Ahome equity line of credit (HELOC)fixed-rate option is a line of credit based on yourhome equity, which you can borrow against as little or as much of that credit line as you want. The fixed-rate option comes in when you can convert all or some of the money you borrowed on the HE...
Fixed-rate conversion fee: Some lenders allow borrowers to convert a variable-rate HELOC into a fixed-rate one before the draw period ends, but there may be a charge. Early closure fee: If you close your account before the agreed-upon time (usually within the first three years), your len...
More and more lenders are offering the option to convert some or all of your HELOC balance into a fixed-rate loan for a set period of time, sometimes without a fee. This is a good option if you want to lock in the interest rate without worrying about potential fluctuations in the market...
Conversion option During your repayment period you may have an option to convert your HELOC into a home equity loan with a fixed rate and fixed monthly payment that includes principal and interest. This option may make sense for you if you want a fixed payment while you're paying back a HE...
What’s a fixed-rate option for a HELOC? Once you close on a HELOC, you have the option to lock in a fixed interest rate for up to 20 years on some or all of the money you borrow. That way, if interest rates rise in the future, your fixed-rate option(s) won’t. ...
Some HELOCs come with a conversion option that allows youto set a fixed rateon some or all of your balance. This might help shield your budget from fluctuating-rate increases. Disadvantages HELOCs havevariable rates. In a rising-interest rate environment, that means you’ll pay more monthly....
Using a HELOC to pay off your mortgage could be a better option than refinancing if the HELOC offers a lower interest rate than your current mortgage or if you need repayment flexibility. However, since HELOCs often have variable rates, the long-term costs can be unpredictable compared to the...
A home equity loan charges interest at a fixed rate, while most HELOCs charge interest at a variable rate. Fixed interest rates provide you with predictable repayments. This makes it possible to schedule consistent monthly repayment amounts over the life of the loan. ...
There are two types ofhome equitylending: afixed-rateloan for a specified amount of money or avariable-rateline of credit. Depending on your need for the funds and how you plan to use them,one option may work better than the other. Interest paid on either loan, like the interest on yo...
If a fixed-rate HELOC is something that you want (or may want), you should ask about it when getting quotes from potential lenders. NerdWallet’s roundup of the best HELOC lenders is a good place to start your search. It notes which lenders offer a fixed-rate option. Once you get a ...