Compare HELOC rates in Winston-Salem.

Introduction to HELOC Rates

Welcome to your guide to home equity line of credit (HELOC) rates in Winston-Salem, North Carolina. We’re here to walk you through the ins and outs of these rates so you can make a smart decision about how to get equity out of your home. You’ll gain insights into the factors that sway HELOC rates, the perks and potential pitfalls of HELOCs, and tips on comparing lenders’ offers. Whether you’re dreaming of a home makeover, aiming to streamline debt, or have your sights set on a big-ticket purchase, this info will empower you to tap into your home equity with confidence.

What Exactly Is a HELOC?

A HELOC is a revolving credit line secured by your home equity (your home’s value minus the balance you still owe on your home loan). To qualify, you typically need 15% equity, and you can usually borrow up to 90% of that equity. Because your home serves as collateral for the HELOC, it’s important to have a plan in place to make payments when it’s time to repay the loan — otherwise you risk foreclosure. A HELOC has two phases:

Recommended: Different Types of Home Equity Loans

Where Do HELOC Interest Rates Come From?

Lenders peg HELOC rates to the prime rate, a figure that is in turn influenced by the Federal Reserve’s policies. Each lender then adds a margin to the prime rate, resulting in the diverse rates you see in the market. Your individual financial profile, from credit score to income, and the equity you’ve built in your home, also enter the equation. Because there are so many variables, it’s a good idea to get rate quotes and to examine the terms offered by a variety of lenders. Only then can you be confident that you’re getting the best available rate.

How Interest Rates Impact HELOC Affordability

The interest rate on your HELOC has a big impact on how much you’ll pay to borrow funds. Even a small difference in the rate can add up to a lot of extra interest over the life of the loan.

Consider this example: You borrow $50,000 with a HELOC and have a 10-year repayment term. If your interest rate was 8.00%, your monthly payment would be $607 and total interest paid would be $22,797. But if you instead had a 7.50% rate, your monthly payment would be $581 and total interest $19,665. HELOCs have variable interest rates so your exact results may differ but the need to seek out a low starting interest rate holds true.

HELOC Interest Rate Trends

Keeping an eye on the prime rate can give you a sense of where HELOC rates may be headed. And having a sense of the rate’s history can help put current HELOC interest rates in Winston-Salem in context. The prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023. You may be tempted to wait to apply for a HELOC until rates are at their lowest, but if you have a need to borrow now, your best bet is to move ahead while making sure you can qualify for the lowest of the available rates.

Variable vs. Fixed Interest Rates

HELOCs often come with variable (also called adjustable) interest rates, meaning they can change over the life of the loan. Because they’re tied to the market, they can go up or down. Variable HELOC rates aren’t as predictable as fixed rates, but they do have built-in controls that dictate how large a change you might see in your rate, how frequently it can adjust, and whether there is a rate cap. All of this would be in the HELOC agreement, so it’s important to look at the details as you are considering HELOC offers.

Helpful Tools and Calculators

Before you apply for a HELOC, you can use online tools to get an estimate of what your monthly payments and interest costs might be. Here are some calculators that will be useful during the borrowing process.

How to Qualify for a Competitive HELOC Rate

To obtain the best available HELOC rate, you’ll want to focus on a few key factors. First, make sure you have the necessary home equity. Subtract your mortgage balance from your home’s estimated value. Divide the answer by the home value, and you’ll arrive at a percentage of equity. If it’s 15% or better, you could qualify. Also take the time to address your credit score and debt-to-income (DTI) ratio:

Improve Your Credit Score

Keeping your credit score at 700 or above is important for securing the best HELOC rates, though you can qualify for a HELOC with a score of 640 or better. You have the power to pump up your credit score. Pay your bills on time and whittle down credit card balances, and you’ll be on the right track. Try not to use the maximum credit line allotted on your credit cards. Avoid opening new accounts or closing old ones in the months preceding your HELOC application. And if you spot any errors on your credit report, dispute them promptly. Every point you add to your credit score is a step closer to a great HELOC rate.

Calculate Your Debt-to-Income (DTI) Ratio

Your DTI ratio is a simple calculation: Tally up your monthly debt payments and divide that by your gross monthly income. You can get a HELOC with a DTI under 50%, but for the best interest rates, you’ll want to be at 36% or less. Get there by paying off debts, increasing income, or both.

Application Process for a HELOC in Winston-Salem

Many lenders offer the convenience of an online HELOC prequalification process, which can streamline your application journey. This initial step can give you a glimpse of the HELOC rates in Winston-Salem that you might be eligible for. From there, you can move to the full application process:

Closing Costs and Fees

HELOC closing costs are generally more affordable than those associated with a home purchase or mortgage refinance. Appraisal fees can range from $300 to $600 and are often the most substantial expense. A title search, if required, can cost $100 to $450. Other potential costs include application, origination, and administrative fees. Annual maintenance fees (up to $250) and transaction, inactivity, or early termination fees may also apply, depending on the lender.

Tax Benefits and Considerations

A HELOC often comes with some tax benefits. Homeowners can deduct HELOC interest for the 2025 tax year as long as the funds are used to significantly improve the residence. These tax guidelines could change in 2026 and beyond, so connect with a tax advisor to make sure you’re on the right track with tax planning and to see if you’re eligible for HELOC-related deductions. You will have to itemize deductions on your return to claim this benefit.

Alternatives to HELOCs

A HELOC isn’t your only option if you’re looking to finance a home project or pay down high-interest debt. Consider these alternatives to find the best fit for your financial goals.

The Takeaway

When considering a HELOC in Winston-Salem, it’s important to weigh the benefits and risks. HELOCs offer flexibility and potentially lower interest rates than personal loans, but they also come with the possibility of losing your home if payments are not made. If you’re thinking about a HELOC, seek out rates and study terms offered by multiple lenders in order to find the best fit for your situation.

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.

View your rate

Compare HELOC rates in Columbus.

Introduction to HELOC Rates

This article will give you a comprehensive understanding of home equity line of credit (HELOC) rates in Columbus, Ohio. By the time you’re through, you’ll be well versed in the factors that sway HELOC rates, the advantages and potential pitfalls of these financial tools, and how to sift through various lenders to find the best fit for your needs. Armed with this knowledge, you’ll be ready to make a well-informed decision and approach the application process with confidence.

What Is a HELOC?

A HELOC is a smart way to leverage the equity you’ve built up in your home by paying down your home loan. (Your equity is the difference between your home’s value and the remaining mortgage balance.) With a HELOC, you can borrow up to 90% of your equity. You can use a home equity loan calculator to determine how much you might borrow. There are two phases to a HELOC.

A HELOC has two phases, each with different parameters:

Where Do HELOC Interest Rates Originate?

HELOC interest rates are tied to the prime rate, which in turn is influenced by the Federal Reserve’s policies. Each lender adds a margin to the prime rate, creating the range of HELOC rates you see in the market. Lenders also take into account individual borrower factors, such as credit score, debt-to-income (DTI) ratio, income, and the amount of equity in the home. This is why it’s important to seek out rates from multiple lenders before you settle on a lender to partner with for your HELOC.

How Interest Rates Impact HELOC Affordability

The interest rate on your HELOC can make a big difference in how affordable it is. Even a small change in the interest rate can add up to a lot of extra interest over the life of the loan. For example, on a $50,000 HELOC with a 20-year term, a one-percentage-point rate increase from 7.00% to 8.00% can bump your monthly payment up by $30 and increase the total interest paid over the life of the HELOC by almost $7,000.

Recommended: HELOC vs. Home Equity Loan

HELOC Interest Rate Trends

When you’re thinking about how to get equity out of your home, you’ll probably start paying close attention to the prime rate. Doing so may shed some light on what to expect with HELOC rates in Columbus. Having a sense of the history of the prime rate can also help give you some perspective on the rates you are seeing. The prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023.

Historical Prime Interest Rate

Variable vs. Fixed Interest Rates

HELOCs usually come with variable (also called adjustable) interest rates, which track the prime rate’s ups and downs. As the prime rate shifts, so will your HELOC rates, at intervals and within limits that are spelled out by your HELOC agreement.

Helpful Tools & Calculators

Before you apply for a HELOC, you can use online tools to estimate monthly payment and total interest costs. Here are three of our favorite tools:

How to Qualify for a Competitive HELOC Rate

To secure an attractive HELOC rate, it’s all about the numbers. Make sure you have at least 15% equity in your home (ideally more) and from there, focus on boosting your credit score and keeping your debt-to-income (DTI) ratio low. Here are the details:

Improve Your Credit Score

You’ll need a credit score of 700 or above to qualify for the most attractive HELOC rates in Columbus. The good news is, you have the power to boost your score. Make all your payments on time and reduce your credit card balances. Also check your credit report for any inaccuracies and dispute them if needed. Keep old credit accounts open and use them responsibly, but avoid opening new accounts in the run up to your HELOC application.

Calculate Your Debt-to-Income (DTI) Ratio

Your DTI ratio is the total of your monthly debt payments divided by your gross monthly income. To get a HELOC, you’ll need a DTI under 50%, but for the best interest rates in Columbus, aim for 36% or lower. To improve your DTI, reduce your debts, increase your income or both.

Application Process for a HELOC in Columbus

Some lenders offer the option to prequalify for a HELOC through their online portal, which can make the application process more streamlined. Prequalifying can give you an idea of the HELOC rates in Columbus that you might be able to get, as well as the amount of equity you could potentially access. Prequalifying involves providing some basic financial information and can be done fairly quickly, which can help you make more informed decisions before you formally apply by following these steps.

Recommended: Different Types of Home Equity Loans

Closing Costs and Fees

The good news is that HELOC closing costs are generally more affordable than those associated with a home purchase or refinance. In addition to the appraisal fee, you might encounter application, origination, title search, and administrative costs, as well as annual maintenance fees that could be as much as $250.

Tax Benefits and Considerations

As a homeowner, you can take advantage of deducting HELOC interest when the funds are used to substantially improve your primary residence. The current tax laws are in effect through 2025. To understand the tax implications and confirm your eligibility for HELOC-related deductions this year or in the future, it’s best to consult with a tax advisor.

Alternatives to HELOCs

Other financing options to consider before committing to a HELOC are home equity loans, cash-out refinancing, and personal loans. Let’s take a closer look at each of these options.

The Takeaway

HELOCs are a flexible way to tap into your home’s equity for large expenses, debt consolidation, or home improvements. Keep in mind that if you miss payments, your home could be at risk of foreclosure. HELOC rates can vary, so shop around among different lenders. The interest you pay may be tax-deductible if you use the money for home improvements.

Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.

View your rate

Compare HELOC rates in Wilmington.

Introduction to HELOC Rates

In this guide, we’ll cover all the details of home equity line of credit rates in Wilmington, North Carolina, so you can understand how to get equity out of your home and the conditions that might impact the interest rate you receive. We’ll also discuss the benefits and risks of using a HELOC, how to qualify for a competitive rate, and the tools you can use to estimate your costs. By the end, you’ll have a better idea of whether a HELOC is the right financial tool for you and how to apply for one.

What Exactly Is a HELOC?

A HELOC is a flexible line of credit, secured by the equity you’ve built up in your home as you have paid down your home loan. (Your equity is the difference between your home’s current market value and your remaining mortgage balance). Most lenders require a minimum of 15% equity to qualify, though the more equity the better when it comes to getting a nice interest rate. You can borrow up to 90% of your equity. HELOCs have variable interest rates, meaning the amount you pay each month could vary throughout the process. A HELOC has two phases:

The Origin of HELOC Interest Rates, Explained

Lenders base HELOC rates on the prime rate, which is influenced by the Federal Reserve. Each lender adds a margin to the prime rate, which is why rates vary — and thus why it is so important to seek out rate quotes from a variety of lenders before signing on to a HELOC. Lenders also consider your credit score, debt-to-income (DTI) ratio, and the amount of equity in your home when determining the interest rate to offer you in Wilmington. Knowing what factors are important to lenders can help you sharpen your financial profile before applying.

How Interest Rates Impact HELOC Affordability

The interest rates on a HELOC can make a big difference in how much you pay each month. Even a small difference — a single percentage point — can have an impact on your monthly payments and the total amount you’ll pay in interest over the life of the loan. For example, on a $50,000 HELOC with a 20-year term, an increase from 7.00% to 8.00% during the repayment phase can raise your monthly payment by $30. Over 20 years, this would increase the total interest paid by almost $7,000. Of course, the HELOC rate is variable, so your exact numbers may differ. But the more you borrow with a HELOC, the greater the effect of a change in interest rate.

HELOC Interest Rate Trends

When you’re in the market for a HELOC you might begin to pay more attention to the prime rate. It’s true that keeping an eye on the prime rate might shed some light on what to expect with HELOC rates in Wilmington. But it’s also helpful to have a sense of the history of the prime rate, so that you can see where current rates are falling by comparison. The prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023.

Variable vs. Fixed Interest Rates

HELOCs usually come with variable (also called adjustable) interest rates. That means rates can change over time, making it a bit trickier to predict what you’ll owe each month. There are built-in controls written into each borrower’s HELOC agreement, specifying how much the rate can change and placing a cap on it overall. So when you’re thinking about a HELOC, think about whether you can handle fluctuation in your payments.

Recommended: Different Types of Home Equity Loans

Helpful Tools and Calculators

Before you apply for a HELOC, online tools can help you estimate your monthly payment and interest costs. Keep these handy as you’re making your decision.

How to Qualify for a Competitive HELOC Rate

If you want a competitive HELOC rate, you’ll want to make the most of your financial profile before filing your application. Here’s what to do:

Improve Your Credit Score

A credit score of 700 or higher is your ticket to better HELOC rates. Yes, you can get a HELOC with a lower score — at minimum, 640. But if you can nudge your number up by paying every bill on time and keeping credit card balances in check, why not do it? Set up automatic bill-pay to dodge late payments, and watch your credit report. You might spot an error that could set you back.

Calculate Your Debt-to-Income (DTI) Ratio

Your DTI ratio is a simple calculation: Divide your total monthly debt payments by your gross monthly income. HELOC lenders generally prefer to see a DTI under 50%, but the lower, the better. And for the best HELOC rate in Wilmington, you’ll want to be at 36% or below. You can improve your DTI by lowering your debts, increasing your income, or both.

Application Process for a HELOC in Wilmington

The HELOC process begins with prequalification, which you can easily do online. This will give you a good idea of the rates and the amount you might qualify for with various lenders. Once you’ve prequalified, you’ll need to gather some documents before filing an application. Here is the full process:

Recommended: What Is a Home Equity Loan?

Closing Costs and Fees

The good news is, the closing costs for a HELOC are generally less than what you’d face with a traditional home purchase or a cash-out refinance. The appraisal fee is often the most significant expense. You might also encounter a title search fee (ranging from $100 to $450), an application fee, an origination fee, and various administrative costs. Some lenders may even offer to reduce or waive certain fees, but be sure to consider the trade-off, as this might come with a higher interest rate.

Tax Benefits and Considerations

Homeowners can take advantage of a tax deduction on the interest paid on a HELOC if the funds are used to buy, build, or renovate the primary residence. This tax benefit is set to last through 2025 and may continue in some form in future years. Before making any decisions, it’s important to consult with a tax advisor to confirm individual eligibility for deductions related to HELOCs.

Alternatives to HELOCs

There are other ways to tap into your home equity. You could take out a home equity loan, refinance your mortgage for more than you owe and take the difference in cash (a cash-out refinance), or get a personal loan. Each option has its own pros and cons so let’s consider them:

The Takeaway

As you consider the potential of a HELOC, it’s important to understand both the advantages and the cautions. HELOCs present a flexible way to tap into funds, possibly at lower interest rates than other loan types. But you need to have a plan in place to make payments or else you risk your home. Investigate HELOC rates in Wilmington with multiple lenders to secure the most favorable terms. Always weigh offers from various lenders and think about alternatives like cash-out refinancing and personal loans before committing.

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.

View your rate