Best HELOC Rates in Tennessee (December 2024)

Key Takeaways

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Higher loan-to-value (LTV) ratios lead to higher rates. The average APR for a HELOC in Tennessee with an 80% LTV is 8.2%, compared to 8.8% for a 90% LTV.

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HELOC rates vary by city in Tennessee. Lyles has an average APR of 4.8%, whereas Lake City's is 10.6%.

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Different lenders offer varying rates for the same loan limits. Listerhill Credit Union's average APR is 4.0%, whereas Pinnacle Bank's is 11.8%.

Current HELOC Rates in Tennessee

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HELOC rates in Tennessee rose from 4.2% in 2021 to 8.7% by November 2024. With rates consistently climbing, homeowners considering a HELOC might benefit from locking in current rates to avoid paying more in the future.

HELOC Rates in Tennessee by LTV Ratio

HELOC rates in Tennessee vary based on your loan-to-value (LTV) ratio and line limit. Lenders view a lower LTV as less risky, as you have more equity. For instance, with an 80% LTV, you've borrowed less against your home compared to a 90% LTV, reducing the chance to default on your HELOC.

The following table lets you filter between different loan amounts, offering a clearer view of what you may qualify for:

Data filtered by:Results filtered by:
Line Limit:
Line Limit:$100,000
8.2%8.9%

HELOC Rates in Tennessee by City

HELOC rates in Tennessee vary between cities due to local housing markets and lender competition. For instance, cities with stable real estate markets may offer lower rates, reducing lender risk.

Use the table below to filter by your city and see average APRs for $50K and $100K HELOCs.

Data filtered by:Results filtered by:
City:
City:Nashville
$100,0008.7%
$50,0008.7%

HELOC Rates in Tennessee by Lender

HELOC interest rates in Tennessee differ among lenders due to varying pricing strategies and risk assessments. Compare competitive rates by reviewing the table below, which highlights the five lenders in Tennessee offering the lowest average APRs.

Listerhill Credit Union4.0%
United Community Bank4.8%
SmartBank5.6%
Cornerstone Financial Credit Union6.8%
Leaders Credit Union7.0%

HELOC rates today can vary between lenders even in the same city. Use the table below to filter by city and compare APRs to find the best rate in your area.

Data filtered by:Results filtered by:
City:
City:Nashville
United Community BankCommercial Bank4.8%
Synovus BankCommercial Bank7.4%
American Airlines Federal Credit UnionCredit Union7.7%
Southeast Financial Credit UnionCredit Union7.8%
Ascend Federal Credit UnionCredit Union7.8%
Enbright Credit UnionCredit Union7.8%
Wilson Bank & TrustCommercial Bank7.8%
Volunteer State BankCommercial Bank8.0%
US Community Credit UnionCredit Union8.0%
FirstBankCommercial Bank8.0%
Republic Bank & Trust CompanyCommercial Bank8.3%
Fortera Federal Credit UnionCredit Union8.3%
Old National BankCommercial Bank8.5%
Cadence BankCommercial Bank8.5%
First Farmers and Merchants BankCommercial Bank8.5%
First Horizon BankCommercial Bank8.5%
First Vision Bank of TennesseeCommercial Bank8.5%
Regions BankCommercial Bank8.5%
Bank of TennesseeCommercial Bank8.8%
First South Financial Federal Credit UnionCredit Union9.0%
Simmons BankCommercial Bank9.2%
U.S. Bank National AssociationCommercial Bank10.4%
Truist BankCommercial Bank10.6%
Fifth Third BankCommercial Bank10.9%
Bank of AmericaCommercial Bank11.0%
Pinnacle BankCommercial Bank11.8%
COMPARING HELOC RATES IN TENNESSEE: BANKS VS. CREDIT UNIONS

HELOC rates in Tennessee vary between banks and credit unions. Currently, commercial banks in Tennessee offer HELOC rates averaging 8.5%, while credit unions offer slightly lower rates at an average of 8.2%. Credit unions, as not-for-profit institutions, often provide more competitive rates compared to banks.

When choosing between the two, consider more than just rates. Banks may offer more convenience, but credit unions often have better customer service and lower fees. Also, check membership requirements for credit unions and any hidden fees or rate adjustment clauses with both lenders.

Expert Answers About HELOCs

What are the common fees or costs associated with HELOCs that borrowers should be aware of, and how do these affect the overall cost of borrowing?

Credit & Mortgage Expert

Most banks and credit unions charge little to no fees when getting a HELOC. Typically, you will pay the cost of the appraisal — anywhere from $150 to $450 depending on the type of appraisal done. But closing costs are usually covered by the bank or credit union. This is why it’s best to shop around with at least three different lenders when applying for a HELOC to compare not only the rates but also any costs involved. Getting a rate that is 0.25% lower but having to pay a couple thousand dollars in costs may not make financial sense.

HELOC Payment Calculator

HELOCs have become a popular tool for homeowners across the U.S. looking to tap into their home's equity. Use our Tennessee HELOC payment calculator to determine your monthly payments based on the amount drawn, APR and loan terms. Our calculator also provides a full amortization schedule, showing how much goes toward interest and principal over time. Understanding these details can help you manage your HELOC and plan for future payments.

Tennessee HELOC Payoff Calculator

This HELOC payment calculator assumes that you take out one lump sum at the start of your interest-only period. Your actual payoff schedule will vary depending on your interest rate and market conditions.

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Repayment Period Payment

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Credit Payoff Schedule for Home Equity Line

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How to Get the Best HELOC Rates in Tennessee

Finding the best HELOC rates in Tennessee can help you save thousands over the life of your loan. To secure the most competitive rate, consider these five strategies:

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    Maintain a strong credit score

    The average credit score in Tennessee is 705. Improving it can help you secure more competitive HELOC rates.

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    Compare offers from multiple lenders

    Settling for the first offer you receive may be costly. By shopping around, you can find competitive rates and even use offers to negotiate better terms.

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    Reduce your debt-to-income (DTI) ratio

    Lenders favor borrowers with lower debt-to-income (DTI) ratios because it shows financial stability. Reducing your debt can make you a more attractive candidate for a lower rate.

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    Increase your home equity

    The more equity you have, the less risk the lender assumes, which can lead to a lower rate. Paying down your mortgage or making home improvements can increase your equity.

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    Review closing costs and rate caps

    Some lenders charge closing costs between 2% and 5%, whereas others don't. Compare rate caps to limit your costs as rates adjust over time.

HELOC Loan Rates vs. Home Equity Loan Rates in Tennessee

HELOC interest rates in Tennessee average 8.4%, compared to 7.7% for home equity loans. This difference arises from the rate structures, with HELOCs having variable rates and home equity loans offering fixed rates.

- HELOCs are flexible, revolving credit lines with variable interest rates that can change with market conditions. In rising interest rate environments, HELOC rates may increase, potentially impacting homeowners' finances over time.

- Home equity loans provide a lump sum at a fixed rate, remaining stable over the loan's term. This makes them preferable for those seeking financial certainty.

When deciding between these options, consider your need for flexibility versus the stability of fixed payments. Evaluate how changes in interest rates might affect your budget and whether you prefer the predictability of a fixed rate or the flexibility of accessing funds as needed. Assessing equity in your home can also guide your decision.

CONSIDERING A HELOC ALTERNATIVE? TRY A CASH-OUT REFINANCE

A cash-out refinance is a HELOC alternative that replaces your existing mortgage with a new, larger loan, allowing you to access cash. Unlike HELOCs or home equity loans, it creates a new primary mortgage.

For example, if you have a loan backed by the Federal Housing Administration (FHA) and your home is valued at $300K with a $150K mortgage balance, an FHA cash-out refinance for $200K gives $50K cash, with payments based on $200K.

FAQ: Best HELOC Rates in Tennessee

What are the current HELOC rates in Tennessee and how do they compare to national rates?

What fees are commonly associated with HELOCs in Tennessee?

How do HELOC rates in Tennessee compare to home equity loan rates?

How do HELOC Rates in Tennessee vary between banks and credit unions?

What's the best HELOC rate in Nashville? How does it compare to the current HELOC rate in Tennessee?

MoneyGeek examined 97 different banks and credit unions in Tennessee using S&P Global's SNL Depository Rates dataset to stay current on the latest home equity line of credit rates.

This data is accurate as of October 29, 2024.

97Lenders Analyzed

About Zachary Romeo, CBCA


Zachary Romeo, CBCA headshot

Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.