What Interest Rate Can I Expect with a HELOC?

 based on the current prime interest rate (as discussed
This is one of the most common questions that wein our previous articles) as well as your credit score.
receive at – and it is quite a loaded question. RatherThe third consideration that will be made is the
that displaying charts of regional and national interestdemographics and market trends surrounding the area
rates as they related to HELOCs, we will first discussthat you live in. If you live in an area that has been
the components that will be used in making aespecially hit hard by the housing crisis then a bank or
determination of how much interest you will pay. First,finance company may decide to increase the interest
the quality of your home – through a real estaterate on your HELOC Equity facility due to the
appraisal will be determined. Second, your creditincreased risks associated with housing trends in your
reports will be pulled as will a calculation of your creditarea. The final consideration that will be made is how
score. Third, the equity in your home will be determined.much capital you are seeking. The more debt capital
This will allow the bank or mortgage company toyou are seeking – the higher the aggregate interest
make an appropriate determination as to how much towill be.
potentially grant you through a HELOC Equity credit 
facility.As of April of 2010, the average interest rate paid on a
 $75,000 line of credit has been hovering around 8.75%,
As we discussed earlier, in almost all circumstances, awhich is about three to four percentage points above
home equity line of credit is a variable interest ratethe prime rate. For comparison, a 30 year fixed
debt instrument. The interest rate you will pay, oncemortgage currently has a prime interest rate of 4.4%.
the above issues have been discussed, will be primarily