Fixed Rate Home Equity Loan

Most home equity loans offer a fixed interest rate with fixed terms on a fixed amortization schedule. Homeowners appreciate that home equity loans offer a fixed monthly payment with fixed rates that cannot change. The Federal Reserve has indicated there will be several rate reductions in 2024, so we anticipate fixed home equity loan rates to be more attractive this year.

Opting for a fixed-rate home equity loan ensures peace of mind as it comes with a predetermined term and fixed monthly payments. The mortgage interest rate remains constant, providing stability.

Shop for the Best Fixed Rate Home Equity Loans Online

At Home Equity Mart, our number one goal is to help our customers find the right home equity loan with a payment that meets their budget. If you are seeking a fixed rate home equity loan, we will connect you to a lender who can perform the requested secondary financing. Please be aware that some fixed home equity loans will have lending fees but there are some available to qualified borrowers with no closing costs.

  • Fixed Interest Rate Loans Make Budgeting Easy
  • Fixed Rate Home Equity Terms
  • Simple Interest Loans
  • Clear Debt Consolidation with Fixed Rates
  • Fixed Monthly Payments

How Does a Home Equity Loan with a Fixed Interest Rate Work?

When applying for a home equity loan, you submit an application for the desired amount. These loans typically come with a fixed interest rate that remains constant throughout the loan’s duration. Each monthly payment is consistent in the amount both interest charges and a segment of the loan principal.

A fixed interest rate is applied to a lump sum amount drawn from your equity in the case of a home equity loan. Repayment occurs at this fixed interest rate for the entire loan duration through regular monthly payments, providing predictability and certainty. This type of equity loan is an excellent choice for those in need of funds for a one-time expense.

What would be the monthly payment for a $20,000 home equity loan?

To determine the monthly payments on a 15-year fixed-rate equity loan of $20,000 at an 8.9% interest rate (According to CBS News, the average home equity rate as of October 16, 2023), we can use the formula mentioned earlier. The monthly principal and interest payments for this loan option, calculated through the formula, would amount to $201.55.

Are Fixed Rate HELOCs Available?

Home equity credit lines, also known as a HELOC are offered primarily as variable rate credit lines that require the borrower to pay at least the interest on the portion of the credit line they have used. So, if you have a $100,000 home equity line and you only access $50,000, then you will have an interest only payment on the $50,000.

In most cases, home equity lines operate on a 30-year term basis. Frequently, a fixed-rate HELOC involves a draw period spanning 10 years followed by a 20-year repayment period. During or at the close of the draw period, most lenders permit borrowers to convert their mortgage debt into a fixed rate home equity loan. Some lenders also allow the option to revert to a adjustable rate, providing an opportunity to pay less interest if market rates decline.

While a traditional HELOC functions like a large credit card, a fixed-rate home equity line can be likened to a conventional second mortgage. Essentially, it functions as a blend of a home equity loan (providing a lump sum at a fixed rate) and a HELOC. This hybrid equity loan allows you to lock in a portion or the entirety of your balance at a fixed interest rate, shielding you from market fluctuations affecting rates.

With a fixed home equity line, you have the flexibility to withdraw as much or as little from your credit line as required, similar to a variable-rate HELOC. However, unlike a variable-rate HELOC, the interest rate on any withdrawn amount remains constant throughout the draw period.

Despite the increasing popularity of fixed-rate home equity lines, many brokers remain cautious about offering them. Locating a bank or lender that provides fixed-rate home equity lines of credit may pose more challenges compared to finding those offering variable-rate lines of credit.

Typically, you have the option to convert either the entirety or a portion of your HELOC balance to a fixed rate equity loan with a specified term either at the closing or at any point during the draw period. However, it’s important to note that conversions are not allowed during the repayment period. If you wish to transform a variable-rate balance into a fixed-rate one at that stage, home equity loan refinancing becomes necessary.

When You Shopping for Fixed Rate Home Equity Loans

When faced with the dilemma of choosing between a fixed rate home equity loan and an adjustable rate HELOC, an appealing alternative is an equity line of credit that offers the option to secure a fixed rate for part of your balance. This option eliminates the need to make a rigid decision between borrowing a substantial sum immediately and retaining the flexibility to withdraw funds as needed in the future.

Additionally, it spares you from having to choose between being informed about your interest rate and taking a risk on market rate fluctuations.

Credit score are an important factor to qualify for fixed equity loans. There are bad credit home equity loans available with fixed interest rates but the rates are substantially higher. Don’t rule out getting a HELOC to consolidate and pay off debts.

Whether you need a cash-out refinancing or an equity loan, there are many attractive fixed rates being advertised in today’s marketplace. The Home Equity Mart remains dedicated to making sure that your home financing experience is as painless and stress free as possible. Apply now for a free, no-obligation quote, and let us help you reach your financial goals today!


Equity Loans for poor credit
If you have low credit scores or a bankruptcy in your past this may be an opportunity for you to tap your equity and receive some cash while you reestablish your credit history.

Personal Loans – Consider an unsecured loan if you would rather not use your home’s equity.

Home Equity line of credit
This line of credit provide the flexibility to pay interest solely on the accessed amount. HELOCs start with adjustable rates that may vary.

Stated Income Home Loans for Self-Employed
There is no income verification required! Choose between stated income and bank statement loan programs. If you own your own business this equity loan is for you!