What makes a home equity loan an attractive financing option?
Interest rates for home equity lines and loans are typically lower than for other forms of credit because your home is used as collateral – meaning the risk to a bank is less than with an unsecured loan. A lower rate means a lower cost to you — and the interest you pay may be tax deductible as well. Consult your tax advisor regarding tax deductibility.
What can I pay for with a home equity line of credit or a home equity loan?
Because of the competitive interest rates and potential tax advantages of home equity lines and loans, they're convenient ways to finance almost anything, including home improvements/repairs, education, purchasing a vehicle, buying a second property or consolidating higher-interest-rate balances.
How much can I borrow?
You can borrow as little as $15,000 or up to $750,000 (up to $1 million for properties in California), depending on your credit history, available equity in the property and your current monthly debt.
Is the interest tax deductible?
Interest on home equity lines and loans may be tax deductible. Consult your tax advisor regarding tax deductibility.
Is the interest rate fixed or variable?
Our Home Equity Installment Loan has a fixed rate. Our Home Equity Line of Credit has a variable rate which changes when the Prime Rate changes (as published in the Money Rates section of the Wall Street Journal). In addition, the Home Equity Line of Credit includes the option to convert all or a portion of your balance to the Fixed Rate Option. (For more on this, see "What is the Fixed Rate Option?")
Are discounts available if I make my payments automatically?
Yes. Customers who have their monthly payments deducted automatically from a U.S. Bank personal Silver, Gold or Platinum checking account receive a 0.50% interest rate discount. This discount is already reflected in the rates displayed in our rate tool.
Are there closing costs?
No. There are no closing costs on home equity lines or loans, though loan accounts may have an origination fee if elected by the borrower.
Can I transfer balances from other accounts to my home equity line of credit or loan?
Yes. When opening a home equity account, your personal banker can transfer any higher-rate balances to your new home equity line of credit or loan. After opening the account, you can transfer balances to a home equity line of credit via convenience checks, U.S. Bank Online and Mobile Banking, telephone transfers into a U.S. Bank checking account, or at any U.S. Bank branch.
How long does it take to get a home equity line of credit or home equity loan?
The length of time to process the application varies depending on your situation. Once you’ve signed the documents at closing, the funds will be available after a waiting period of three business days on accounts secured by a primary residence.
Home Equity Line of Credit Questions
What is a home equity line of credit?
A Home Equity Line of Credit is a revolving line of credit secured by your home and is the most flexible type of home financing available. The credit limit is based on the amount of available equity. When payments are applied to the outstanding balance of your credit line, your available credit is replenished.
What is the Fixed Rate Option?
With the Fixed Rate Option, you can lock in a fixed rate on all or any portion of your variable balance at any time.
Our Home Equity Line of Credit has a variable rate which changes when the Prime Rate changes (as published in the Money Rates section of the Wall Street Journal).
The Fixed Rate Option allows you to convert all or any portion of your line of credit balance into installment loans with a fixed rate and fixed payments. As you make payments to your installment loan(s), the available credit in your line is replenished.
You can choose between interest plus principal payments on all terms (up to 20 years), or interest-only payments on a 5-year term.
You can have up to three Fixed Rate Options in place at any time. The first Fixed Rate Option is free; after that, each one costs $50 to set up.
What determines the variable interest rate of a home equity line of credit?
The interest rate is based on the Wall Street Journal Prime Rate as published in the Money Rates section. You can lock in all or any part of your outstanding balance into a fixed interest rate at any time with our Fixed Rate Option.
Can I change the interest rate on my home equity line of credit from a variable to a fixed rate?
Yes, you can lock any or all of your outstanding balance into a Fixed Rate Option on a line of credit. (For more on this, see “What is the Fixed Rate Option?”)
What are the terms of a home equity line of credit?
You can borrow up to $750,000 (up to $1 million for properties in California) for a period of 30 years (10-year draw period and 20-year repayment period). As with any U.S. Bank line of credit, interest rate options include variable (based on the Prime Rate) and fixed (with the Fixed Rate Option). Your minimum monthly payment during the first 10 years is your choice of either 1% or 2% of the outstanding balance, or interest only*. Once the 10-year draw period has expired, your entire outstanding line balance will be converted into a principal plus interest loan for the 20-year repayment period. Repayment options depend on the loan-to-value ratio.
Home Equity Loan Questions
What is a home equity installment loan?
A home equity loan is one-time installment loan secured by your home. Both the interest rate and monthly payments are fixed, ensuring you of a predictable repayment schedule for the life of the loan.
What are the terms of a home equity installment loan?
You can borrow up to $750,000 (up to $1 million for properties in California) depending on the amount of equity in your home. Terms are flexible up to 360 months (30 years). The interest rate is fixed for the term of your loan, and repayments are made in monthly installments of principal and interest.
Home Equity Installment Loan - As of May 6, 2017, the fixed Annual Percentage Rate (APR) of 4.99% is available for 10-year second position home equity installment loans $50,000 to $250,000 with loan-to-value (LTV) of 70% or less. Higher rates apply for higher LTV, certain property types, lower credit scores or other loan amount. In order to receive the lowest rate advertised, a set-up of automatic payments from a U.S. Bank Consumer Checking Package account is required. Automatic payments are not required for loan approval. The Consumer Pricing Information brochure lists fees, terms, and conditions that apply to U.S. Bank Consumer Checking Package accounts and can be obtained by visiting a branch or calling 800.872.2657. Loan payment example: on a $50,000 loan for 120 months at 4.99% interest rate, monthly payments would be $530.08. Payment example does not include amounts for taxes and insurance premiums. The monthly payment obligation will be greater if taxes and insurance are included and an initial customer deposit may be required if an escrow account for these Items is established. APR is 4.99%. 1. No closing cost option: a) is available for customers with a debt to income ratio of 43% or less; b) customer pays no closing costs, except escrow related funding costs; c) an early closure fee of 1% of the original loan amount, maximum $500, will apply if the loan is paid off and closed within the first three years; d) customers can choose to remove the early closure fee by paying an origination fee of 1% of the loan amount, maximum $500. Customers with a debt to income ratio above 43% do not have an early closure fee. Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Property insurance is required. U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.
Home Equity Line of Credit - The APR is variable and is based upon an index plus a margin. The APR will vary with Prime Rate (the index) as published in the Wall Street Journal. As of July 1, 2017, the variable rate for Home Equity Lines of Credit ranged from 3.76% APR to 7.29% APR. Higher rates may apply due to an increase in the Prime Rate, for a credit limit below $100,000, an LTV above 70%, and/or a credit score less than 730. A U.S. Bank Consumer Silver, Gold, or Platinum Checking Package account is required to receive the lowest rate, but is not required for loan approval. The rate will not vary above 18% APR, or applicable state law, or below 3.25% APR, depending on market. Choosing an interest-only repayment may cause your monthly payment to increase, possibly substantially, once your credit line transitions into the repayment period. Repayment options may vary based on credit qualifications. Interest only repayment may be unavailable. Loans are subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Credit Line may be reduced or additional extensions of credit limited if certain circumstances occur. Property insurance is required. U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation. Other restrictions may apply. Customer pays no closing costs, except escrow-related funding costs. An annual fee of up to $90 may apply after the first year and is waived with a U.S. Bank Consumer Platinum Checking Package account. The Consumer Pricing Information brochure lists fees, terms, and conditions that apply to U.S. Bank Consumer Checking Package accounts and can be obtained by visiting a branch or calling 800.872.2657.
U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.
Mortgage and home equity products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.
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