Although rates on our favorite home equity lines of credit have edged up since December, they’re still the cheapest consumer loans you can get.
If you have 30% to 40% equity in your home and good credit you should be able to find a HELOC for under 5% APR. In some areas of the country, you could pay 4% or less.
Of course that’s a very big if after two years of steadily, and in some parts of the country, spectacularly falling home prices.
Banks opened less than $60 billion worth of new home equity loans and lines of credit in 2009, down from $430 billion in 2006, primarily because homeowners have much less equity to borrow against.
But if you can qualify, here are our favorite deals:
Nationwide Bank offers rates as low as 4.50%, with no annual fee, in all 50 states.
Citizens Bank charges as little as 3.74% in Pennsylvania, New Jersey, Delaware and all of the New England states except Maine. If you live in New York you’ll pay 3.99%. The $50 annual fee is waived the first year.
Dollar Bank makes loans in Pennsylvania and Ohio starting at 3.74% with a $50 annual fee.
ViewPoint Bank offers rates as low as 4.5% for loans in Texas and Oklahoma, with no annual fee.
Nevada State Bank makes loans nationwide starting at 4.25% with a $50 annual fee that’s waived if you’ve tapped your credit line the previous year.
BB&T offers loans in 11 southeastern states and Washington, D.C. starting at 4.25% with no annual fee.
Hoyne Savings Bank charges as little as 3.50% for loans in the Chicago area with a $25 annual fee.
To qualify for one of these HELOCs you need:
- A credit score of at least 660, with the exception of Nationwide Bank, which requires a minimum score of 720.
- To retain 20% equity in your home after the line of credit is added on to the balance of your primary mortgage.
Click here to compare these with the best HELOC rates from other lenders in your area.