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Home Equity HELOCs

Best Fixed-Rate HELOCs

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. Thanks to those fluctuating rates, variable-rate HELOCs often have fluctuating payments, too.

Fixed-rate HELOCs, while less common, give borrowers stability and consistency. For those that prefer predictable monthly payments, we’ve found one lender that offers fixed rates for the entire term, plus another with a mix of variable and fixed rates.

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Best for fixed-rate HELOCs
Best fixed introductory rate

Reviews of the best fixed-rate HELOC lenders

Check out our reviews of the top lenders for more details about why we selected each HELOC as one of the best for fixed rates.

Figure: Best fixed-rate HELOC

HELOC rates are always fixed

  • Prequalify for a fixed-rate HELOC with no impact to 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

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 away. You don’t need 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. If you plan to draw most or all of your credit line at closing, Figure is a terrific option because it requires an initial draw of 100%.

A perk 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.

  • Minimum credit score: 640
  • Maximum LTV: 85%
  • Draw period: 5 years.
  • Repayment period: 5, 10, 15, or 30 years
  • Fees: Origination fee of up to 4.99%

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


Introductory fixed rate, followed by a variable-rate HELOC you can convert to a fixed-rate loan option

  • An introductory fixed rate of 7.24% APR for 12 months for VantageScores of 720 and up1, then as low as 7.75% variable APR2 thereafter
  • Convert your variable-rate balances into a fixed-rate loan option, with as many as 3 fixed-rate loan balances at one time3
  • Available in all states except Texas

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. There are no additional costs2 for converting your balance. Once converted, you can repay the balance over 20 years.

  • Minimum credit score: 670
  • Maximum LTV: 85%
  • Draw period: 10 years
  • Repayment period: 20 years (variable rate)
  • Fees: No application, origination, appraisal, or closing costs2

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

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

What’s the difference between a variable-rate and fixed-rate HELOC?

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. When interest rates rise, however, the variable rate for a HELOC can increase. As the rate increases, so does the monthly payment due on the HELOC, which could strain your budget. 

The U.S. Federal Reserve can raise the federal funds rate to manage economic conditions. The federal funds rate is the rate at which banks lend money to one another overnight. When the Fed institutes a rate hike, that can cause increases in other benchmark rates, including the prime rate. 

With a fixed-rate HELOC, the rate remains the same for the entire repayment term. That means monthly payments are predictable, and it’s easy to calculate how much interest you’ll pay. Few lenders offer a fixed-rate HELOC or the option to convert a variable-rate HELOC to a fixed rate. 

Infographic shows how two fixed-rate draws on a HELOC work

Is a fixed-rate HELOC better than a variable-rate HELOC?

Whether a fixed-rate HELOC is better than a variable-rate HELOC depends on your situation. In general, fixed-rate HELOCs can appeal to borrowers who:

  • Want predictable monthly payments without having to worry about interest rate increases
  • Would like to be able to calculate how much interest they’ll pay upfront
  • Can qualify for the lowest fixed rates based on creditworthiness

Those are the main pros or advantages a fixed-rate HELOC can offer. But the main drawbacks of choosing a HELOC with a fixed rate include:

  • Rates may be higher overall than variable-rate HELOCs, meaning you pay more in interest. 
  • You won’t save money or reduce your monthly payments if rates drop.
  • Additional fees may apply to a fixed-rate HELOC

Assess your budget and the current interest rate environment. If the consensus is that rates will rise, locking in a fixed-rate HELOC could be the better choice to minimize interest charges and cap payments. But if a rate drop seems likely, you may benefit from choosing a variable-rate option instead. 

When using a fixed-rate HELOC makes sense

Scenarios when using a fixed-rate HELOC instead of a variable-rate one makes sense include the following four:

  • Long-term projects
  • Large HELOCs
  • Economic uncertainty
  • Early repayment

Long-term projects

A fixed-rate loan can reduce stress if you have a project you expect to 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 have 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 interest-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 interest-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.

Early repayment

When you get a traditional variable-rate HELOC, you can make interest-only payments during the draw period and 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

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

  • Short-term borrowing
  • When rates are high

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 have to consider your net savings if you’re paying 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.

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 move is to contact it to ask about the process and eligibility requirements. Each lender has a different set of steps to complete the conversion.

Standard requirements include:

  • LTV of 80% or better
  • Meet a minimum loan amount ($5,000 – $15,000 with most lenders)
  • Pay 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 you desire.


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 usually no longer a HELOC; instead, it’s a fixed-rate home equity loan. This allows for predictable payments on the amount you’ve already drawn but does not let you draw new funds at this fixed rate.

Recap of the best fixed-rate HELOCs

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Best for fixed-rate HELOCs
Best fixed introductory rate