The average HELOC interest rate by loan type, credit score and state
The average rate for a HELOC is currently over 4.
- The average interest rate on a HELOC is 4.14% on a loan of 50.000 USD with a loan-to-value of 80%.
- But credit score, location and the HELOC's loan-to-value ratio can affect your interest rate.
- Even if interest rates are currently low, remember that this may not remain so over the many years of your loan.
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The average interest rate for a HELOC worth 50.000 USD, according to data from 4.14% S&P Global, assuming a loan-to-value ratio of 80%.
If you're a homeowner with equity, a HELOC home equity line of credit has relatively low interest rates compared to other loan options.
Unlike home equity loans, HELOCs are credit accounts where a line of credit is established that allows you to borrow over time. HELOCs are more like a credit card account than a loan, as you can borrow as often as you need up to a certain limit and up to a date when repayment begins.
HELOCs do not provide lump sum cash payments in advance. Instead, they're ideal for situations where you're not sure how much you'll need to borrow, such as. B. for a remodeling project.
Regardless of the situation you're borrowing for, your credit score, loan-to-value, and where you live can all affect the HELOC interest rate you receive from your lender. Here's how these factors can affect what you pay.
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Average HELOC interest rate over time
HELOCs often have a variable interest rate, which means the interest rate can change over the life of the loan.
These interest rates are often closely tied to the prime rate, for which loans are charged to interest banks. This interest rate follows the Federal Reserve's federal funds rate, which can change frequently. Its impact is often reflected in interest rates on everything from car loans to savings accounts.
Banks sometimes add a margin to the prime rate to determine their HELOC rates. Since March 2020, the prime rate has been 3.25% – an unusually low rate due to the financial impact of the corona virus. Here's how this course has changed since 2001:
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Due to this low federal funds rate, interest rates on HELOCs are currently relatively low. Here's how the average interest rate has changed in 2021, according to amended data from S&P Global.
| Date | Average HELOC interest rate |
| May 2021 | 4,27 % |
| June 2021 | 4,25 % |
| July 2021 | 4,23 % |
| August 2021 | 4,19 % |
| September 2021 | 4,17 % |
| October 2021 | 4,16 % |
| November 2021 | 4,15 % |
| December 2021 | 4,14 % |
Since HELOC interest rates are variable, all could – and likely will – change in the future. Your interest rate could rise, especially if the economy recovers from the effects of the coronavirus.
While interest rates on HELOCs are currently low, they may not always remain so in the future, which should be taken into account when considering this line of credit, which could take five or ten years to repay.
Average HELOC interest rate by loan-to-value ratio
The amount you want to borrow and the value of your home play a role in considering the loan-to-value of your HELOC loan. Most lenders allow homeowners to borrow up to 80% of the value of their home minus the mortgage balance, while some lenders allow up to 90% minus the mortgage balance.
Banks view a HELOC with a loan-to-value ratio greater than 80% as a greater risk. Banks generally charge more for these loans. Here's how the average interest rate breaks down based on the loan-to-value ratio.
| Type of HELOC | Average interest rate |
| 50.000 $ 80 % Collateral value | 4,14 % |
| 100.000 $ 80% Collateral value | 4,00 % |
| 50.000 $ 90% loan-to-value | 4,52 % |
| 100.000 $ 90% loan-to-value | 4,36 % |
HELOC interest rates by credit score
As with any other type of loan, the amount you pay in interest is determined by your credit score. HELOCs are cheapest with a good credit score and become progressively more expensive as your credit score declines.
However, HELOCs are highly dependent on credit scores and are most available to those with FICO scores above 720. According to credit bureau Experian, the minimum FICO score for a HELOC is 680. However, some exceptions can be made, especially for those with a large amount of equity in their homes.
HELOC interest rates vary by credit score. Here are the typical maximum interest rates you can expect to pay for each loan tier, according to data from myFICO.com.
| FICO score | Typical maximum interest rate |
| 740-850 | 4,74 % |
| 720-739 | 5,12 % |
| 700-719 | 6,37 % |
| 670-699 | 7,74 % |
| 640-669 | 9,24 % |
| 620-639 | 10,74 % |
The best interest rates go to borrowers with FICO scores of 740 and higher, while borrowers with credit scores below 670 see big jumps in interest rates.
Average HELOC interest rate by state
Like the average mortgage rate, the average HELOC interest rate varies by state.
According to S&P Global, homeowners in Arizona, Wyoming, California and Nevada are paying the most for their home equity lines of credit with an average interest rate of over 4.5%. However, homeowners in Connecticut, West Virginia, North Carolina, and Massachusetts will see the lowest interest rates, with rates below 3.7%.
Here's what the average HELOC rate looks like in the U.S., assuming a loan-to-value of 80%:
| State | Average HELOC interest rate (%) |
| Alabama | 4.12 |
| Alaska | 4.24 |
| Arizona | 4.61 |
| Arkansas | 4.30 |
| California | 4.53 |
| Colorado | 3,98 |
| Connecticut | 3.68 |
| Delaware | 4.28 |
| District of Columbia | 4.24 |
| Florida | 4.40 |
| Georgia | 4.40 |
| Hawaii | 4.30 |
| Idaho | 3,97 |
| Illinois | 4.23 |
| Indiana | 3.84 |
| Iowa | 4.14 |
| Kansas | 4.42 |
| Kentucky | 3,88 |
| Louisiana | 4.17 |
| Maine | 3,88 |
| Maryland | 4.37 |
| Massachusetts | 3.73 |
| Michigan | 4.08 |
| Minnesota | 4.19 |
| Mississippi | 3,87 |
| Missouri | 4.27 |
| Montana | 4.49 |
| Nebraska | 4.23 |
| Nevada | 4.53 |
| New Hampshire | 4.03 |
| New Jersey | 4.42 |
| New Mexico | 4.30 |
| New York | 4.22 |
| North Carolina | 3.69 |
| North Dakota | 4.12 |
| Ohio | 4.01 |
| Oklahoma | 4.51 |
| Oregon | 4.10 |
| Pennsylvania | 3.86 |
| Rhode Island | 3,89 |
| South Carolina | 4.31 |
| South Dakota | 4.22 |
| Tennessee | 4.23 |
| Texas | 4.39 |
| Utah | 3.74 |
| Vermont | 4.05 |
| Virginia | 4.06 |
| Washington | 4.20 |
| West Virginia | 3.68 |
| Wisconsin | 4.11 |
| Wyoming | 4.56 |