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Home Equity HELOCs

How to Convert a HELOC to a Fixed-Rate Loan

If you’re worried about rates rising, it could be wise to convert your home equity line of credit (HELOC) to a fixed-rate loan. Most HELOCs come with variable interest rates that can increase or decrease as the market shifts. This is terrific if rates drop and you save money, but if rates rise, you could pay more interest than you expected. 

Converting your HELOC from a variable interest rate into a fixed-rate loan can be beneficial because it allows you to lock in your APR before it rises further and start paying off the loan in fixed installment payments. 

If you’re considering this, we’ve compiled everything you need to know about how to convert HELOCs to fixed-rate loans and the best time to do it.

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

You can convert a variable-rate HELOC to a fixed-rate HELOC in one of two ways:

  1. Work with your current lender
  2. Apply for a new HELOC with a new lender

Work with your current lender 

The easiest way to convert a variable-rate HELOC to a fixed-rate HELOC is to work with your current lender. The details vary by lender, but many HELOC lenders have a simple process where you can request the rate lock online without involving a loan officer. You may be able to see what your APR, term, and monthly payments are before accepting terms. 

If this option isn’t available, contact your lender to ask what it can do for you.

Apply for a new HELOC

If your remaining home equity, income, and credit score allow you to qualify, you may also be able to take out another HELOC through a new lender. As part of this “refinance” HELOC, your first HELOC is paid off, and you can select an amount you want to repay at a fixed rate. 

The main downside with a new HELOC is the additional closing costs you may incur with a new loan.

Here’s our top-rated HELOC lender with fixed rates:


Fixed-rate online HELOC

  • Borrow up to $400,000
  • Funds can be ready in as few as 5 days
  • Must withdraw full credit line (minus fees) at closing

How does the fixed rate on a HELOC work? 

Some lenders let borrowers convert their HELOC to a fixed rate for the remainder of their draw period. Others may apply fixed rates (also known as rate locks) to a number of individual draws based on when the money is withdrawn. It’s common to be able to do this on your own online. 

Rate locks often have minimum loan amounts. For example, you may need to select at least $1,000 to lock a portion of your HELOC. Also, electing to convert a HELOC to a fixed rate is only available during the draw period. If the HELOC is in the repayment period, it has a set interest rate and repayment term.

If your HELOC is still in the draw period, you’ll start paying down the balance faster when you convert to a fixed-rate option. As a result, you’ll still have access to your credit limit at the variable interest rate.

Example of a fixed rate on a HELOC

U.S. Bank, for example, allows three separate rate locks. Customers can choose a dollar amount and repayment term from their online accounts. The lender auto-populates the rate and term for the fixed loan, and customers can choose an amount to convert to a fixed rate. It’s also possible to leave some amounts out of the rate lock. 

For example, on a $100,000 HELOC, you could separate your money with different rate locks at different times:

  • You could put a $30,000 debt consolidation loan in a fixed-rate loan at 9.95% for 10 years. 
  • You could leave $20,000 for a kitchen remodel at a variable rate because you weren’t sure how much you would need. 
  • You could also lock in a rate of $11,000 at 8.5% with a five-year repayment plan. 

With your current lender, you might not pay any fees to convert your variable-rate HELOC to a fixed rate. 

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

What are typical fixed rates for a fixed-rate HELOC?

Interest rates on all home equity products can vary based on the following:

  • Market rates
  • Your location
  • How much you’re looking to borrow against your home
  • Length of your term 
  • Your credit score
  • Your debt-to-income ratio (DTI)

These factors make citing typical fixed rates challenging. However, you may notice trends related to interest rates between these products.

On average, HELOC rates are higher than cash-out refinance and home equity loans. Many lenders reserve the lowest HELOC rates for borrowers choosing an introductory and variable interest rate. Borrowers who opt to lock in a fixed-rate HELOC may pay higher rates, but if you’re worried about how often adjustable interest rates rise, you might want to lock in your rate now. 

How will my payments change?

Your payments will likely be higher when you convert to a fixed-rate HELOC. The draw period on a HELOC lasts about 10 years, offering the opportunity to withdraw funds as needed up to your line of credit. As you borrow, you’re often only required to pay interest on your balance throughout the draw period. 

When you elect to convert all or a part of your HELOC with a fixed rate and term, you’ll start making installment payments that include principal and interest. Once the repayment term starts, the monthly payments will likely be higher than when you were just paying interest on your balance.  

Do I need a new lender to convert my HELOC to a fixed-rate loan?

Depending on your lender and situation, it may make sense to contact your current bank first to convert your HELOC. 

You already have a relationship with that lender, so a loan swap could be more straightforward. You may also get more competitive terms as your lender attempts to keep your business.

Your lender may be able to:

  • Swap your variable-rate HELOC for a fixed-rate HELOC
  • Offer rate locks for portions of your HELOC amount
  • Offer a fixed rate on your HELOC balance for a promotional period (for example, 12 months)
  • Refinance your HELOC balance into a home equity loan

You may need a new lender in some situations. The new lender will pay off the old HELOC when refinancing to put themselves in the junior lien position behind your primary mortgage.  

Will I pay fees?

If your lender allows you to roll a variable-rate HELOC balance into a fixed-rate HELOC or home equity loan, you may be able to get the fees waived

If you borrow from a new lender, you may pay fees, including:

  • Application fee
  • Credit report fee
  • Loan origination fee
  • Appraisal fee (if required)
  • Title search fee
  • Notary fee
  • Attorney or closing fee
  • Recording fee

Certain lenders offer credits or to pay closing costs when you take out a new loan. If you close the account early, you may need to repay those waived expenses. Check with your current HELOC lender to see whether you’re subject to early prepayment penalties to pay off and close your HELOC account.

What are the pros and cons of converting my HELOC to a fixed-rate loan? 

As with all financial products, converting a HELOC to a fixed-rate loan presents several pros and cons. 


  • Your interest rate won’t go up

    It may be higher initially, but you could have peace of mind knowing that your interest rate is locked. You won’t pay a higher interest rate in a turbulent market of rate fluctuations.

  • Predictable monthly payment 

    When you lock in your rate, you’ll know your exact monthly payment. 

  • You’ll start to pay off your loan

    Converting from a variable-rate loan to a fixed-rate loan often means switching from interest-only to principal-and-interest payments, allowing you to pay off the loan faster.

  • More access to your HELOC credit line

    With many providers, the HELOC is still in the draw period when you elect to lock in a fixed interest rate. As you pay down the loan, you’ll still have access to draw money up to your credit line should you need it.  


  • Your monthly payment will be higher

    When you lock your rate, that portion of the HELOC switches to full principal-and-interest payments instead of interest only. This often translates to a higher monthly payment, which means repaying your balance faster, but it may be harder to budget for in the beginning. 

  • Rates could continue to drop 

    It’s anyone’s guess when interest rates will bottom out at their lowest point. If you don’t time it perfectly, rates could continue to trend down after you lock in a fixed rate. 

  • You might lose your line of credit

    Depending on how the conversion is done, you could lose your remaining time with your HELOC’s draw period. If you were leaning on that line of credit for future emergencies, unexpected expenses, or large purchases, you might be out of luck.

  • You could incur additional costs

    Regardless of which product you choose, you could be responsible for certain closing and origination costs as part of the account-opening process. Some lenders will waive these fees or even absorb them, but you may still need to reimburse the lender if you pay off and close the account too soon.

Our expert’s take

Rand Millwood


Typically, the only time I would recommend converting a HELOC to a fixed-rate loan would be if you’re planning to refinance your entire mortgage to lock in a fixed payment. There might be a period where we’re expecting market interest rates to rise for a myriad of reasons, but that is hard to know with certainty. So even if you assume rates will rise in the months or years ahead, when you factor in the increase in payment due to having to repay principal and interest over a new shorter repayment period, it typically wouldn’t make sense versus the interest-only payment of a HELOC, which you could likely renew if needed when it reaches its repayment period.

Should I convert my HELOC to a fixed rate? 

The right financial decision depends on your unique circumstances. A few variables can make the decision easier for you:

  • Your lender offers a free rate conversion
  • You’re ready to start paying off your loan
  • You need another loan to replace your HELOC
  • Your needs change

Here’s what we mean.

If your lender offers the option for free 

You’ll find few downsides to converting your variable-rate HELOC to a fixed-rate HELOC if your lender lets you do it for free. At a minimum, you’ll start paying down your loan balance. At best, you’ll avoid rising APRs in a challenging interest-rate environment by locking in your rate. 

If you’re ready to start paying off your loan

If you don’t need to borrow money from your HELOC anymore, you may be ready to start paying off your loan. Converting your HELOC to a fixed-rate loan starts you down the path to paying off the debt. Paying off debt helps with your credit history and credit utilization ratio, and it can feel like an accomplishment. 

“The other option is to keep your variable HELOC but just start paying a small amount more every month to start paying off the loan.”

Rand Millwood


If you need to find another loan to replace your HELOC 

If you need a new loan to replace your HELOC altogether, you may want to consider the costs before you do. The savings in interest could be worth it, but talk to your lender first to ensure you’re getting the best deal.

If your needs change

Let’s say you’ve finished one remodeling project and want to start a new one. Refinancing your HELOC into another loan type (such as a cash-out refinance or a personal loan, which we’ll discuss below) could help you free up funds to take on another project. Whether this will make sense depends on your income and a number of other factors. 

You can also read our guide to the best fixed-rate HELOCs if you’re considering a new loan.

Our expert advises on the role of interest rates

Rand Millwood


Interest rates declining is a huge factor in this decision. You can refinance your entire mortgage to consolidate (if at a lower rate) and not significantly increase your payments even as you start paying off more of the loan principal. A good course of action would be to evaluate what your total payment is when you have used all you plan to of your HELOC, and then determine what interest rate you need on a full mortgage to equate to a roughly equal monthly payment. Then you are ideally lowering your interest costs while also starting to pay off the principal.

Other fixed-rate options to convert your HELOC

Fixed-rate productBest for
Fixed-rate HELOC optionHybrid HELOC lending: Keep your HELOC while paying down a portion at a fixed rate
A fixed-rate home equity loanPaying off what you’ve already spent
A cash-out refinanceConsolidating mortgage and HELOC into a single payment
A personal loanSmaller payoff amount

Each product has unique eligibility requirements, especially when moving debt from a HELOC.

Home equity loan

A home equity loan is similar to a HELOC: Both give you access to a portion of your home’s current equity. A home equity loan is different because it’s a lump-sum installment loan rather than an open line of credit. Home equity loans are often available with fixed interest rates. 

How it works

Depending on your lender, you can convert your HELOC into a home equity loan with your current lender or apply for a new home equity loan to replace your HELOC. 

You can request the full balance of your HELOC be turned into a fixed-rate loan, which will change your loan to a home equity loan. You won’t be able to borrow more as you pay down the loan as with a fixed-rate HELOC that has time remaining in the draw period.

Best for

Home equity loans are best for borrowers who are ready to pay down the balance. They may have had a large expense (such as a remodeling project), no longer need the flexibility to borrow more money, and are ready to pay it down. 

Table showing the major differences and similarities between a HELOC and a home equity loan

Cash-out refinance

A cash-out refinance involves taking out a new mortgage loan against your property and tapping into your available equity as a cash disbursement.

This new mortgage replaces your old mortgage with a new interest rate and terms. Unlike a HELOC or home equity loan, which gives you a second monthly payment on top of your mortgage, a cash-out refinance leaves you with just one balance and monthly payment. 

How it works

As with HELOCs and home equity loans, you can only withdraw a portion of your equity through a cash-out refinance, often up to a loan-to-value ratio (LTV) between 70% and 90%. If you have sufficient equity remaining, you may be able to use a cash-out to consolidate and refinance your mortgage loan and your HELOC together at a fixed interest rate. 

Best for

Borrowers who want a single monthly payment to encapsulate all debts might consider a cash-out refinance. 

Personal loan

A personal loan does not use the equity in your home to secure funds. This is the main benefit of a personal loan over a HELOC: Your property isn’t collateral on the loan. You may find it more straightforward to get a personal loan because it doesn’t require extra steps, such as a home appraisal.

How it works

Using a personal loan to refinance a HELOC balance won’t always be an option. Some personal loan limits are $30,000 to $50,000; if you owe more than that on your HELOC, you may come up short.

Personal loans often come with higher interest rates and shorter terms than the other options we mentioned. Your monthly payment might be higher, but you’ll pay off your debt sooner.  

Best for

Personal loans are best for borrowers who have smaller HELOC balances, don’t want to use their home as collateral on a loan, or may want a more accelerated payoff date. 

Can I convert my fixed-rate loan back to variable if interest rates fall? 

If you converted your HELOC to a fixed-rate HELOC, it may be possible to return to a variable-rate loan if interest rates fall. 

Yes, with certain HELOC lenders

Some lenders, such as U.S. Bank and Chase, are flexible and allow borrowers to switch from a fixed-rate loan to a variable rate. 

For some, it’s as easy as changing your options online, just as you can when switching from a variable rate to a fixed rate. 

Your lender might charge a penalty fee. Chase, for example, charges a 1% penalty fee of the original lock amount if you cancel within 45 days. 

No, but you can refinance your new loan (again)

If you refinanced into a home equity loan, personal loan, or completed a cash-out refinance, you can’t go back. Those are new financial agreements you must fulfill. You may, however, have the option to refinance those loans into new loans if interest rates drop. 

Ask your lender to renegotiate your rate

It never hurts to ask; if your lender knows you’re shopping for a new loan, it might be willing to reduce your rate. If rates have dropped since you locked in your fixed rate, consider calling your lender to ask about your options. The lender may have a conversion product available or be willing to offer a reduced rate in exchange for your loyalty.