HELOC rates in Iowa rose from 4.4% in mid-2021 to 8.4% by November 2024. Continued increases could mean higher borrowing costs for homeowners. Consider securing a rate now to mitigate potential future expenses.
HELOC
Best HELOC Rates in Iowa (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 Iowa with an 80% LTV is 8.1%, compared with 8.4% for a 90% LTV.
HELOC rates vary by city in Iowa. Milton has an average APR of 6.9%, whereas Emerson's is 9.8%.
Different lenders offer varying rates for the same loan types. First Class Community Credit Union's average APR is 5.4%, whereas Marine Credit Union's is 10.3%.
Current HELOC Rates in Iowa
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HELOC Rates in Iowa by LTV Ratio
HELOC rates in Iowa can fluctuate based on your loan-to-value (LTV) ratio and line limit. A lower LTV means more equity in your home, reducing lender risk and potentially lowering your rate. For instance, an 80% LTV is less risky than a 90% LTV, making it less likely you'll default on your HELOC.
The table below allows you to filter different loan amounts, providing a clearer picture of your potential options.
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Line Limit:$100,000
| 8.1% | 8.4% |
HELOC Rates in Iowa by City
HELOC rates in Iowa vary by city due to differences in local housing markets and lender competition. For instance, cities with strong 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:Des Moines
| $100,000 | 8.1% |
| $50,000 | 8.2% |
HELOC Rates in Iowa by Lender
HELOC interest rates in Iowa vary by lender due to different pricing strategies and risk assessments. Understanding these differences can help you find a competitive rate.
The table below shows the five lenders in Iowa offering the lowest average APRs, making it easier for you to compare options.
| First Class Community Credit Union | 5.5% |
| Journey Credit Union | 6.0% |
| Empeople Credit Union | 6.6% |
| Aim Credit Union | 6.7% |
| Success Bank | 6.9% |
HELOC rates today can vary widely among lenders in the same city. Use the table below to filter by city and compare average APRs, helping you find the most competitive rate in your area.
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City:Des Moines
| Journey Credit Union | Credit Union | 6.0% |
| Collins Community Credit Union | Credit Union | 7.5% |
| Financial Plus Credit Union | Credit Union | 7.8% |
| Affinity Credit Union | Credit Union | 7.8% |
| Greater Iowa Credit Union | Credit Union | 8.0% |
| Earlham Savings Bank | Commercial Bank | 8.3% |
| BMO BANK NATIONAL ASSOCIATION | Commercial Bank | 8.4% |
| Community State Bank | Commercial Bank | 8.5% |
| First Interstate Bank | Commercial Bank | 8.5% |
| Two Rivers Bank & Trust | Commercial Bank | 8.5% |
| Bank of America | Commercial Bank | 8.8% |
| Community Choice Credit Union | Credit Union | 9.0% |
| U.S. Bank National Association | Commercial Bank | 10.0% |
COMPARING HELOC RATES IN IOWA: BANKS VS. CREDIT UNIONS
HELOC rates in Iowa vary between banks and credit unions due to their different operational structures. Commercial banks often have higher rates, with the best HELOC rate in Iowa for commercial banks averaging 8.4%. In contrast, credit unions offer a lower average APR of 7.8%, as they are not-for-profit institutions.
When choosing between the two, consider more than just rates. Banks might offer more convenience, while credit unions often provide better customer service and lower fees. Also, check membership requirements for credit unions and be aware of any hidden fees or rate adjustment clauses with both lenders.
Ask the experts:
How do lenders assess risk when setting HELOC rates for different property types (e.g., primary residence vs. investment property), and how can borrowers mitigate higher rates for non-primary homes?
Credit & Mortgage Expert
All loans are about risk. The higher the risk, the higher your rate will be. With investment properties or second homes, since they are not your primary residence the risk is inherently higher in the eyes of the lender — for example, if someone falls on hard times, they are more likely to continue making timely payments on the home they live in rather than an investment or second home.
Usually, if you are taking a HELOC on an investment property, you are using those funds to improve the property or using it to buy another investment property. Having access to cash to make more cash is what investors do. They should always take into account the higher rates when making an investment decision. If successful, the higher rate won't be a problem.
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 Iowa HELOC payment calculator to estimate 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 more effectively and plan for future payments.
Iowa 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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How to Get the Best HELOC Rates in Iowa
Finding the best HELOC rates in Iowa can save you thousands over the loan's life. For example, a lower rate can reduce your monthly payments and total interest. Consider these five strategies to secure the most competitive rate:
Maintain a strong credit score
The average credit score in Iowa is 730. While good, aiming for higher can secure better rates from lenders.
Compare offers from multiple lenders
Shopping around helps find competitive rates and leverage offers for better terms.
Reduce your debt-to-income (DTI) ratio
Lower debt-to-income (DTI) ratios show financial stability. Paying off credit card debt can help.
Increase your home equity
More equity reduces lender risk, lowering rates. Paying down your mortgage or home improvements can help.
Review closing costs and rate caps
Closing costs affect loan expenses. Understanding rate caps helps manage HELOC adjustments.
HELOC Loan Rates vs. Home Equity Loan Rates in Iowa
HELOC interest rates in Iowa are generally higher than home equity loan rates, averaging 8.2% compared to 7.7%. This discrepancy is due to HELOCs having variable rates, which can increase over time, especially in rising interest rate environments.
- HELOCs are flexible credit lines with variable rates that adjust with market conditions. In rising interest rate environments, these rates can climb, potentially impacting homeowners' finances over time.
- Home equity loans provide a lump sum with a fixed rate, offering stability throughout the loan term. They are preferable when financial predictability is desired over flexibility.
When deciding between these options, consider your need for flexibility against the desire for rate stability. Assess how changes in interest rates might affect your long-term financial situation and whether you prefer a predictable payment structure or the ability to access funds as needed.
CONSIDERING A HELOC ALTERNATIVE? TRY A CASH-OUT REFINANCE
Cash-out refinance is a HELOC alternative that replaces your existing primary mortgage with a larger loan to access cash. Unlike HELOCs or home equity loans, it creates a new primary mortgage.
If your loan is backed by the Federal Housing Administration (FHA), an FHA cash-out refinance lets you refinance up to 80% of your home's value, offering cash based on the new loan amount.
FAQ: Best HELOC Rates in Iowa
What are the current HELOC rates in Iowa and how do they compare to national rates?
Iowa's HELOC rates average 8.2%, slightly lower than the national average of 8.3%.
What fees are commonly associated with HELOCs in Iowa?
Common fees include application fees, appraisal fees, annual fees, and early closure fees, but specifics vary by lender.
How do HELOC rates in Iowa compare to home equity loan rates?
Iowa's HELOC rates average 8.2%, while home equity loan rates are lower at 7.7%. This difference can be more significant for those with bad credit.
How do HELOC Rates in Iowa vary between banks and credit unions?
Commercial banks in Iowa offer HELOC rates averaging 8.4%, while credit unions offer lower rates at 7.8%.
What's the best HELOC rate in Des Moines? How does it compare to the current HELOC rate in Iowa?
Des Moines's rates average 8.1%, slightly lower than the state average of 8.2%.
MoneyGeek examined 108 different banks and credit unions in Iowa 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.
108Lenders 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.