Mortgage / Equity

Home Equity
Equity Line of Credit Fixed Rate

The best way to keep the cost of an equity line of credit as low as possible is to get a line of credit with a fixed interest rate.

Having a fixed interest rate means that the lender can’t raise the interest rate at some point. The interest rate adds to the amount you’ll have to pay back so an interest rate can increase your debt load and your payments. A high interest rate on a line of credit can lower the amount of equity you have available on a piece of property.

A fixed interest rate locks the same interest rate in as long as you have that line of credit. This means you will the same interest rate every time you use that line of credit. A fixed interest rate could conceivably save you hundreds of dollars on interest payments.

Avoid Lines of Credit with Adjustable Interest Rates

You should always try to avoid equity lines of credit that have adjustable interest rates. When you have an adjustable interest rate the lender can raise the interest rate. This means that you could end up making much higher payments.

Some lenders will try to trick you into getting a line of credit with an adjustable interest rate with special offers. Such special offers could include making a higher percentage of equity available as credit or a really low initial rate that increases later on. Always avoid such gimmicks they will cost you more money later on.

The way to save money is to get an equity line of credit fixed rate. You should be able to get this by asking the lender for it.

What Equity Line of Credit Fixed Rate Should You Get?

The way to determine the equity line of credit fixed rate you should be paying is to take advantage of the line of credit calculator features on websites like These features are software tools that let you see what interest rates are being offered on home equity lines of credit in your area.

When you go to these sights look for the acronym HELOC which stands for Home Equity Line of Credit. Clicking on this will give you access to the calculator. Typing the names of your state and city, the amount of credit you need and the status of your credit rating should give you a list of line of credit offers.

The list of line of credit offers that you get from such a comparison should contain the interest rate offered on a HELOC in your area. Getting the lowest interest rate offered will save you money on a line of credit. Using several different lender website can allow you to compare lines of credit from dozens of different lenders and get you a really good deal.

Read the Contract

Whenever you get an equity line of credit you should always read the contract carefully before signing it. Pay careful attention to the fine print and look to see if you are agreeing to a fixed rate or an adjustable rate.

There are unscrupulous lenders that will tell you are getting a fixed rate when you are actually getting an adjustable rate. If you see the words adjustable rate don’t sign the contract because you could setting yourself up for a nasty surprise later on.