CHICAGO HELOC RATES TODAY
Current HELOC rates in
Chicago, IL.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
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Key Points
• A home equity line of credit, known by the acronym HELOC, is a revolving line of credit secured by your home equity, that you can draw on as you need it.
• A HELOC can be useful for managing a large or ongoing expense, including a home remodel or college tuition, or for paying off higher-interest debt.
• The rates lenders advertise for HELOCs are tied to the prime rate, as well as to individual borrowers’ credit scores and scenarios.
• HELOCs tend to have variable rates, which means that monthly payments can fluctuate over the life of the line of credit.
• It’s important to understand the risks: If you default on a HELOC, it can lead to foreclosure on your home.
Introduction to HELOC Rates
You’ve found our comprehensive guide to home equity line of credit (HELOC) interest rates in Chicago, Illinois, which can help you make well-informed financial decisions about how to get equity out of your home, whether you are thinking about borrowing funds for a home renovation or paying for another significant expense. The following information will cover factors that influence interest rates on HELOCs, and the benefits and risks of opening one. We will also equip you with an understanding of current market conditions, and tell you how you can find and qualify for the best available interest rates.
What Is a HELOC?
Before you begin making decisions about borrowing, you’ll want to understand just what a home equity line of credit is. A HELOC is a credit line that a homeowner can set up to draw on their home equity. It will let you borrow against your accrued equity as needed, up to a limit set by your lender. With a HELOC, you must pay interest on the money you pull out, along with repaying the principal. Your home is the collateral securing your credit line. This, of course, means that if you don’t repay what you borrow, you could face foreclosure.
What is your home equity? It’s the difference between your home’s value and your mortgage balance. To qualify for a HELOC, you typically need to have at least 15% equity, and you can generally borrow up to 90% of the equity you’ve accrued. HELOC interest rates are variable, which means they often start out lower than rates on unsecured loans.
As a borrower, your HELOC would have two main phases:
The Draw Period
During the initial draw period (usually 10 years) of your HELOC, you can access funds by drawing on an as-need basis. During this time, you’ll likely only pay interest on what you pull out. Most lenders will not require you to pay down the principal, although you can if you wish to pay off the credit line and draw on it again. A HELOC interest-only calculator can be useful during the draw period, as it will tell you the monthly interest you’ll pay on withdrawals.
The Repayment Period
After the draw period ends, your 10- to 20-year repayment period will begin. Monthly payments will increase at this point, because you’ll begin to repay the principal along with the interest. Since HELOC interest rates tend to be variable, the amount you pay monthly may go up or down as time passes and rates change. A HELOC monthly payment calculator can help you compute what you might need to budget for payments.
Where Do HELOC Interest Rates Come From?
Lenders derive interest rates for HELOCs and different types of home equity loans from the prime rate — a figure that moves up or down with the Federal Reserve’s economic maneuvers. Lenders also tack on a margin, and that is why rates can vary widely in the marketplace. The national average interest rate for a HELOC in early September 2025 was 8.10%, but rates have historically ranged from 6.63% to 15.65%.
Getting rate quotes from multiple lenders is a smart thing to do before you apply for a HELOC. Your individual financial profile, including your credit score, level of debt, and the amount of equity you’ve built up in your home, will influence the interest rate you’ll be offered. A higher credit score and more equity are likely to tip the scales in your favor.
How Interest Rates Impact HELOC Affordability
You will need to invest time and energy to effectively shop around to get the best HELOC interest rate. But that should make a big difference in the end in terms of what you’ll end up paying. Even a small reduction in interest rate, if you can find one, will mean you pay less interest over the life of the HELOC. For example, if you were to withdraw $50,000 from a HELOC during your 10-year draw period, the difference in the interest you’d pay monthly based on an 8.50% versus a 9.50% rate is $42 per month (your monthly payment would be $354 or $396, respectively).
If you repay principal plus interest on that $50,000 during a 20-year repayment period, monthly payments at the lower interest rate would be $620. At the higher rate, they would be $647. That may not seem like such a large difference, but think about this: Over the full repayment term, the lower interest rate could save you more than $3,000. Remember, HELOCs have variable interest rates, so the real numbers could end up crunching somewhat differently.
Check out this chart comparing HELOCs at different credit line amounts, terms, and interest rates.
| Repayment Amount | Term | Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 | $100,746 |
| 7.00% | $775 | $86,072 | ||
| 10 years | 8.00% | $1,213 | $45,593 | |
| 7.00% | $1,161 | $39,330 | ||
| $50,000 | 20 years | 8.00% | $418 | $50,373 |
| 7.00% | $388 | $43,036 | ||
| 10 years | 8.00% | $607 | $22,797 | |
| 7.00% | $581 | $19,665 | ||
| $25,000 | 20 years | 8.00% | $209 | $25,186 |
| 7.00% | $194 | $21,518 | ||
| 10 years | 8.00% | $303 | $11,398 | |
| 7.00% | $290 | $9,833 |
HELOC Interest Rate Trends
While it’s not a sole predictor when you’re looking at HELOC rates, the prime interest rate can be a helpful gauge when you’re doing rate research. The prime rate has bounced up and down since 2018, for example — it hit a low of 3.25% back in 2020 and a high of 8.50% in 2023. Knowledge of this history will give you perspective on current rates lenders are offering in Chicago.
| Date | U.S. Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Variable vs. Fixed Interest Rates
We know that HELOCs most often come with variable rates, also known as adjustable rates. These rates tend to go up or down over time, based on market conditions. They move at intervals and may be limited by caps that the HELOC agreement should spell out. But overall, the interest amount you pay may change along with the market, and you’ll want to be aware that your HELOC will be subject to possible interest rate changes before you sign up. You may prefer a steady monthly payment, and if that’s the case, a home equity loan might be preferable for you. Keep reading for an explanation of how those work.
Helpful Tools and Calculators
If you’re thinking about jumping on a HELOC offer, it’s a good idea to first estimate what costs it will involve. Online tools can help you do this. Here are a few particularly useful ones.
Run the numbers on your HELOC.
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Home Equity Loan
CalculatorEnter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
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HELOC Payment
CalculatorPunch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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HELOC Interest Only
CalculatorUse SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
How to Qualify for a Competitive HELOC Rate
If you want to secure a desirable HELOC rate, start by taking a look at your personal numbers. Most important here will be your credit score, your debt-to-income (DTI) ratio, and your level of home equity. Lenders expect you to have at least 15% equity in your home, and it can’t hurt to have more. Here are some tips to help you ensure your finances pass muster before you submit your application.
Improve Your Credit Score
Maintaining a credit score of 700 or above is a key to unlocking the very best HELOC rates. You can ratchet your number higher by paying your bills on time and chipping away at any credit card balances you’ve been accumulating. Review your credit reports regularly for inaccuracies. By disputing and removing errors, you can be sure your score reflects your real financial stability.
Calculate Your Debt-to-Income Ratio (DTI)
Knowing your debt-to-income ratio requires only a simple calculation: Divide your total monthly payments (debts you’re paying off) by your gross monthly income. Most HELOC lenders want you to have a DTI under 50% to qualify. If you want to be eligible for the best HELOC interest rates in the Chicago area, you’ll do better to get your DTI below 36%. Paying down debt (or growing your earnings) are the surest ways to a better DTI.
Application Process for a HELOC in Chicago
If you’d like a quick snapshot of the HELOC rates available in Chicago, along with an estimate of the amount you could qualify for, you can prequalify online. After investigating lenders and rates available to you locally, you can decide if you want to move on to the full application. It will require detailed financial information and property specifics. Here is a step-by-step for the process:
Step 1: Run the Numbers
Before you start working on your HELOC application, it’s advisable to take a very close look at your financial profile. Check your credit score, not at just one but at all three major credit bureaus. You’ll likely need at least a 640 credit score to qualify. Calculate your DTI ratio and your home equity, and understand that the latter will grow as long as you make regular payments on your home loan and take efforts to increase your home’s value (think: curb appeal).
Once again, you can figure out your unofficial home equity percentage by subtracting your outstanding mortgage balance from your home’s estimated value and dividing the answer by that home value number. A formal appraisal may shift that approximate percentage a bit. You definitely need at least 15% equity to proceed.
Step 2: Compare Lenders
Want to find the best HELOC lenders in Chicago? Start by seeing which ones offer the most competitive rates and terms. Look at each institution’s interest rates and qualification criteria, the minimum and maximum amounts they will let you borrow, fees, and their draw and repayment period timespans. HELOC terms vary a lot among lenders, so don’t rush past the fine print.
Step 3: Submit Your Application
Gather the necessary documentation, which will include government-issued ID, recent pay stubs, W-2 forms, and your most recent tax return. If you’re self-employed, a lender may ask you for both a profit-and-loss statement and your tax returns from the last two years. Paperwork related to your property will include the declaration page from your homeowners insurance policy. You can most likely submit your HELOC application online, over the phone, or in person.
Step 4: Get an Appraisal
A home appraisal is a professional, objective analysis to determine your home’s value. It typically costs around $300 to $600 to get one. If your property appraises for $425,000, for example, and that’s more than your mortgage’s current balance, a lender will have more incentive to approve you for a HELOC. That makes this an important step that can help you determine how much equity you can potentially access. It will also influence your HELOC agreement’s terms. Remember, prospective lenders will tell you what kind of appraisal you require, so wait for instructions after you submit the application.
Step 5: Prepare for Closing
Once you’re approved for your HELOC, but before you can access funds from your credit line, you’ll have to sign your agreement and pay your closing costs. Some lenders will make the funds available to you immediately after your closing; others may require you to wait a few days before you can draw on your credit line.
Closing Costs and Fees
A HELOC typically involves lower closing costs than a home mortgage loan or a cash-out refi. The greatest expense tends to be the fee for the appraisal, but other line items include a title search, and application, origination, and administrative fees. Some lenders charge annual maintenance fees that can be up to $250 per year. Lenders sometimes offer to reduce or waive closing costs, but keep in mind that it’s often in exchange for a higher interest rate.
Recommended: HELOC vs. Home Equity Loan
Tax Benefits and Considerations
At this point, homeowners may tax-deduct HELOC interest if the funds they borrow go towards making significant improvements on the primary residence. This policy may change, however, so talk to a tax advisor, be sure deductions apply to your specific circumstances, and keep your invoices and receipts.
Alternatives to HELOCs
You can get equity out of your home with financial tools other than a HELOC, including a home equity loan or a cash-out refinance. Before you decide on a HELOC, you’ll want to consider all of your options — another popular choice is a personal loan.
Home Equity Loan
What is a home equity loan? It’s an option that gives the borrower a lump-sum loan at a fixed interest rate. You can typically use it to borrow up to 85% of your accrued home equity. Home equity lenders look for a credit score of 680 or higher, generally, and many would like your score to be 700 or above if you want their best rate.
If you have a specific need for a defined amount of money and you prefer fixed monthly payments that are predictable over the life of the loan, this might be an attractive option. A home equity loan calculator can help you predict the maximum loan amount you’ll qualify for.
Cash-Out Refinance
This is another option that will let you borrow more than you currently owe on your mortgage, and then collect the extra funds in cash. A cash-out mortgage refinance with a fixed or variable rate is likely open to you if your credit score is 620 or more and your DTI ratio is under 43%.
What is the actual difference between a cash-out refinance vs. home equity line of credit? The refinance option will require just one monthly payment, while with a HELOC you’ll have a mortgage payment and a credit line payment monthly.
Personal Loan
One up-front advantage of a personal loan is that you don’t risk foreclosure if you find yourself unable to make payments, since this option is typically unsecured. Borrowers repay these loans in regular, fixed installments over two- to seven-year periods. Lenders look for borrowers’ credit scores to be 610 or higher for these loans. They are pretty speedy to get — another advantage. But personal loans almost always carry higher interest rates than those on HELOCs.
The Takeaway
If you’re considering applying for a HELOC in Chicago, start by weighing both the potential benefits and the possible risks you’ll take on by activating one. A HELOC offers financial flexibility, It can come with more attractive interest rates than other options, making it a well-suited borrowing choice to manage a large, ongoing expense. But it also brings the risk of foreclosure on your home should you default. Always realistically assess your financial situation before taking out a line of credit. You’ll need a credit score of at least 640 to qualify, and you should look at multiple lenders’ rates if you think a HELOC is the right pick for you.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.
FAQ
Is a HELOC a wise move at this point?
A HELOC could be a good move for you if you’re looking for flexibility to access funds in increments for big expenses, and you feel comfortable signing up for a loan with a variable interest rate — especially if a prime rate drop is in the forecast. But if set payments better suit you, the stability of a home equity loan with a fixed interest rate might be a better choice.
What would the monthly payment on a $100,000 HELOC?
It will depend on your interest rate, repayment terms, and what portion of the credit line you use upfront. The payment on a $100,000 HELOC, if you need to borrow the full amount and you have an 8.00% rate, might be around $667 per month in interest during the draw period. During the repayment phase, your monthly payment would rise to more than $1,200 because you’d start paying down the principal, too. HELOCs’ variable interest rates mean your payments will vary.
Do you need an appraisal to get a HELOC?
Yes, you will need a home appraisal if you want to open a home equity line of credit. You’ll want to wait for your potential lender for instruction, so you know how your home should be appraised in order to meet their terms. This appraisal is necessary to help the lender determine your home’s market value right now, a number that will impact the amount you will be approved to borrow.
Will a HELOC have an impact on your credit score?
Opening a HELOC will involve a hard inquiry on your credit report, and yes, that can cause a slight, temporary dip in your credit score. But if you manage the HELOC responsibly, it can build your credit score down the line. (Missing payments, on the other hand, will definitely make you less creditworthy.)
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More HELOC resources.
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What is a Home Equity Line of Credit
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