How to Compare HELOC Rates in Banks
- 1). Use online resources to compare HELOC rates from financial institutions across the country. Make a list of companies that offer the most competitive rates so you can investigate potential offers further.
- 2). Determine if the published rate is an introductory offer. Ask the lender about such conditions before choosing a loan. Financial institutions make introductory offers to generate new business using terms that can last only a few months. After the offer expires, your line of credit is assessed a new rate that can make monthly payments higher.
- 3). Inquire about lifetime caps. HELOC rates are not fixed interest rates; they fluctuate with the prime lending rate. Ask your lender about a cap on the line to protect you from paying an extremely high interest rate if the prime rate increases significantly.
- 4). Determine if the lender offers periodic caps, or the maximum amount of percentage points your interest rate can rise in a specific time frame. Some lenders offer HELOC rates that, for example, might not increase more then one-half of a percentage point in six months.
Source...