Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Home Equity Best HELOC Rates in Texas Updated Dec 18, 2023   |   8-min read   |   This article has been reviewed by a Certified Financial Planner™ for accuracy. Written by Lauren Ward Written by Lauren Ward Expertise: Mortgages, real estate, investing, credit, debt, small businesses Lauren Ward is a personal finance writer who regularly covers topics like mortgages, real estate, and investing. Learn more about Lauren Ward Reviewed by Chloe Moore, CFP® Reviewed by Chloe Moore, CFP® Expertise: Equity compensation, home ownership, employee benefits, general finance Chloe Moore, CFP®, is the founder of Financial Staples, a virtual, fee-only financial planning firm based in Atlanta, GA, and serving clients nationwide. Her firm is dedicated to assisting tech employees in their 30s and 40s who are entrepreneurial-minded, philanthropic, and purpose-driven. Learn more about Chloe Moore, CFP® A home equity line of credit (HELOC) enables a homeowner to secure a low interest line of credit using their home’s equity as collateral. In other words, a HELOC allows homeowners to borrow against their home’s value minus the amount their lender owns. Homeowners in Texas may use a HELOC for a variety of purposes. The advantage of HELOCs is that rates are often much lower than personal loans and credit cards. If you have a large purchase or investment that you need to finance, a HELOC can be a smart financial strategy. Keep reading because we explore Texas laws revolving around HELOCs and which lenders offer the best HELOC rates to homeowners. Table of Contents Skip to Section About HELOC rates in TexasThe best HELOC rates in TexasHow your HELOC rate affects your overall loan costHow to get the lowest HELOC rates in TexasHow to apply for a HELOC in TexasFAQ About HELOC rates in Texas Living in Texas does not significantly affect HELOC rates. HELOC rates are influenced by a variety of factors, such as: Federal funds rateNational and international economic conditionsValue of the homeAmount of equity in the homeIncomeDebt-to-incomeCredit score and history One of the most important actions Texas homeowners can take to save money on a HELOC is to shop around. Lenders strive to be competitive with one another and offer similar interest rates, but homeowners can save money by rate shopping and comparing lender fees. Texas has specific laws for home equity loans and HELOCs: A HELOC cannot be used to purchase another homeHomeowners cannot get two HELOCS within 12 months of one another and may only have one home equity loan at a timeHomeowners must wait 12 days after applying before closing on a HELOC (known as the “cooling-off period”)Homeowners can only borrow 80% of the home’s combined loan to value—meaning all mortgages on the home cannot exceed 80% of the home’s valueEach advance must be a minimum of $4,000 up to the credit limitInterest on a HELOC may be federally tax-deductible if the money is used to improve the home “Texas laws are more strict than other states in an effort to protect homeowners,” says Chloe Moore, CFP®. “These rules can help ensure that homeowners do not borrow too much equity, which could result in a financial hardship or negative equity in the event of a market downturn.” The best HELOC rates in Texas When comparing HELOC lenders to find the best rate, Moore recommends also considering fees and time to close. Here are three of the best options we found in Texas. ProductAPR in TexasSpring EQHELOC or home equity loanNot disclosedBethpage FCUHELOCIntroductory rate starting at 6.99% APR, followed by minimum variable rate of 8.5%TruistHELOCUp to 18% Spring EQ: Best for multi-product application that lets you see HELOC and home equity loan offers View Rates LendEDU rating: 4.3 out of 5 Average closing time of 21 daysRepayment terms up to 30 yearsDigital forms for easy application If you want to access a HELOC in Texas quickly, Spring EQ is a strong option. The average closing time is 21 days, but you may even be able to tap into your funds within 14 days (which still meets the required 12-day cooling-off period in Texas). Plus, Spring EQ offers instant qualification so you know how much equity you can use and what type of rate you qualify for. We also like Spring EQ because you can compare options for either a home equity loan or a HELOC. That way you can make a solid decision based on two financing structures. APR: Not disclosedLoan amount: Up to $500,000Minimum credit score: 680Repayment terms: Up to 30 yearsFees: Appraisal fee, loan origination fee, and an underwriting fee Bethpage FCU: Best credit union View Rates LendEDU rating: 4.2 / 5 Low introductory ratesVariable HELOCs may convert to a fixed-rate loan option6 to 10 weeks to close Bethpage Federal Credit Union works for a range of Texas homeowners because loan amounts can be as small as $10,000 or as high as $1 million. Plus, you can start with an introductory APR of just 6.99% for the first year before a variable rate applies. Closing times can take between six and 10 weeks, which is slower than many other options. But you don’t have to worry about paying any fees to Bethpage FCU. And once your rate becomes variable, you have the choice to convert it to a fixed-rate loan option at no charge. APR: Fixed rate of 6.99% for the first 12 months for borrowers with VantageScores of 720 or more; then a variable rate starting at 8.5% Loan amount: Up to $1 millionMinimum credit score: 670Repayment terms: 5, 10 or 20 yearsFees: No fees Truist: Best for varied repayment terms View Rates LendEDU rating: 3.4 / 5 Choose from 5, 10, 15, 20, or 30 year termsMaximum APR is 18% in TexasPick either variable or fixed interest rate Truist is a national bank with a physical presence in the Houston, Dallas, Austin, and College Station areas. However, the application can be completed online. From there, it takes up to 35 days to close on your HELOC. Truist will pay your closing costs as long as you keep your HELOC open for at least three years. Otherwise, you must reimburse the bank for any costs they paid on your behalf. You’ll find a variety of terms lengths so you can customize the repayment period to suit your needs. Truist offers several interest options. Choose from a fixed rate, variable rate, or an interest-only payment option (which is also a variable rate). APR: Up to 18% (fixed or variable available)Loan amount: Starting at $15,000Minimum credit score: Not disclosedRepayment terms: 5, 10, 15, 20, or 30 year termsFees: Fixed rate setup fee ($15); no annual fee; other closing costs may apply How your HELOC rate affects your overall loan cost A HELOC rate is the cost of borrowing and affects the total cost of the loan and the monthly payment. For example, imagine you take out a $100,000 HELOC with a 10-year term. See the difference in monthly payment and total cost with an 8% interest rate vs. a 9% interest rate. 8% interest rate9% interest rateMonthly payment$1,213$1,267Total loan cost$145,560$152,040 While the difference between the loans is only one percent, the homeowner would pay $6,480 more with a slightly higher rate. How to get the lowest HELOC rates in Texas The biggest eligibility requirement to note in Texas is that you can only borrow 80% of the home’s combined loan-to-value. If you know a general ballpark of your property value, your current mortgage balance plus your new HELOC can’t exceed 80% of that number. All lenders consider your personal credit score when determining your eligibility for a HELOC in Texas. If you have a high credit score, you’ll qualify for a lower rate. A lower credit score means you’ll pay a higher interest rate. “The minimum credit score required to qualify for a HELOC varies by lender,” says Moore. “Generally, if you have a credit score of 700 or higher and meet other requirements, such as a low debt-to-income ratio, you should qualify for a lower interest rate.” No matter what your credit score is, it’s smart to shop around and compare multiple lenders. In addition to different interest rates, you can also choose from different repayment term lengths. You can also explore fixed and variable rate options or interest-only payments. How to apply for a HELOC in Texas Applying for a HELOC in Texas starts with comparing multiple lenders. You can usually prequalify to see what kind of rate and terms you’re eligible for. Then it’s time to submit a formal application. Expect to provide the following details: Address verificationIDName, birthday, and Social Security numberEmployer name and addressPay stubs, W-2, and/or tax returnsBank statementsProperty tax billMortgage statementHomeowners insurance declaration page Once approved, the state of Texas requires homeowners to wait at least 12 days before closing. That way you have plenty of time to consider the HELOC terms and change your mind if necessary. During that time, the lender may also order an appraisal to confirm the value of your home. FAQ What is the lowest HELOC rate in Texas? The lowest HELOC rate in Texas depends on the borrower and the lender. Homeowners should always shop around and compare rates and fees between lenders to save the most money on their HELOCs. What HELOC has the highest rates in Texas? HELOC rates are influenced by economic conditions, the homeowner’s personal financial history, and the lenders themselves. No one lender can be said to have the highest rates in Texas. To avoid high interest rates, homeowners should always rate shop before choosing a lender. What is the current average HELOC rate in Texas? HELOC rates are influenced by the federal funds rate and the borrower’s credit history, as well as national and international economic conditions. As a result, rates fluctuate daily, so you will want to compare lenders once you’re ready to take out a HELOC. Will my Texas HELOC have insurance requirements? A Texas HELOC does not require mortgage insurance because it is not a traditional mortgage. It is, on the other hand, often required for conventional loans and FHA loans. Do any lenders not offer HELOCs in Texas, and why not? Because Texas places restrictions on how HELOCs can be used within the state, some lenders may choose not to offer HELOCs. However, even with state regulations, Texans can find HELOCs with many lenders.