Best HELOC Loans and Rates of 2024
Updated: April 16, 2024
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APRs influence your repayments and the overall cost of a HELOC. Competitive ones can reduce your monthly payments and save money in the long term. MoneyGeek’s analysis identified Aven, PNC Bank and TD Bank as leading lenders for the best HELOC rates, with APRs starting as low as 7.99%, 8.22% and 8.34%, respectively.
While the lowest APR is a prime reason these lenders stand out, the total cost also depends on other features such as rate discounts and absent fees. Each lender has its own set of advantages and drawbacks, so review their terms to find the HELOC that best suits your financial needs.
Top HELOC Lenders With Competitive Rates
- Aven
- 7.99% to 15.49%APR Range
- 620Minimum Credit Score
- Up to $250,000Loan Amount Range
- Unlimited draw period; 5 to 10-year repayment period for cash out;Repayment Terms
- NoneAnnual Fees
Aven's HELOC, with APRs from 7.99% to 15.49% for borrowers with a minimum credit score of 620, is a standout choice for homeowners. Aven offers a credit card backed by your home's equity, providing a nifty 2% unlimited cashback on purchases and a 0.25% rate cut for autopay, without origination, annual fees or prepayment penalties. Its product is a hybrid HELOC that functions similarly to a credit card but is reported as a HELOC to credit bureaus. Drawbacks include a maximum line limit of $250,000 and a one-time 2.5% fee for direct cash out to a bank. The card usually arrives in 10 business days. Unlike some lenders, Aven doesn't offer hardship assistance, which could be a concern during financial bumps.
Pros
- Credit card backed by home equity
- Unlimited 2% cashback on purchases
- No origination, annual or prepayment fees
Cons
- Limited line of $250,000
- 2.5% cash-out fee
- Card takes 10 days to arrive
Aven
- PNC Bank
- 8.22% to 14.5%APR Range
- UndisclosedMinimum Credit Score
- $10,000 to $1,000,000Loan Amount Range
- Undisclosed draw period; 5-30 year repayment periodRepayment Terms
- $50Annual Fees
PNC Bank is a standout for homeowners seeking a flexible HELOC with competitive rates from 8.22% to 14.5%. They allow customers to switch from variable to fixed rates and offer a 0.25% rate reduction for autopay from a PNC account. Borrowers benefit from fee reimbursements including valuation and property search, have the opportunity to borrow up to $1 million and get support during financial hardships. The intuitive online tracker streamlines the application process. However, a $50 annual fee applies and borrowers in California and New York must pay origination fees. Some information, such as minimum credit scores and detailed repayment terms, is not disclosed upfront.
Pros
- Offers variable/fixed rate switching
- Autopay rate reduction available
- Up to $1 million borrowing limit
Cons
- Annual fee of $50 applies
- Origination fee in certain states
- Lacks transparency on key terms
PNC Bank
- TD Bank
- 8.34% to 12.69%APR Range
- UndisclosedMinimum Credit Score
- Starting at $25,000Loan Amount Range
- UndisclosedRepayment Terms
- $50Annual Fees
TD Bank offers HELOCs with APRs ranging from 8.34% to 12.69%. It's a solid choice, granting a fixed rate option and a 0.25% rate discount for those with a TD bank checking account. These features can lead to stable payments and potential savings. Nevertheless, TD Bank limits its HELOC availability to 16 states and keeps some pivotal details under wraps like minimum credit score. Minimum borrowing starts at $25,000, coupled with a $50 annual fee. These factors might limit options or slightly increase the cost for some borrowers.
Pros
- Fixed-rate options available
- Rate discounts with TD checking account
- Early closure penalties limited to first 2 years
Cons
- Minimum loan amount is $25,000
- Charges a $50 annual fee
- Only available in 16 states
TD Bank
What’s a Good HELOC Rate?
As of April 2024, average HELOC interest rates are at 7% nationally. This rate measures the interest cost of borrowing, while the slightly higher national average annual percentage rate (APR) of 7.1% represents the total cost of borrowing, including additional lender fees and expenses over the loan's term. APR offers the most accurate reflection of your overall expenses at the end of the day.
Remember that the rate you receive for a HELOC can differ based on your location, credit score and loan-to-value (LTV) ratio. Use the rate table to see how these factors may influence the rates and APRs available to you.
Factors Affecting HELOC Rates
Home equity lines of credit (HELOCs) typically come with variable rates, meaning your interest rate can change over time. While some lenders might offer fixed-rate HELOCs, these are rare. Knowing what influences HELOC rates will help you find the best deal and save money.
How to Get the Most Competitive HELOC Rates
Securing a competitive HELOC rate can significantly lower your borrowing costs over time. Homeowners can take actionable steps to improve their chances of getting a favorable rate.
Check and improve your credit score
Obtain your credit report and address any inaccuracies. Improving your credit score is key as lenders offer lower rates to borrowers with higher scores due to perceived lower risk.
Lower your debt-to-income ratio
Pay down existing debts to improve your debt-to-income (DTI) ratio. A lower figure indicates that you're less of a financial risk, potentially qualifying you for better rates.
Increase home equity
The more equity you have in your home, the less risk you pose to lenders. Consider making additional payments on your mortgage to increase your equity before applying for a HELOC.
Shop around
Don't settle for the first offer. Compare HELOC rates from multiple lenders, including banks, credit unions and online lenders, to find the most competitive rates.
Negotiate
Use the quotes you receive as leverage to negotiate better terms. Lenders may be willing to adjust rates or fees to win or retain your business, especially if you have a solid financial profile.
Consider a co-signer
Adding a co-signer with a better financial profile can help you secure lower rates. Ensure that the co-signer understands the responsibilities at hand; they become equally accountable for loan repayment if you're unable to fulfill it.
Stay informed about market rates
Knowing the current market conditions can help you time your application for the best possible rates.
When you're ready to take the next step and begin comparing the best HELOC lenders, you'll make the most of this experience and get the biggest bang for your buck by engaging with lenders when your financial profile is at its strongest. For HELOC borrowers, if your credit report and score are strong, your debts low and manageable, and you've established significant equity in your home, you'll be better set up to have lenders compete for business, thus helping you secure the best rate and lowest fees you can. — Timothy Manni, Mortgage and Real Estate Consultant
Frequently Asked Questions About the Best HELOC Loans and Rates
Being familiar with all the details about HELOCs can empower homeowners to make informed financial decisions. We've addressed common questions, shedding light on securing the best loans and rates. Use this knowledge to ensure your financial decisions are strategic and beneficial.
A reasonable HELOC rate will depend on how strong your credit score is, whether you have low debt, the amount of equity you have in your home and more. Be sure to compare rates and fees to get the best rate you can.
Yes, lenders might adjust rates or fees to secure your business, especially if you present competitive offers from other institutions.
HELOC rates fluctuate every month, often linked to the Prime Rate, which adjusts according to the Federal Reserve's interest rate determinations.
The lender may initiate foreclosure to recover the borrowed amount. It's important to communicate with your lender early if you're facing financial difficulties.
Some lenders might allow you to switch from variable rates to fixed-rate HELOCs during the loan term. However, this is an exception rather than a standard practice. HELOCs are usually variable-rate products.
Yes, you can refinance a HELOC to get a better rate, especially if your credit score has improved and market rates have dropped since you first secured it.
HELOCs typically come with various fees, including application, appraisal and, in some cases, annual fees. Understanding the HELOC closing costs is also essential to assess the total cost of the loan.