5 steps to finding the best HELOC rates in Canada Canadian Mortgages Inc. from canadianmortgagesinc.ca Best HELOC: The Ultimate Guide for Homeowners Homeownership comes with a lot of responsibilities, including the need to maintain and improve your home. Whether you're looking to fund a home renovation project, pay off high-interest debt, or cover unexpected expenses, a Home Equity Line of Credit (HELOC) may be the solution you need. In this comprehensive guide, we'll explore the best HELOC options available to homeowners, the pros and cons of each, and what you need to know before applying. HELOC 101: What is a Home Equity Line of Credit? Before diving into the best HELOC options, let's review what a HELOC is and how it works. A HELOC is a revolving line of credit that allows homeowners to borrow against the equity they've built up in their home. Equity is the difference between the current market value of your home and the amount you owe on your mortgage. For example, if your home is worth $500,000 and you owe $300,000 on your mortgage, you have $200,000 in equity. A HELOC works similarly to a credit card, but with your home as collateral. You're approved for a maximum credit limit, and you can borrow up to that limit as needed. You'll make monthly payments on the amount borrowed, plus interest. HELOCs usually have a draw period of 10 years, during which you can borrow and repay as much as you'd like, followed by a repayment period of 10-20 years. HELOC vs. Home Equity Loan: What's the Difference? It's important to note that a HELOC is not the same as a home equity loan. While both allow you to borrow against your home's equity, a home equity loan is a lump sum loan with a fixed interest rate and regular monthly payments. A HELOC, on the other hand, is a revolving line of credit with a variable interest rate and flexible repayment options. Now that we've covered the basics, let's dive into the best HELOC options for homeowners. Topic 1: Best HELOC for Low Interest Rates If you're looking for a HELOC with low interest rates, consider these options: 1. TD Bank: TD Bank offers a competitive variable interest rate starting at 3.99% APR (as of October 2021) and a fixed-rate option starting at 4.75% APR. TD Bank also offers a 0.25% interest rate discount for customers who have a TD Bank personal checking or savings account. 2. Chase: Chase offers a variable interest rate starting at 3.50% APR (as of October 2021) and a fixed-rate option starting at 4.99% APR. Chase also offers a 0.25% interest rate discount for customers who have a Chase personal checking account. 3. PNC Bank: PNC Bank offers a variable interest rate starting at 3.75% APR (as of October 2021) and a fixed-rate option starting at 4.99% APR. PNC Bank also offers a 0.25% interest rate discount for customers who have a PNC Bank personal checking account. Topic 2: Best HELOC for Large Credit Limits If you need a large credit limit for your HELOC, consider these options: 1. Wells Fargo: Wells Fargo offers HELOCs with credit limits up to $1 million, depending on your creditworthiness and the equity in your home. Wells Fargo also offers a variable interest rate starting at 3.75% APR (as of October 2021). 2. Bank of America: Bank of America offers HELOCs with credit limits up to $1 million, depending on your creditworthiness and the equity in your home. Bank of America also offers a variable interest rate starting at 4.24% APR (as of October 2021). 3. U.S. Bank: U.S. Bank offers HELOCs with credit limits up to $750,000, depending on your creditworthiness and the equity in your home. U.S. Bank also offers a variable interest rate starting at 3.50% APR (as of October 2021). Topic 3: Best HELOC for Flexible Repayment Options If you're looking for a HELOC with flexible repayment options, consider these options: 1. BB&T: BB&T offers a unique HELOC option called the Home Equity Line of Credit with Prime Advantage, which allows you to convert all or a portion of your balance to a fixed-rate loan. This can be helpful if you want to lock in a low interest rate for a portion of your balance while keeping the rest as a variable rate line of credit. BB&T also offers a variable interest rate starting at 3.75% APR (as of October 2021). 2. SunTrust: SunTrust offers a HELOC option called the Smart Equity Account, which allows you to make interest-only payments during the draw period. This can be helpful if you want to keep your monthly payments low during the draw period. SunTrust also offers a variable interest rate starting at 3.25% APR (as of October 2021). 3. Citizens Bank: Citizens Bank offers a HELOC option called the Home Equity Line of Credit with Rate Cap Protection, which allows you to cap your variable interest rate at a certain level for the life of the line of credit. This can be helpful if you're concerned about interest rate increases. Citizens Bank also offers a variable interest rate starting at 3.25% APR (as of October 2021). Topic 4: Best HELOC for Fast Approval and Funding If you need your HELOC approved and funded quickly, consider these options: 1. Rocket Mortgage: Rocket Mortgage offers a streamlined HELOC application process that can be completed entirely online. You can get pre-approved in minutes and funded in as little as 10 days. Rocket Mortgage also offers a variable interest rate starting at 3.25% APR (as of October 2021). 2. Figure: Figure offers a unique HELOC option called the Figure Home Equity Line, which allows you to get approved and funded in as little as 5 days. Figure also offers a variable interest rate starting at 2.88% APR (as of October 2021). 3. Discover: Discover offers a HELOC option that allows you to get pre-approved in minutes and funded in as little as 30 days. Discover also offers a variable interest rate starting at 3.99% APR (as of October 2021). Conclusion A HELOC can be a great option for homeowners who need to borrow against their home's equity. However, it's important to carefully consider your options and choose the best HELOC for your specific needs. Whether you're looking for low interest rates, a large credit limit, flexible repayment options, or fast approval and funding, there's a HELOC out there that's right for you. Take the time to compare your options and choose the best one for your financial situation. Summary Table HELOC Provider | Variable Interest Rate Starting At | Fixed Interest Rate Starting At | Credit Limit | Flexible Repayment Options | Fast Approval and Funding --- | --- | --- | --- | --- | --- TD Bank | 3.99% APR | 4.75% APR | Dependent on equity | No | No Chase | 3.50% APR | 4.99% APR | Dependent on equity | No | No PNC Bank | 3.75% APR | 4.99% APR | Dependent on equity | No | No Wells Fargo | 3.75% APR | Not offered | Up to $1 million | No | No Bank of America | 4.24% APR | Not offered | Up to $1 million | No | No U.S. Bank | 3.50% APR | Not offered | Up to $750,000 | No | No BB&T | 3.75% APR | Not offered | Dependent on equity | Yes | No SunTrust | 3.25% APR | Not offered | Dependent on equity | Yes | No Citizens Bank | 3.25% APR | Not offered | Dependent on equity | Yes | No Rocket Mortgage | 3.25% APR | Not offered | Dependent on equity | No | Yes Figure | 2.88% APR | Not offered | Up to $1 million | No | Yes Discover | 3.99% APR | Not offered | Dependent on equity | No | Yes