The Best States for Home Equity Lines of Credit

NEW YORK (RateWatch) – A home equity line of credit (HELOC) can be a great option for homeowners who need to borrow money but don’t feel like paying the steep interest rates of a credit card or personal loan. Like a credit card, a HELOC is a revolving line of credit, which means there is no need to pay off your debt in installments over a fixed period of time. But while credit cards are unsecured – that is, you don’t put up any property as collateral – a HELOC is borrowed against the equity in your home. That, of course, translates to lower interest rates.

But the rate you get at your local bank can depend a lot on where you live. Using data gathered by RateWatch, we’ve assembled a list of the best and worst states to get a home equity line of credit, based on the average rates offered by banks in each state. All rates assume the borrower has excellent credit and is not already an account holder at the institution. For reference, the national average for a home equity line of credit is 5.602%.

The Best

Texas: 3.430% APR
Delaware: 3.99% APR
New Jersey: 3.996% APR
Maine: 4.092% APR
Vermont: 4.134%

The Worst

Utah: 7.574% APR
Arizona: 6.539% APR
New Mexico: 6.499% APR
California: 6.142% APR
Florida: 6.006% APR

If there’s this much variance between the states, then you can imagine how much rates must vary between banks, which is why it’s so important to shop around using the BankingMyWay search tool. And be sure to check the fine print – as we reported last month, many of these deals allow the lender to lower your credit line at any time (especially if the value of your home drops).

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