Best Fixed-Rate HELOCs

A home equity line of credit (HELOC) is a convenient way to turn the equity you have in your home into cash when you need some extra money. HELOCs allow you to borrow against your investment in your house, using the house as collateral.

One potential drawback of HELOCs is that they typically have variable interest rates. With a variable interest rate, your lender can increase or decrease the rate at any time. You might find yourself suddenly paying more each month than you had expected, which can hurt your budget.

That said, there are lenders that offer fixed-rate HELOCs, or let you convert variable rates to fixed rates. This review covers some of our picks for the top lenders that offer fixed-rate home equity lines of credit.

On this page:

• 4 of the best lenders for fixed-rate HELOCs
• Pros & cons
• When using a fixed-rate HELOC makes sense
• When you should avoid using a fixed-rate HELOC
• How to convert your variable-rate HELOC to a fixed-rate HELOC

4 of the best lenders for fixed-rate HELOCs

Not every lender offers fixed-rate HELOCs, but the ones that we’ve listed below, do. Note that most lenders base eligibility for fixed rates on a variety of factors, including your credit score and your loan-to-value (LTV) ratio.

Your loan-to-value ratio is the ratio of the amount you borrow compared to the value of the home. For example, if you’re borrowing $100,000 and the home is worth $200,000, your LTV ratio is 50%.

Typically, lower LTV ratios make it easier to qualify for a HELOC.

Figure

Figure is an online HELOC provider that offers funding in as little as five days. Other lenders can take weeks to provide you with funds.

Figure lets you apply for a fixed-rate HELOC right out of the gate. You don’t have to get a variable-rate HELOC and convert it to fixed. When you apply, Figure will give you multiple term and interest rate options so you can choose the best one for your needs. Additional HELOCs will also be at fixed rates, but those rates will be subject to current market conditions.

One nice perk of working with Figure is that it’s easy to verify 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.

• Fixed rates on new lines: Yes
• Convert variable to fixed: No
• Minimum credit score: 640
• Maximum LTV: 80%
• Draw period & repayment: Draw period of 5 years. Repayment period of 5, 10, 15, or 30 years
• Discounts: Borrowers can receive a 0.75% discount. There is a 0.25% discount if you enroll in automatic payments and a 0.50% discount for opening a Quorum account.
• Fees: An origination fee up to 4.99%

>> Learn more about Figure’s fixed-rate HELOC on its website.

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M&T Bank

M&T Bank is a major bank that lets you turn portions of your HELOC balance into fixed-rate loans.

When you apply for a CHOICEquity HELOC from M&T Bank, you can use your home’s equity as a source of quick cash. Once you’ve tapped the HELOC for money, you can turn a portion of your balance into a fixed-rate loan. M&T lets you create up to three fixed-rate loans out of your HELOC balance in total.

When you convert your balance to a fixed-rate loan, you have the option of making full payments or continuing interest-only payments until the draw period for your HELOC ends. This gives you some flexibility in your monthly budget. The loan also comes with no closing costs.

• Fixed rates on new lines: No
• Convert variable to fixed: Yes
• Minimum credit score: Not disclosed
• Maximum LTV: 85.99%
• Draw period & repayment: Draw period of 10 years. Repayment period up to 20 years
• Discounts: Not disclosed
• Fees: No annual, application, or closing cost fees

>> Learn more about M&T Bank’s HELOC on its website.

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Regions

Regions Bank is based in the Southern and Midwestern United States. It offers variable-rate HELOCs with the option to convert to fixed-rate loans.

Like most lenders, when you apply for a HELOC with Regions, the line of credit comes with a variable interest rate. During the life of your loan, you can convert a portion of your balance to a fixed-rate loan. You can create up to ten fixed-rate loans out of your HELOC, each with a balance as low as $5,000.

• Fixed rates on new lines: No
• Convert variable to fixed: Yes
• Intro APR: 0.99% for 6 months
• Minimum credit score: Not disclosed
• Maximum LTV: 80%
• Draw period & repayment: Draw period of 10 years. Repayment period up to 20 years.
• Discounts: 0.25% for automatic payments and 0.25% for having a bank account with Regions
• Fees: 5% late fee ($29 minimum, $100 maximum) and a $100 fee to convert a variable-rate balance to a fixed-rate loan

>> Learn more about Regions’ HELOC on its website.

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SunTrust

SunTrust is an Atlanta-based bank that offers variable-rate HELOCs with the option to convert to a fixed rate.

When you open a HELOC, you get a variable interest rate that you will pay on the money you draw. When you decide to draw from the line of credit, you have the option to convert the balance you are drawing to a fixed-rate loan.

When you take a fixed-rate draw from your HELOC, you can choose from one of four repayment terms.

• Fixed rates on new lines: No
• Convert variable to fixed: Yes
• Minimum credit score: Not disclosed
• Maximum LTV: 70%
• Draw period & repayment: Draw period of 10 years. Repayment period up to 20 years
• Discounts: 0.25% automatic payment discount
• Fees: $15 fee for each fixed-rate draw

>> Learn more about SunTrust’s HELOC on its website.

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

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Pros & cons of fixed-rate HELOCs

When using a fixed-rate HELOC makes sense

There are a few scenarios when using a fixed-rate HELOC instead of a variable-rate one makes sense.

Long-term projects

If you have a project that you expect to take a while, like a home improvement project, a fixed-rate loan can reduce some of the stress of the project.

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

Large HELOCs

The more that you need to borrow, the longer it will probably take to pay off the HELOC. Large HELOCs are also more susceptible to interest rate increases because even a small increase in the interest rate can significantly up your HELOC costs.

If you’re borrowing a large amount of money, a fixed rate can help protect you from the effects of interest rate changes, which are likely to happen if you’re going to take a long time to repay the HELOC.

Economic uncertainty

Variable rates are good when you’re financially secure and can weather some 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—the predictability that a fixed rate provides is valuable.

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

Early repayment

When you get a traditional, variable-rate HELOC, you typically just make interest payments during the draw period, then pay the interest and principal once the draw period ends.

If you want to repay the amount you borrowed before your draw period ends, converting that portion of the HELOC to a fixed-rate loan can make it easier to manage your payments.

When you should avoid using a fixed-rate HELOC

Fixed-rate HELOCs don’t always make the most sense. In some scenarios, it’s better to stick with the variable rate.

Short-term borrowing

Variable-rate HELOCs tend to have lower interest rates because the lender has to compensate customers for the uncertainty involved. If you expect to repay the money you borrow relatively quickly, you may save money by sticking with a variable-rate HELOC.

When interest rates are high

Interest rates fluctuate. Sometimes rates are high and sometimes rates are low. While you can’t predict the future, if you have a feeling that rates are about to drop, a variable rate loan can let you take advantage of that future reduction in rates.

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.

How to convert your variable-rate HELOC to a fixed-rate HELOC

If your lender allows conversions from variable-rate HELOCs to fixed-rate HELOCs, the best thing to do is contact them to ask about the process and eligibility requirements. Each lender has a different set of steps that you must follow to complete the conversion.

A few common requirements include:

• LTV ratio of 80% or better
• Meeting a minimum loan amount (typically $5,000 – $15,000)
• Paying processing fees or closing costs

If your HELOC lender doesn’t offer the chance to convert your line of credit to a fixed-rate HELOC, you still have options. You can refinance your HELOC with a lender that offers home equity loans or fixed-rate HELOCs to get the fixed interest rate that you desire.

Recap of the best fixed-rate HELOCs

Lender	Fixed rate on new line	Convert current to fixed	Max. LTV
Figure	Yes	No	80%
M&T Bank	No	Yes	85.99%
Regions	No	Yes	80%
SunTrust	No	Yes	70%