home equity line of credit heloc rates for loans with a 20year repayment period ticked down slightly to an average of 660— according to the latest rates from bankrate for the week ending may 15 and for 10year loans rates rose slightly at 471 you can see the lowest rates you might qualify for here what you need to know about helocs simply put helocs function as second mortgages as they’re revolving lines of credit that are taken out in the form of a loan based on the amount of equity someone has in their home helocs are most commonly taken out for remodeling projects home repairs or other large expenses though they can be used for just about anything that requires a lump sum of cash if you’re not sure exactly how much money you’ll need a heloc is probably the best type of loan for you because once a heloc has been funded it’s up to the borrower’s discretion to use as much of the money as they want at any point during the draw period the first 10 years of the loan during this period the borrower is only required to make interest payments though principal payments can be made as well after the draw period ends and the repayment period begins money can no longer be extracted and the borrower must make principal and interest payments helocs tend to offer competitive interest rates see the lowest rates you might qualify for here because lenders have the guarantee of collateral in the form of the borrower’s home equity for this reason and because helocs offer borrowers flexibility in terms of how and when the funds can be used they’re a popular choice for homeowners who need to pay off highinterest debt or are starting a renovation that could change in scope while fixedrate helocs exist many come with variable rates meaning borrowers may find themselves with lower introductory rates followed by rates that fluctuate over the course of the loan helocs are generally easy to qualify for as long as you have a considerable amount of equity in your home but it’s worth considering that helocs can cost money upfront so you should expect to pay hundreds of dollars for appraisal fees application fees title search fees and more to pay yourself back for these pricey costs you’ll want to be sure you take out a loan big enough to cover them how to get a heloc if you’re assuming you’ll get a huge heloc because you have a lot of equity in your home don’t be so sure lenders like to make sure borrowers maintain a 20 equity stake in their home so if you need more money than a heloc can provide you may want to consider a loan that doesn’t require home equity as collateral to ensure you’re getting the most competitive rate based on your personal financial picture experts recommend comparison shopping and getting quotes from 3 to 5 different lenders before applying for a heloc