Today we are going to discuss how to get the best HELOC rate. A HELOC, or home equity line of credit, is an excellent tool that you can use to pay off debt or fix up your property. Here at Smart With Debt we want to show you how to get the best interest rate for your HELOC in order to keep more money in your wallet. Let’s go through it step by step.

Step 1: Find out the Index

First and foremost, what is the index? The index is your starting point for your HELOC rate. This base number is the same for everyone. For example, you could have an index of 8.5%. Be aware, this will go up and down because it fluctuates with the market. 

Step 2: Find out the Margin

What is the margin? The margin is the profit that is added to the index. For example, you could have a margin of 0% to 6%, because each lender charges a different margin.  As a result, rates vary per person because it depends on where you get your HELOC. 

Calculating your HELOC rate

Here’s another way to think of it. Think of it like a gas station. Each station pays the same price for the fuel (aka the index). However, each station charges a different profit (aka the margin). The index plus the margin equals the HELOC rate! 

Step 3: Shop around

It is imperative that you shop around in order to find the best HELOC rate for your wallet. By doing a side by side comparison, you can easily see which lender has the best HELOC. Get started with a free HELOC shopping card today! 

We want to help you!

Finding the best HELOC rate can seem daunting! Don’t let the numbers get the best of you and your wallet. Contact us today to discuss whether or not a HELOC is right for you. Most importantly, download our free HELOC shopping card to compare lenders side by side!

Watch our most recent explainer to find out more about: HELOC: How to Get the BEST Interest Rate