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Home Equity

Best HELOC Rates in New Jersey

A home equity line of credit (HELOC) can offer convenient access to cash for home repairs, debt consolidation, or other expenses. A HELOC is a revolving credit line that’s secured by home equity, or the difference between your home’s value and your outstanding mortgage balance. 

If you’re shopping for HELOC rates in New Jersey, you might consider looking for a lender online. Comparing HELOC rates online is a convenient way to find the best loan option for your needs. It also helps to know a little about how HELOC rates in New Jersey are set. 

About HELOC rates in New Jersey

Generally speaking, HELOC rates are influenced by two things: 

  1. Your creditworthiness
  2. The current interest rate environment

In New Jersey, lenders can use a benchmark such as the Prime rate to set HELOC rates. The Prime rate represents the lowest rate banks charge their most creditworthy customers. 

As of October 2023, New Jersey HELOC rates typically range anywhere from 7% to 10%, though some lenders charge higher rates. For perspective, the average rate for a 30-year purchase mortgage was 7.63%. HELOC rates in New Jersey and other states are slightly above traditional mortgage rates because they present a greater risk to lenders. 

Ask the expert

Kyle Ryan

CFP®

HELOCs are a floating rate type of line of credit. They will move up and down with the Prime rate, which follows the federal funds rate. HELOCs present more risk to the lender, not the borrower, hence the higher rate. If an individual were to become delinquent on their mortgage or HELOC, the mortgage lender is the first to get paid, as the HELOC is in the second lien position. Therefore, to cover the additional risk, banks offer HELOCs at higher rates than they do conventional mortgages.

State usury laws impose caps on how much interest lenders can charge, though there are exceptions for loans over $50,000. Financial institutions, including mortgage lenders, can set rates up to the criminal usury cap of 30%, but it’s unlikely anyone would agree to a HELOC at that rate. 

The best HELOC rates in New Jersey

Searching for the best HELOC lenders in New Jersey can be time-consuming, so we’ve put together a list of top lenders for you. Here’s how they compare at a glance, with a deeper dive into each loan offering below. 

ProductAPR in New Jersey
FigureHome equity line of credit9.20%17.15%
Spring EQHome equity line of credit (home equity loans are also offered)Not disclosed
Bethpage FCUHome equity line of creditIntroductory fixed APR of 6.99% for eligible borrowers, with variable rates starting at 8.50% thereafter
PenFed Credit UnionHome equity line of creditStarting at 8.625%

Figure: Best HELOC overall

LendEDU rating: 4.9 / 5 

  • Borrow up to $400,000
  • Option to redraw up to 100%
  • Funding in as few as five days after approval

Figure offers HELOCs ranging from $15,000 to $400,000 for home improvements, debt consolidation, higher education, and other expenses. Borrowers can complete an application online and get preapproved in five minutes, and get funded in as little as five days. There’s no need to wait for an in-person appraisal. 

Rates are fixed, so you don’t need to worry about your rate or monthly payment fluctuating over time. There are no closing or out-of-pocket costs, though you will pay an origination fee. The fee maxes out at 4.99% and is deducted from your HELOC proceeds. 

The maximum loan-to-value (LTV) ratio for Figure HELOCs is 85%. New Jersey residents can borrow up to 85% of their equity minus their mortgage balance against a primary home, second home, or investment property. You can check your rates and get a HELOC quote online without affecting your credit scores. 

  • APR: Fixed rates ranging from 9.20%17.15%
  • Loan amount: $15,000 – $400,000
  • Minimum credit score: 640
  • Repayment terms: 5, 10,15, or 30 years
  • Fees: Origination fee of up to 4.99%

Spring EQ: Best multi-product application

LendEDU rating: 4.3 / 5

  • Access up to 95% of your home’s equity
  • Compare rates for HELOCs and home equity loans
  • Interest-only payments for 10 years on HELOCs

Spring EQ offers home equity lines of credit and home equity loans to eligible borrowers. The difference between a HELOC and a home equity loan is that the former is a revolving credit line, and the latter allows you to borrow a lump sum secured by your equity. 

If you’re interested in a HELOC, Spring EQ offers credit lines ranging from $50,000 to $500,000. HELOCs have a 10-year interest-only draw period followed by a 20-year repayment period. You’ll need to get a rate quote to see how much you might pay. Spring EQ doesn’t disclose HELOC rates in New Jersey or any other state online. 

You can also compare home equity loan rates if you’re unsure which option is best for tapping your equity. Home equity loans offer terms ranging from five to 30 years, and it’s possible to borrow up to 95% of your home’s equity in cash if approved. 

  • APR: Not disclosed
  • Loan amount: $50,000 – $500,000
  • Minimum credit score: 680 for HELOC borrowers; 640 for home equity loan borrowers
  • Repayment terms: 10-year draw period for HELOCs, followed by a 20-year repayment term
  • Fees: Not disclosed

Bethpage FCU: Best credit union overall

LendEDU rating: 4.2 / 5

  • Borrow up to $1 million 
  • Low fixed introductory rate
  • No application, origination, or appraisal fees

Bethpage FCU offers HELOCs ranging from $10,000 up to $1 million, with fixed introductory rates. The intro rate applies for the first 12 months, and then you’ll switch to a variable APR. Borrowers must have credit score and loan program requirements to lock in a low, fixed introductory rate. 

During the initial 10-year draw period, you’re only required to make interest-only payments. You’ll then begin making principal and interest payments for the remainder of the 20-year repayment period. If you’d prefer predictability with payments, you can convert a variable rate HELOC to a fixed rate. 

Funding can take a little longer, with borrowers getting access to their credit line within 34 days on average. However, Bethpage FCU is fee-friendly, with no origination fees, application fees, or appraisal fees required. 

  • APR: Introductory APR of 6.99% for eligible borrowers, followed by a standard APR starting at 8.50%
  • Loan amount: $10,000 – $1 million
  • Minimum credit score: 670
  • Repayment terms: 20 years
  • Fees: No application fees, origination fees, or appraisal fees

PenFed Credit Union

LendEDU rating: 4.2 / 5

  • Borrow $25,000 to $500,000 with no origination fees
  • Closing in as little as 15 days
  • Interest-only payments for the first 10 years

PenFed Credit Union offers HELOCs of up to $500,000 with a 10-year draw period and 20-year repayment term. Once approved, you may be able to close in as little as 15 days, which is terrific if you’re looking for a credit union HELOC in New Jersey that offers fast access to cash. 

PenFed doesn’t charge origination fees but imposes a $99 annual fee. You’ll also need to factor in appraisal fees and any closing costs you’ll need to pay out of pocket. 

Rates are some of the lowest for HELOCs in New Jersey, and you’ll only need to make interest-only payments during the draw period. You may also have the option to switch between a variable and fixed rate on all or some of your interest payments.  

  • APR: Starting at 8.625%
  • Loan amount: $25,000 – $500,000
  • Minimum credit score: 680
  • Repayment terms: 20 years
  • Fees: $99 annual fee; appraisal fee applies

Ask the expert

Kyle Ryan

CFP®

Consider all fees—origination and administrative hit the hardest. Next, look for the APR and where it is in relation to the Prime rate. Compare fixed vs. variable rates while remaining aware of potential interest rate movements in the future. The lender you choose should depend on your purpose for borrowing and how fast you will pay off the HELOC. You will also want a lender with a good service department you can reach out to if you ever have questions.

How your HELOC rate affects your overall loan cost

A solid reason to search for the best HELOC rates in New Jersey (or whichever state you may be borrowing in) is this: A lower rate can mean a lower cost of borrowing overall. 

Your HELOC rate can affect your monthly payments, as well as the total amount of interest you pay for the life of the loan. So it makes sense to search for the best rates possible when planning to borrow against your home equity. 

For example, say you’d like to borrow $100,000, and you have a choice between two lenders. One offers you a HELOC at 8.50%, and the other wants to charge 8.75%. Here’s how the difference works out:

Loan A (8.50%)Loan B (8.75%)
Draw period payment (interest-only for 10 years)$708.33 $729.17
Regular payment (20-year term)$867.82$883.71
Total interest paid$193,270$199,520

A difference of just 0.25% means paying over $6,200 more for your HELOC over the entirety of the loan term. That’s an excellent reason to shop around to find the lowest HELOC rates. Finding a lender that offers an autopay discount could yield additional savings. 

Keep in mind that these calculations assume you have a fixed-rate HELOC. If you choose a variable-rate HELOC instead, your monthly payments could be lower or higher at different points in the loan term. A changing rate could also mean paying more or less in interest. 

How to get the lowest HELOC rates in New Jersey

Eligibility for a HELOC in New Jersey is similar to eligibility requirements in other states. Some of the most important things lenders consider include:

  • Your credit scores
  • Income and debt-to-income ratio (DTI)
  • How much equity you’ve accumulated in the home

A good to excellent credit score can help you qualify for lower HELOC rates, but a poor credit score could mean paying a much higher rate. If you’re considering a HELOC in New Jersey, it’s helpful to check your credit before looking into loans to get a better idea of what you might qualify for. 

Keep in mind that the best time to get a HELOC is when rates are low. Since the Federal Reserve began implementing rate hikes to curb inflation, HELOC rates in New Jersey and other states have increased. 

However, if you need a HELOC now, here are a few helpful tips to keep in mind so you can find the lowest rates in New Jersey.  

  • Check your current bank or mortgage lender first. It may be worth checking HELOC rates at your bank or current mortgage lender to see what’s on offer. Your bank might offer a relationship rate discount or fee waivers as an incentive to get your business. 
  • Review your credit. If you haven’t checked your credit yet, it’s wise to do so. That can make it easier to narrow down which HELOCs you have the best odds of being approved for. 
  • Compare lenders online. When comparing online HELOC lenders, first check to see whether they offer loans in New Jersey. Many lenders offer HELOCs nationwide, but not all of them. Once you find New Jersey HELOC lenders, you can get rate quotes to see how the terms compare. 
  • Consider things other than rates. Getting the lowest rate might be your primary goal, but remember to review the other details of any HELOC you’re weighing. That includes the draw period, repayment term, minimum credit score requirements, LTV requirements, and any fees you might pay. 

At a minimum, you may want to get HELOC rate quotes from three different lenders. That can give you an idea of the range of rates you might expect. Most lenders should let you check your rates online without performing a hard pull of your credit history. 

How to apply for a HELOC in New Jersey

If you’ve done the preliminary work of finding a HELOC lender in New Jersey, applying for a loan is the next step. The exact process can vary from lender to lender, but here’s what you can expect. 

  • Complete the application. A HELOC application should ask for personal information about yourself, including your name, date of birth, and Social Security number. You’ll also need to share information about your income and debts, as well as details about your home. That includes the address, property type, and estimated mortgage balance. 
  • Provide any supporting documentation. Your lender may ask for copies of bank statements, pay stubs, and tax returns to verify your income. You may also need to share recent mortgage statements so the lender knows how much you owe on your home.
  • Complete the appraisal. An appraisal is often a requirement for a HELOC because the lender needs to know how much your home is worth. The form the appraisal takes—whether in-person, virtual, or drive-by—can depend on the lender. You’ll pay the appraisal fee at the time it’s scheduled. 
  • Wait for approval and review the loan terms. Assuming you’re approved, your lender will provide you with details regarding your HELOC. That includes the amount you’re approved for, your interest rate, and any fees. It’s important to read through these documents to understand what you’re agreeing to before you sign. 
  • Sign the paperwork and access your credit line. If everything on the loan paperwork looks correct, you can move forward with closing. You’ll pay any closing costs due, if necessary, and sign all the loan paperwork. Once that step is complete, your lender will arrange to give you access to your credit line. 

How you access your credit limit can depend on the lender. You might have the option to write checks from your credit line, make cash withdrawals at a branch if you applied at a bank or credit union that operates in New Jersey, or spend with a debit or credit card. 

Once your credit line is open and accessible, you can use it however you see fit. And remember that if you’re opening a HELOC in New Jersey just in case of emergency, you’re not obligated to use it unless you need to. 

FAQ

What is the lowest HELOC rate in New Jersey?

The lowest HELOC rate in New Jersey will depend on which lender you’re considering. It’s possible to find HELOC rates in New Jersey as low as around 8% as of December 2023, but some lenders charge more for home equity loans. Getting rate quotes from multiple lenders can help you find the best rates. 

What HELOC has the highest rates in New Jersey?

There is no single highest-rate HELOC in New Jersey. The rates lenders charge are determined by the interest-rate environment and a borrower’s qualifications. Generally speaking, the lower your credit score, the higher the rate will be when getting a HELOC. 

What is the current average HELOC rate in New Jersey?

Our analysis found that in December 2023, HELOC rates in New Jersey range between 7% and 10% on average, but some lenders charge above 10% for a home equity line of credit. In general, HELOC rates in New Jersey and elsewhere have increased due to the Federal Reserve’s decision to implement multiple rate hikes. 

Will my New Jersey HELOC have insurance requirements?

If you’re getting a HELOC in New Jersey, your lender may expect you to meet the same insurance requirements associated with purchasing mortgage loans. That includes having homeowners insurance to protect the property against damages from covered perils. 

Do any lenders not offer HELOCs in New Jersey, and why not?

Plenty of lenders offer HELOCs to New Jersey residents, but just as many don’t operate in the state. Hitch, for example, does not offer HELOCs in New Jersey. Why lenders operate in some states but not others may be due to their business model or a lack of licensing.