Fixed-Rate HELOCs: How They Work and Where to Get One

Most home equity lines of credit (HELOCs) have variable rates, partly because HELOC draw periods can last several years and partly because variable rates benefit the lender when interest rates rise. Because of those fluctuating rates, variable-rate HELOCs often have fluctuating payments, too.

Fixed-rate HELOCs, while less common, offer stability and consistency. If you prefer predictable monthly payments, consider the best fixed-rate HELOC lenders below, including two that offers fixed rates for the entire term, one with an introductory fixed rate, and an online marketplace that lets you compare multiple lenders in one spot.

Reviews of the best fixed-rate HELOC lenders

Check out our reviews of the top lenders for fixed-rate home equity lines of credit.

Figure

Best fixed-rate HELOC

4.9 _/5

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Why it’s one of the best

Figure is an online HELOC provider that offers fixed-rate HELOCs exclusively, making it a top choice for borrowers who want predictable monthly payments. Figure also offers funding in as little as five days; other lenders can take weeks to provide funds.

When you apply, Figure will give you multiple term and interest-rate options. If you plan to draw most or all of your credit line at closing, Figure is terrific because it requires an initial draw of 100%. Depending on current interest rates, you can make additional draws down the line, but you might have a different fixed rate for that amount.

A benefit of working with Figure is the ease of verifying your income and assets. You can link your financial accounts from the Figure app or website to allow the company access to your financial information. That lets Figure offer same-day approval for many of its loans.

• Prequalify for a fixed-rate HELOC with no impact on your credit
• Get approved in as little as 5 minutes, with funding in as few as 5 days

• Must borrow 100% of your credit line at initial draw, with the option to redraw as you pay down the debt

HELOC details

Min. credit score	640
Max. LTV	95%
Draw period	2 – 5 years
Repayment period	5, 10, 15, or 30 years
Fees	Origination fee of up to 4.99%

Aven

Best customer reviews for a fixed-rate HELOC

4.8 _/5

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Why it’s one of the best

Aven‘s traditional HELOC product is an excellent fixed-rate option for homeowners seeking predictable payments and flexible access to their home equity. Aven offers fixed interest rates throughout the life of the loan, providing peace of mind in a fluctuating market. The application process is digital, allowing for quick approval times, and you can secure funds in as little as 15 minutes. Aven also offers a lowest rate guarantee and optional protection programs, which can cover your minimum payments for up to six months in case of unemployment.

However, Aven’s 4.90% first-draw fee may be higher than many other lenders, and eligibility depends on your location. Still, Aven’s commitment to fixed rates and quick digital processing makes it an appealing option for those looking to lock in a stable rate for their home equity needs.

• Optional debt protection program through Securian
• Increases credit line for select customers
• Automated appraisals
• High maximum loan-to-value ratio (LTV) 3-day funding after signing
• Fixed interest rates from start to finish
• Check your rate with no credit impact

HELOC details

Min. credit score	640
Max. LTV	89%
Draw period	5 years
Repayment period	5, 10, 15, or 30 years
Fees	4.90% first-draw fee
State availability	Not available in CT, DE, GA, HI, ID, IN, MD, MA, MO, MT, NV, NY, RI, SC, TX, VT, WA, or WV

Bethpage FCU

Best credit union

4.7 _/5

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Why it’s one of the best

Bethpage Federal Credit Union is a national credit union that offers a variable-rate HELOC with an introductory fixed rate, plus the option to convert parts of your balance to a fixed-rate loan. The minimum initial draw to qualify for the introductory rate is $25,000.

You’re limited to three fixed-rate loan option balances at one time, and the minimum to convert is $10,000 each. No additional costs apply to convert your balance. Once converted, you can repay the balance over 20 years.

• Introductory fixed rate of 6.99% APR for 12 months
• Convert your variable-rate balances into a fixed-rate loan option, with as many as 3 fixed-rate loan balances at one time
• Takes more than a month (an average of 35 days) to access funds

HELOC details

Min. credit score	670
Max. LTV	75%
Draw period	10 years
Repayment period	5, 10, or 20 years (variable rate)
Fees	No application, origination, appraisal, or closing costs

LendingTree

Best marketplace for fixed-rate HELOCs

4.5 _/5

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Why it’s one of the best

LendingTree is an online marketplace where you can compare lenders to find the best deal on variable- or fixed-rate HELOCs. Based on your credit profile and needs—such as credit score, loan amount, and repayment terms—LendingTree can serve up specific HELOC offers you prequalify for.

Because LendingTree works with a wide range of lenders, there’s no set credit score you need to browse for offers. The details of the HELOC will vary by lender.

• Easily compare lenders you prequalify with in one spot with one simple application
• Find options even if you have a spotty credit history
• Offers are limited to LendingTree’s partners, so you won’t see all potential lenders that could meet your needs

HELOC details

Min. credit score	670
Max. LTV	75%
Draw period	10 years
Repayment period	5, 10, or 20 years (variable rate)
Fees	No application, origination, appraisal, or closing costs

To compare other options, check out our guide to the best HELOCs.

How does a HELOC with a fixed rate work?

A home equity line of credit works much like a credit card with revolving credit, only your home serves as collateral. With a HELOC, you borrow against the equity you’ve built in your home. You’ll have a draw period during which you can make an initial withdrawal from your available credit, but you can continue to make additional draws until the end of the draw period, up to your borrowing limit. You’ll typically make interest-only payments during this time.

If you hit your borrowing limit, you can repay a portion of your outstanding balance to create available credit to use once again. At the end of the draw period, you can no longer borrow. Your repayment period will begin; you must repay the principal (how much you borrowed) plus interest. The amount depends on the interest rate.

With a fixed-rate HELOC, that interest rate remains the same for the entire repayment term, much like a typical fixed-rate mortgage. So monthly payments are predictable, and it’s easy to calculate how much interest you’ll pay.

Fixed-rate HELOCs are uncommon, but some lenders may allow you to convert a portion of your balance to a fixed rate during the life of the loan. Typically, the fixed rate is higher than the introductory rate of a traditional (i.e., variable-rate) HELOC.

Fixed-rate HELOCs vs. variable-rate HELOCs

So how is a fixed-rate HELOC different from variable-rate HELOCs? Variable-rate HELOCs have an interest rate tied to a benchmark rate, often the prime rate, to which lenders add percentage points to establish a rate range. For example, the lowest variable rate could be prime + 1.5%, and the highest could be prime + 7.0%. The rate helps determine the monthly payment. 

Variable rates can benefit borrowers when interest rates are low and remain so. However, when interest rates rise, the HELOC variable rate can increase. As the rate increases, so does the monthly payment due on the HELOC, which could strain your budget. 

What is a fixed-rate option on a variable-rate HELOC?

Some lenders may allow you to convert a variable-rate HELOC to a fixed-rate HELOC. Though the terms and requirements can vary by lender, here’s generally how to convert a HELOC to a fixed-rate loan:

1. Check with your lender: Visit your lender’s website, review your HELOC’s fine print, or call the lender to understand whether a conversion is possible.
2. Review the details: If a lender allows you to convert, be sure you understand the rate, repayment term, and monthly payments you’ll agree to. You might also pay a fee for this service.
3. Refinance elsewhere: If you dislike the offer or your lender doesn’t offer conversions, you can refinance your HELOC with another lender.

As an alternative, some variable-rate HELOCs may allow you to apply for fixed rates on specific draws during the draw period (called a rate lock). Lenders that offer this option may have specific requirements, such as minimum draw amounts.

The graphic below details a scenario where a borrower exercises multiple draws from a $100,000 variable-rate loan. As you can see, the borrower locks two draws at a fixed rate: a $30,000 draw at 9.95% and an $11,000 draw at an 8.5% rate. She doesn’t choose a fixed rate for the second borrowing instance (a kitchen remodel) because she wants to make multiple draws as she goes and can’t commit to a set amount.

What are typical fixed HELOC rates?

Fixed-rate HELOCs tend to have higher interest rates than the initial rate of a variable-rate HELOC. This allows the lender to still make decent money off borrowers, even if variable rates go up.

Fixed-rate HELOCs generally have higher origination and maintenance fees, for this same reason.

The interest rates for fixed-rate HELOC depend on the lender, your credit score, your borrowing amount, and the repayment period you select. In September 2024, the most attractive fixed rates are around 7.5%, but bear in mind that this is for the most qualified borrowers.

How do I get the best fixed HELOC rates?

Lenders offer the most competitive rates to the most qualified borrowers. For HELOCs, that means a strong credit score and a low loan-to-value ratio. If your credit score has room for improvement—and you don’t need a HELOC immediately—focus on improving your credit score for a few months by making on-time payments and paying down your debt. You can also request a smaller credit limit to potentially get a lower interest rate.

Once your credit score is in good shape, shop with multiple HELOC lenders to see which will offer you the most competitive rates. But remember to compare more than interest rates. Also analyze origination fees, maintenance fees, and other account fees that can make an impact on your line of credit, and compare available loan terms, loan amounts, and typical funding speeds.

Pros and cons of fixed-rate HELOCs

Fixed-rate home equity lines of credit offer several advantages but also have a few downsides.

Pros

• You’ll have predictable monthly payments.

• You can calculate how much interest you’ll pay upfront.

• You can potentially qualify for low fixed rates if you have strong credit.

Cons

• Rates may be higher—and stay higher—than with variable-rate HELOCs.

• Additional fees may apply to a fixed-rate HELOC.

• They’re not common, so your choice of lenders is limited.

Is a fixed-rate HELOC right for you?

Still unsure whether a fixed-rate HELOC is the right option for you? Let’s break down when they make sense and when you may have better alternatives.

Consider a fixed-rate HELOC if…	Reconsider a fixed-rate HELOC if…
You’re borrowing for a long-term project.	You’re borrowing for short-term needs.
You plan to borrow a significant amount.	Interest rates are high, and you think they might drop soon.
Your budget can’t handle sudden changes.	You expect to repay the loan quickly and want to avoid the higher rates of a fixed-rate HELOC.

When to consider a fixed-rate HELOC

Here are a few scenarios where using a fixed-rate HELOC instead of a variable rate makes sense:

• Long-term projects
• Large HELOCs
• Economic uncertainty

Long-term projects

A fixed-rate loan can reduce stress if you have a project that will take a while, such as a home improvement.

With a variable-rate loan, you can feel like you’re racing to finish your project and pay it off before interest rates rise. You don’t need to worry about rates and your monthly payment increasing if you have a fixed-rate HELOC. That gives you more time to finish the project.

Large HELOCs

The more you need to borrow, the longer you can expect to need to pay off the HELOC. Large HELOCs are more sensitive to rate increases because even a slight increase can raise your payments.

If you’re borrowing a large amount, a fixed rate can help protect you from the effects of rate changes, which are more likely the longer you take to repay the HELOC.

Economic uncertainty

Variable rates are desirable when you’re financially secure and can weather changes in the interest rate or monthly payment. If you’re in an uncertain position—for example, if you just lost a source of income—a fixed rate’s predictability is valuable.

If you’re in a less-than-stable financial position, a fixed-rate HELOC can provide consistency in your loan payment.

When to avoid a fixed-rate HELOC

These are three scenarios where it might be better to stick with the variable rate:

• Short-term borrowing
• When rates are high
• You plan to repay the line of credit quickly

Short-term borrowing

Variable-rate HELOCs might have lower interest rates because the lender compensates customers for the uncertainty. For instance, if you expect to repay the money you borrow in a year, you may save money by sticking with a variable-rate HELOC.

But this depends on the rate forecast. If you anticipate rates rising in the next 18 to 24 months, consider whether you could repay the loan in that time. Otherwise, you might face a much higher rate and monthly payment if the Federal Reserve raises rates.

If you can’t pay a HELOC within a year, you could refinance it into a new fixed-rate loan. That only makes sense if the new HELOC rate is lower than your current rate. You’d also need to consider your net savings if you’d pay fees to refinance. 

When interest rates are high

Sometimes rates are high, and sometimes they’re low. You can’t predict the future, but a variable-rate loan can let you take advantage of a future rate reduction if you feel rates are about to drop.

If you lock in a fixed-rate HELOC when rates are high, you’re stuck with that rate for the life of the HELOC. If you use a variable-rate HELOC and market interest rates decrease, you can save money and reduce your monthly payment.

Quick repayment plans

If you plan to repay your HELOC quickly, you might reconsider a fixed-rate option. While fixed-rate HELOCs provide payment stability, they often have higher rates. If you expect to pay off the loan within a short period, you could benefit from the lower initial rates of a variable-rate HELOC, avoiding the higher costs associated with a fixed rate.

Our expert’s advice: When a home equity loan or cash-out refinance might be better than a fixed-rate HELOC

Erin Kinkade

CFP®

If you know the specific amount you need, don’t need the funds quickly, and have good credit, a home equity loan may be better than a potentially higher fixed-rate HELOC. If you’re looking to obtain better terms and need a cash payout, the cash-out refinance may be the better option. Ultimately (as we all know), it depends on your needs and financial condition.

FAQ

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

Fixed-rate HELOCs are typically more expensive at the start because you pay a premium for the stability they offer. The interest rate on a variable-rate HELOC is tied to a benchmark rate (such as the prime rate), so it can increase or decrease over time, which means if rates increase, a fixed-rate HELOC can be a cheaper option.

Can I refinance a fixed-rate HELOC?

You can refinance fixed-rate HELOCs. When you refinance, you replace your line of credit with a new one. You should first contact your current lender to see whether you can modify your current terms to avoid new fees.

If your lender doesn’t allow you to modify your terms, you can comparison shop online to look for a HELOC or home equity loan with better terms to pay off the current one. Make sure to consider fees before proceeding.

If you convert a variable-rate HELOC, is it still a HELOC?

If you convert a variable-rate HELOC to a fixed rate, it’s still considered a HELOC—but it’s now a fixed-rate HELOC. Fees may be associated with this conversion; work with your lender to understand the new terms, rate, and fees.

How we selected the best fixed-rate HELOC lenders

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.

Recap of the best fixed-rate HELOCs