to open a HELOC. But the lower your DTI, the better the chance you have of being approved.
  • Open a larger line. The best rates are available for borrowers who open lines of $25,000 to $100,000 or more and take a set minimum draw. But only do this if it makes financial sense, since you’re paying interest on this higher balance.
  • Look for relationship discounts. Many lenders, like BofA, offer relationship discounts, which can lower your HELOC rate by 0.25%, 0.50% or more. But remember to compare offers, as 5% APR minus 0.5% (4.5% APR) is still higher than 4% APR with no discount.
  • Scout rate caps. Unless you have a fixed-rate HELOC, your rate will fluctuate with the market. A cap guarantees that it won’t rise beyond a specific point, so compare rate caps across lenders to make sure you’re paying the lowest rate possible if rates rise.
  • Pay off your existing mortgage. Lenders sometimes offer better rates on HELOCs when they’re the lender in the first lien position. If you have a mortgage, they’re in the second lien position, which increases their risk if the home goes into foreclosure.

What’s the current average HELOC rate?

As of December 2021, the national average HELOC interest rate is 4.27% according to Bankrate. HELOC rates are usually based on the nationwide prime rate plus a margin. The prime rate changes in response to fluctuations in federal funds rate. However, the margin is unique to each borrower.

For example, if the prime rate is 4% and your margin is 1.25%, your HELOC rate will be 5.25%. Your margin, if any, depends on your credit score, the HELOC amount, your initial draw and the LTV on your HELOC.

5 more factors to consider

There’s more than just low intro rates to think about when choosing a HELOC. Here’s what to consider before deciding on a lender:

  1. The length of promotional periods. If the introductory rate lasts for six months or more, it may be worth looking into. But check the rate that will apply to your HELOC after the introductory period — it’s usually the prime rate plus a margin.
  2. High maximum APRs. Since HELOCs have variable rates, yours may rise and fall with the market. Find out if your rate has a maximum cap so you don’t get caught with an unexpectedly high payment.
  3. Minimum draws. With some lenders, you’ll have to withdraw a minimum amount for a set time when opening your line of credit. This may work for you, but remember that the more you borrow, the more interest you’ll pay.
  4. Prepayment penalties and early closure fees. Many lenders will penalize you for closing or paying off your HELOC early, typically within three years. This is pretty standard in the industry, so check what the fees might be.
  5. Additional fees. Some lenders charge closing costs or annual, membership, maintenance and transaction fees which can add to the cost of having your HELOC. Always read the fine print and make sure the tradeoff in fees is worth it to you.

How high can my HELOC rate increase?

Since HELOC rates rise and fall with the prime rate, the maximum you can be charged depends on current rates and the rate cap set by your lender. Some lenders cap their rates at 8% APR, others at 18% APR — a big difference. This means that throughout a 20-year repayment period, your payments could rise or fall significantly.

To protect yourself against high interest rate shocks, talk to your lender about instituting a rate cap. This is the maximum interest rate you’d ever have to pay, regardless of what the prime rate is doing. You can also ask about fixing the rate on your outstanding balance. While you’ll likely pay a higher rate on a fixed line, your payments will be more predictable.

Alternatives to a HELOC

A HELOC isn’t the only way to tap into your home’s equity. There are also home equity loans, cash-out refinances and personal loans.

  • Home equity loan. This is a one-time lump sum loan with a fixed interest rate and even monthly payments with repayments terms of five to 30 years. Learn more about home equity loans or compare home equity loan lenders.
  • Cash-out refinance. A cash-out refinance is a mortgage that replaces your current mortgage with a higher amount. The difference between the two mortgages is the “cash out” amount. Learn more about how cash out refis work.
  • Personal loan. An unsecured loan from as low as $500 up to $100,000, but interest rates will likely be higher than for a home equity loan or refi. Compare the best personal loans for your needs.

Bottom line

With so many lenders vying for your business, you’re in a good position to find a HELOC with competitive rates, relationship discounts and no closing costs. Learn more about the ins and outs of HELOCs, including eligibility requirements, costs and fees.

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