HELOC rates in Alabama rose from 4% in 2020 to 8.8% by November 2024. This upward trend suggests homeowners may face higher borrowing costs if rates continue to climb, so consider locking in a rate soon.
HELOC
Best HELOC Rates in Alabama (December 2024)
Updated: December 21, 2024
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Key Takeaways
Higher loan-to-value (LTV) ratios lead to higher rates. The average APR for a HELOC in Alabama with an 80% LTV is 8.3%, compared with 8.5% for a 90% LTV.
HELOC rates vary by city in Alabama. Hamilton and Winfield have an average APR of 4.0%, whereas Lineville's is 10.1%.
Different lenders offer varying rates for the same loan types. Listerhill Credit Union's average APR is 4.0%, whereas Pinnacle Bank's is 11.4%.
Current HELOC Rates in Alabama
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HELOC Rates in Alabama by LTV Ratio
HELOC rates in Alabama vary based on your loan-to-value ratio and line limit. A lower LTV is less risky for lenders because it indicates more home equity. For instance, an 80% LTV means borrowing less against your home compared to a 90% LTV, reducing the likelihood of default on your HELOC.
The following table lets you filter between different loan amounts, offering a clearer view of what you may qualify for:
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Line Limit:$100,000
| 8.3% | 8.5% |
HELOC Rates in Alabama by City
HELOC rates in Alabama vary between cities due to local housing markets and lender competition. For instance, cities with stable real estate markets may offer lower rates, reducing lender risk.
Use the table below to filter by city and see average APRs for $50k and $100k HELOCs.
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City:Abbeville
| $100,000 | 7.7% |
| $50,000 | 7.7% |
HELOC Rates in Alabama by Lender
HELOC interest rates in Alabama vary among lenders due to differing pricing strategies and risk assessments. The table below highlights the five lenders in Alabama offering the lowest average APRs, helping you compare competitive rates.
| Listerhill Credit Union | 4.0% |
| All In Federal Credit Union | 7.5% |
| Riverfall Credit Union | 7.5% |
| Family Security Credit Union | 7.5% |
| TVA Community Credit Union | 7.5% |
HELOC rates today can differ among lenders in the same city. Use the table below to filter lenders by city to compare average APRs and find the best rate in your area.
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City:Abbeville
| All In Federal Credit Union | Credit Union | 7.5% |
| PeoplesSouth Bank | Commercial Bank | 8.0% |
COMPARING HELOC RATES IN ALABAMA: BANKS VS. CREDIT UNIONS
HELOC rates in Alabama vary between banks and credit unions, with banks typically offering higher rates. For instance, the best HELOC rate among commercial banks is currently at an average APR of 8.5%, while credit unions offer a slightly lower average APR of 8.2%. Credit unions are not-for-profit institutions that often provide more competitive rates than banks.
When deciding between banks and credit unions, consider more than just rates. Banks might offer more convenience, while credit unions may provide better customer service and lower fees. It's also important to check membership requirements for credit unions and be aware of any hidden fees or rate adjustment clauses with both lenders.
Expert Answers About HELOCs
What are the common fees or costs associated with HELOCs that borrowers should be aware of, and how do these affect the overall cost of borrowing?
Credit & Mortgage Expert
Most banks and credit unions charge little to no fees when getting a HELOC. Typically, you will pay the cost of the appraisal — anywhere from $150 to $450 depending on the type of appraisal done. But closing costs are usually covered by the bank or credit union. This is why it’s best to shop around with at least three different lenders when applying for a HELOC to compare not only the rates but also any costs involved. Getting a rate that is 0.25% lower but having to pay a couple thousand dollars in costs may not make financial sense.
HELOC Payment Calculator
HELOCs have become a popular tool for homeowners across the U.S. looking to tap into their home's equity. Use our Alabama HELOC payment calculator to determine your monthly payments based on the amount drawn, APR and loan terms. Our calculator also provides a full amortization schedule, showing how much goes toward interest and principal over time. Understanding these details can help you manage your HELOC and plan for future payments.
Alabama HELOC Payoff Calculator
This HELOC payment calculator assumes that you take out one lump sum at the start of your interest-only period. Your actual payoff schedule will vary depending on your interest rate and market conditions.
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Repayment Period Payment
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- Graph view
- Table view
- Amortization
Credit Payoff Schedule for Home Equity Line
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How to Get the Best HELOC Rates in Alabama
Finding the best HELOC rates in Florida can help you save thousands over the life of your loan. To secure the most competitive rate, consider these five strategies:
Maintain a strong credit score
The average credit score in Alabama is 692. Improving it can help homeowners secure more competitive HELOC rates.
Compare offers from multiple lenders
Settling for the first offer you receive may be costly. By shopping around, you can find competitive rates and even use offers to negotiate better terms.
Reduce your debt-to-income (DTI) ratio
Lenders favor borrowers with debt-to-income (DTI) ratios because it shows financial stability. Reducing your debt can make you a more attractive candidate for a lower rate.
Increase your home equity
The more equity you have, the less risk the lender assumes, which can lead to a lower rate. Paying down your mortgage or making home improvements can increase your equity.
Review closing costs and rate caps
Some lenders charge closing costs between 2% and 5%, whereas others don't. Compare rate caps to limit your costs as rates adjust over time.
HELOC Loan Rates vs. Home Equity Loan Rates in Alabama
HELOC interest rates in Alabama average 8.3%, slightly higher than home equity loan rates at 8.2%. This difference arises from the rate structures, with HELOCs featuring variable rates and home equity loans offering fixed rates.
- HELOCs are flexible, revolving credit lines with variable interest rates that can increase in rising interest rate environments, potentially affecting homeowners' finances over time.
- In contrast, home equity loans provide a lump sum at a fixed rate, making them ideal for situations where financial predictability is preferred over flexibility.
When deciding between these options, consider whether you prioritize the flexibility of a HELOC or the stability of a home equity loan. Assess your financial goals and the potential impact on your home's equity to make an informed choice.
CONSIDERING A HELOC ALTERNATIVE? TRY A CASH-OUT REFINANCE
A cash-out refinance is a HELOC alternative that replaces your existing mortgage with a new, larger loan, allowing you to access cash. Unlike HELOCs or home equity loans, it creates a new primary mortgage.
For instance, if you have a loan backed by the Federal Housing Administration (FHA) and your home is valued at $300K with a $150K mortgage balance, an FHA cash-out refinance for $200K could give you $50K in cash, but your new loan payments will be based on $200K.
FAQ: Best HELOC Rates in Alabama
What are the current HELOC rates in Alabama and how do they compare to national rates?
Alabama's HELOC rates average 8.3%, which is the same as the national average.
What fees are commonly associated with HELOCs in Alabama?
Common fees include application fees, appraisal fees, annual fees, and early closure fees, but specifics vary by lender.
How do HELOC rates in Alabama compare to home equity loan rates?
HELOC rates in Alabama average 8.3%, while home equity loan rates are slightly lower at 8.2%, which can be beneficial for those with bad credit.
How do HELOC Rates in Alabama vary between banks and credit unions?
Commercial banks in Alabama offer HELOC rates averaging 8.5%, while credit unions offer lower rates at 8.2%.
What's the best HELOC rate in Huntsville? How does it compare to the current HELOC rate in Alabama?
Huntsville's rates average 8.9%, which is higher than the Alabama average of 8.3%.
MoneyGeek examined 133 different banks and credit unions in Alabama using S&P Global's SNL Depository Rates dataset to stay current on the latest home equity line of credit rates.
This data is accurate as of December 13, 2024.
133Lenders Analyzed
About Zachary Romeo, CBCA
Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.
Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.