A HELOC (home equity line of credit) lets you borrow against your home’s equity at rates significantly lower than credit cards or personal loans. But rates vary by 1–2% between lenders — and on a $100,000 HELOC, that difference is $1,000–$2,000/year in interest.
This guide compares HELOC rates across lender types, explains how rates are determined, and shows you how to get the lowest rate available.
Current HELOC Rates by Lender Type (2026)
Lender Type
Rate Range (Variable)
Typical Margin Over Prime
Closing Costs
Best Feature
Credit unions
6.5–8.5%
Prime – 0.5% to Prime + 1%
Often $0
Lowest rates, member-focused
Online lenders
7.0–9.0%
Prime + 0% to Prime + 1.5%
$0–$500
Fast application, competitive rates
National banks
7.5–9.5%
Prime + 0.5% to Prime + 2%
$0–$2,000
Convenience, relationship pricing
Regional/community banks
7.0–9.0%
Prime + 0% to Prime + 1.5%
$0–$1,000
Flexible underwriting, personal service
HELOC Rate Factors
How Your Rate Is Calculated
Component
Description
Current Range
Prime rate
Base rate set by banks (follows Fed Funds rate)
~7.5–8.5%
Your margin
Added to (or sometimes subtracted from) Prime based on your qualifications
–0.5% to +3.0%
Your HELOC rate
= Prime + margin
7.0–11.5%
What Determines Your Margin
Factor
Impact on Margin
How to Get the Best Margin
Credit score
Primary factor
760+: lowest margins; each tier below adds ~0.25–0.5%
Combined LTV ratio
Major factor
Lower LTV (more equity) = lower margin
Loan amount
Moderate
Larger HELOCs may get better pricing (lender earns more)
Banking relationship
Moderate
Existing customers often get 0.25–0.50% discount
Autopay enrollment
Small
0.25% discount is standard for most lenders
Property type
Moderate
Primary residence gets the best rate; investment property adds 0.5–1%
HELOC Rates by Credit Score
Credit Score
Typical Margin
Approximate Rate (Prime at 8%)
800+
Prime – 0.5% to Prime + 0%
7.5–8.0%
760–799
Prime + 0% to Prime + 0.5%
8.0–8.5%
720–759
Prime + 0.5% to Prime + 1.0%
8.5–9.0%
680–719
Prime + 1.0% to Prime + 1.75%
9.0–9.75%
660–679
Prime + 1.5% to Prime + 2.5%
9.5–10.5%
620–659
Prime + 2.0% to Prime + 3.0%
10.0–11.0%
HELOC Rates by Combined LTV (Loan-to-Value)
Combined LTV
Rate Impact
Example ($500K Home, $300K Mortgage)
Under 60%
Best rates (lowest margin)
HELOC up to $0 above mortgage (already at 60% LTV) — wait, the example here would be HELOC of up to $50K
60–70%
Good rates
HELOC up to $50K
70–80%
Standard rates (+0.25–0.5% vs. <60%)
HELOC up to $100K
80–85%
Higher rates (+0.5–1.0%)
HELOC up to $125K
85–90%
Highest rates (+1.0–1.5%); limited availability
HELOC up to $150K (few lenders go this high)
HELOC Fees Comparison
Fee
Range
Notes
Application fee
$0–$500
Many lenders waive this
Appraisal fee
$0–$500
Some use desktop/drive-by appraisals ($0–$150)
Closing costs
$0–$2,000+
Some lenders advertise “no closing costs” (may claw back if closed early)
Annual fee
$0–$75
Common at banks; less common at credit unions
Inactivity fee
$0–$50/year
Charged if you don’t use the HELOC for 12+ months
Early closure fee
$0–$500
Charged if you close the HELOC within 2–3 years
Draw fee
$0 (usually)
Most HELOCs have no per-draw fee
Best value: Credit unions often charge zero fees (no application, closing, or annual fees). National banks tend to charge the most fees but may waive them for relationship customers.
Draw Period vs. Repayment Period
Feature
Draw Period
Repayment Period
Duration
5–10 years
10–20 years
Can borrow?
Yes — up to your credit limit
No — repayment only
Minimum payment
Interest-only (most lenders) or small P+I
Full principal + interest
Payment example ($100K balance at 8%)
$667/month (interest only)
$836–$956/month (10–20 year repayment)
Payment shock risk
Low (interest-only is affordable)
High — payment jumps when repayment starts
Payment shock example: You’ve been paying $667/month (interest-only) on $100,000 at 8%. When the draw period ends, your payment jumps to $956/month (15-year repayment) — a 43% increase. Plan for this transition.
Fixed-Rate Conversion Option
Some lenders let you lock a fixed rate on all or part of your HELOC balance:
Feature
Variable HELOC
Fixed-Rate Conversion
Rate
Fluctuates with Prime
Locked at time of conversion (usually 0.5–1% higher than current variable)
Payment predictability
Changes with rate
Fixed for the lock period
When to use
When rates are falling or stable
When rates are rising or you want certainty
Typical lock terms
N/A
5, 7, 10, 15, or 20 years
Can you unlock?
N/A
Yes — convert back to variable (lender specific)
Availability
All HELOCs
~50% of lenders offer this feature
HELOC vs. Home Equity Loan vs. Cash-Out Refi
Feature
HELOC
Home Equity Loan
Cash-Out Refinance
Rate type
Variable (some fixed conversion)
Fixed
Fixed
Current rates
7.0–10.5%
7.0–10.0%
6.5–8.5%
Disbursement
Draw as needed (revolving)
Lump sum
Lump sum (replaces entire mortgage)
Best for
Ongoing/staged projects, flexibility
Known one-time expense
Very large amounts + rate improvement on existing mortgage
Closing costs
$0–$2,000
$2,000–$5,000
$3,000–$10,000+
Funding speed
2–6 weeks
2–6 weeks
3–8 weeks
Tax deductible?
Yes (if used for home improvement)
Yes (if used for home improvement)
Yes (if used for home improvement)
Payment flexibility
Interest-only option during draw
Fixed P+I from day 1
Fixed P+I
How to Get the Lowest HELOC Rate
Strategy
Savings Potential
Compare 5+ lenders (include credit unions)
0.5–2.0% lower rate
Improve credit score to 760+ before applying
0.5–1.5% lower margin
Keep combined LTV under 70% (borrow less)
0.25–0.75% lower margin
Ask about relationship discounts
0.25–0.50% for existing customers
Enroll in autopay
0.25% standard discount
Negotiate — tell lender you have a better offer from a competitor
0.25–0.50% potential match
Ask about promotional rates
Some offer 6-month intro rates 1–2% below standard
When a HELOC Makes Sense
Good Use
Why
Home improvement/renovation
Low rates, tax-deductible interest, increases home value
Emergency fund backup
Access cash only when needed; pay interest only on what you use
Debt consolidation (high-interest)
Replace 20%+ credit card debt with 7–10% HELOC
Education expenses
Lower rate than most private student loans
When a HELOC Doesn’t Make Sense
Bad Use
Why
Funding lifestyle spending (vacations, cars)
You’re putting your home at risk for depreciating assets
Investing in the stock market
If market drops, you still owe on the HELOC — and your home is at risk
You’re already financially stretched
HELOC adds debt; if income drops, you could lose your home
Home values are declining in your area
Falling values could leave you underwater
The Bottom Line
HELOC rates in 2026 range from 7–10.5%, with credit unions and online lenders typically offering the best rates. Your credit score, combined LTV, and lender choice make the biggest difference — comparing 5+ lenders can save you 0.5–2% on your rate, which translates to $500–$2,000/year on a $100,000 HELOC.
If rates concern you, ask about fixed-rate conversion options. And always plan for the payment transition from draw period to repayment period — it’s the #1 HELOC surprise for borrowers.
WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy
