Fixed-Rate HELOCs: How They Work and Who Offers Them

A home equity line of credit (HELOC) gives you revolving access to your home’s equity, letting you borrow, repay and borrow again during the draw period. Because a HELOC works more like a credit line than a traditional loan, most come with variable interest rates that change over time based on the prime rate.

However, some lenders now offer fixed-rate HELOC options, though they don’t all work the same way. A fixed-rate feature may apply to your entire balance, only part of it, or just for a limited introductory period. Understanding these differences can help you choose the right structure for your budget and financial goals.

Table of Contents

1. Are HELOC rates fixed or variable?
2. How fixed-rate HELOCs work
   1. 1. True fixed-rate HELOCs
      1. Example
      2. Where to get a true fixed-rate HELOC
   2. 2. Fixed-rate conversions
      1. Example
      2. Where to get a fixed-rate conversion
   3. 3. Fixed introductory rates
      1. Example
      2. Where to get a fixed intro-rate HELOC
3. Fixed-rate HELOC pros and cons
4. How to qualify for a fixed-rate HELOC
5. Frequently asked questions
   1. What’s the difference between a fixed-rate HELOC and a home equity loan?
   2. Can I get a fixed-rate HELOC with bad credit?
   3. Are fixed-rate HELOCs more expensive than variable-rate HELOCs?

Are HELOC rates fixed or variable?

Most HELOCs have variable interest rates tied to the prime rate. This is because a HELOC is a revolving credit line—your balance can change frequently as you draw and repay funds—so lenders typically use a rate structure that adjusts with overall market conditions.

That said, many lenders now offer some predictability through fixed-rate features, which may involve:

• A true fixed-rate HELOC
• Fixed-rate conversion options
• Fixed introductory rates

A lender advertising fixed rates can refer to any of these three structures, so it’s important to understand how they work.

How fixed-rate HELOCs work

Fixed-rate HELOC options fall into three main categories. The right fit depends on how much predictability you want and how you plan to use the credit line.

1. True fixed-rate HELOCs

A small number of lenders offer HELOCs with a fully fixed interest rate from day one, regardless of how the prime rate moves. These products function more like hybrid home equity loans: you receive a credit line, but the lender may require you to draw a set amount at closing—sometimes the entire line.

If the lender allows future draws, you’ll have to pay down some of your balance to earn some available credit. Those additional draws may also come with different fixed rates based on market conditions at the time.

Unlike traditional HELOCs, monthly payments on a true fixed-rate HELOC start immediately as principal and interest rather than interest-only.

Example

Say you’re approved for a $75,000 fixed-rate HELOC at 9%. You take the full draw at closing, and that balance stays at 9% for the life of the loan, with principal and interest payments beginning right away. A few years later, you decide to take another draw. Because market rates have fallen, the new draw comes in at 7%, and your monthly payment is updated to reflect the combined balances at both rates.

Where to get a true fixed-rate HELOC

2. Fixed-rate conversions

Some lenders offer standard variable-rate HELOCs with an option to convert part or all of your existing balance to a fixed rate. This option works well if you want the flexibility of a low initial variable rate but also want protection if rates rise.

Example

Imagine you withdraw $20,000 at a 7.99% variable rate. A few months later, rates begin climbing, and your lender offers a 9.5% fixed-rate conversion. Even though the fixed rate is a bit higher, locking it in can protect you from further increases. You can convert the full balance or just part of it, depending on how you feel about where rates are headed.

Where to get a fixed-rate conversion

3. Fixed introductory rates

Some lenders offer fixed rates for an initial period, such as six to 12 months—or in some cases, much longer—before the rate automatically shifts to variable. This is not the same as a conversion feature; introductory rates apply to new HELOCs and change automatically when the intro period ends.

A fixed intro rate can be attractive for short-term borrowing needs, such as a home project you plan to repay quickly. But once the intro period ends, your rate will fluctuate with the market unless the lender also offers a conversion option.

Example

Say a lender offers a 12-month introductory fixed rate of 4.99% on a HELOC. If you borrow $40,000 with your initial draw, you’ll have predictable payments during that first year. After the intro period ends, your remaining balance switches to a variable rate based on the prime rate and can rise or fall with the market, affecting your payment.

Where to get a fixed intro-rate HELOC

Use a marketplace to compare fixed-rate HELOC options

Online marketplaces like LendingTree can help you compare HELOC offers from multiple lenders at once, including those that offer fixed-rate options.

When reviewing results, pay close attention to whether a lender offers a true fixed-rate HELOC, a fixed introductory period, or a rate-lock feature on a variable HELOC.
These structures look similar at first glance but work very differently once you start borrowing.

Fixed-rate HELOC pros and cons

Fixed-rate HELOCs offer stability, but that stability can come with trade-offs. Here’s what to know before you apply.

Pros

• Predictable payments

  Your interest rate won’t change, making budgeting easier.

• Protection from rising rates

  Helpful in high-rate or uncertain-rate environments.

• Simplified planning

  Knowing your monthly payments helps with long-term projects and cash-flow planning.

Cons

• Higher initial rates

  Fixed HELOCs often start higher than variable options.

• Less flexibility

  Some lenders require a full initial draw and immediate repayment of principal and interest.

• No benefit from falling rates

  You won’t see lower payments if market rates drop.

Fixed-rate HELOCs make the most sense when you plan to borrow a large amount upfront, want payment stability, or expect interest rates to rise. But because fewer lenders offer fixed-rate HELOCs, finding the right fit may take extra research. Always compare rates, draw requirements, and repayment structures before applying.

How to qualify for a fixed-rate HELOC

Eligibility requirements for fixed-rate HELOCs are typically similar to standard HELOC criteria, including:

• Credit score: Many lenders look for scores in the mid-600s or higher, though stronger credit may secure better rates.
• Home equity: Many require at least 15% to 20% equity.
• Debt-to-income ratio (DTI): A DTI below 43% is common guidance, though some lenders may allow higher with compensating factors.

Because fewer lenders offer fixed-rate HELOCs, finding the right fit may take extra research.

Frequently asked questions

What’s the difference between a fixed-rate HELOC and a home equity loan?

A home equity loan provides a lump sum with a single fixed rate for the entire loan term and no option for reborrowing. A fixed-rate HELOC is still a revolving credit line with options for multiple draws, and the rate may apply to your whole balance, a converted portion, or only an introductory period.

Can I get a fixed-rate HELOC with bad credit?

Getting a fixed-rate HELOC with bad credit is possible, but it’s more challenging. If your credit is damaged, you may face higher rates, smaller credit limits, or fewer lender choices. Improving your credit, increasing your home equity, or applying with a co-borrower may help you qualify.

Are fixed-rate HELOCs more expensive than variable-rate HELOCs?

Often, yes. Fixed-rate HELOCs usually start at higher rates because lenders take on the risk of future rate increases. The trade-off is payment stability and protection from rising rates. However, a fixed-rate HELOC can help you save if market rates increase over time.

How we chose our fixed-rate HELOC recommendations

Since 2018, LendEDU has evaluated home equity companies to help readers find the best home equity loans and HELOCs. Our latest analysis reviewed 850 data points from 34 lenders and financial institutions, with 25 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.