HELOC rates in Minnesota rose from 4.3% in 2020 to 8.6% in 2024. Continued increases could mean higher borrowing costs. Consider locking in a rate now to potentially save on future expenses.
HELOC
Best HELOC Rates in Minnesota (January 2025)
Updated: January 25, 2025
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Key Takeaways
Higher loan-to-value (LTV) ratios lead to higher rates. The average APR for a HELOC in Minnesota with an 80% LTV is 8.1%, compared with 8.5% for a 90% LTV.
HELOC rates vary by city in Minnesota. Plummer has an average APR of 6.3%, whereas Madison Lake's is 10.0%.
Different lenders offer varying rates. Superior Choice Credit Union's average APR is 5.5%, whereas Security State Bank of Marine's is 10.5%.
Current HELOC Rates in Minnesota
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HELOC Rates in Minnesota by LTV Ratio
HELOC rates in Minnesota can vary depending on your loan-to-value (LTV) ratio and line limit. Lenders view a lower LTV as less risky, as it shows more equity in your home. For instance, an 80% LTV means you've borrowed less against your home's value compared to a 90% LTV, reducing the risk of default on your HELOC.
The following table lets you filter between different loan amounts, providing a clearer view of your potential qualifications:
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Line Limit:$100,000
| 8.2% | 8.7% |
HELOC Rates in Minnesota by City
HELOC rates in Minnesota vary between cities due to differences in local housing markets and lender competition. For instance, cities with strong real estate markets might have lower rates.
Use the table below to filter by your city and see average APRs for $50K and $100K HELOCs.
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City:Minneapolis
| $100,000 | 8.4% |
| $50,000 | 8.4% |
HELOC Rates in Minnesota by Lender
HELOC interest rates in Minnesota vary due to different lender pricing strategies and risk assessments. The table below shows the five lenders in Minnesota offering the lowest average APRs, allowing you to compare competitive rates.
| Superior Choice Credit Union | 5.5% |
| Ultima Bank Minnesota | 6.3% |
| Northern Communities Credit Union | 6.3% |
| North Shore Federal Credit Union | 6.5% |
| Great Southern Bank | 7.3% |
HELOC rates today can vary significantly between lenders in the same city. Use the table below to filter by city and compare average APRs, helping you find the most competitive rate available in your area.
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City:Ada
| BMO BANK NATIONAL ASSOCIATION | Commercial Bank | 8.4% |
| Mid Minnesota Federal Credit Union | Credit Union | 8.8% |
COMPARING HELOC RATES IN MINNESOTA: BANKS VS. CREDIT UNIONS
HELOC rates in Minnesota vary between banks and credit unions. Commercial banks typically have higher rates, with the best HELOC rate in Minnesota averaging 8.3%. In contrast, credit unions offer lower rates at an average of 8.1%, benefiting from their not-for-profit status.
When choosing between the two, consider more than just rates. Banks may provide more convenience, while credit unions often offer better customer service and lower fees. Be sure to check membership requirements for credit unions and any hidden fees or rate adjustment clauses with both lenders.
Expert Answers About HELOCs
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 Minnesota 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.
Minnesota 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 Minnesota
Finding the best HELOC rates in Minnesota can save you thousands over the life of your loan. For instance, a lower rate reduces monthly payments, leaving more for other expenses. To secure the most competitive rate, consider these five strategies:
Maintain a strong credit score
Minnesota's average credit score is 742, which is good. Improving it further can help secure more competitive HELOC rates.
Compare offers from multiple lenders
Shopping around can uncover competitive rates and provide leverage to negotiate better terms.
Reduce your debt-to-income (DTI) ratio
Lower debt-to-income (DTI) ratios indicate stability. Paying off credit card debt can help reduce your DTI ratio.
Increase your home equity
More equity reduces lender risk, leading to lower rates. Consider paying down your mortgage or making home improvements.
Review closing costs and rate caps
Some lenders charge closing costs. Understanding rate caps helps manage HELOC expenses as rates adjust.
HELOC Loan Rates vs. Home Equity Loan Rates in Minnesota
HELOC interest rates in Minnesota average 8.2%, higher than the 7.5% for home equity loans. This difference arises from HELOCs' variable rate structure compared to the fixed rates of home equity loans.
- HELOCs are revolving credit lines with variable interest rates, which can increase in rising interest rate environments, potentially impacting long-term finances.
- Home equity loans provide a lump sum with a fixed rate, ideal for situations where financial predictability is needed over flexibility.
When deciding between these options, consider your financial goals and risk tolerance. If you value flexibility and can manage potential rate increases, a HELOC might be suitable. For stable, predictable payments, a home equity loan might be the better choice. Both options allow you to borrow against your home's equity.
CONSIDERING A HELOC ALTERNATIVE? TRY A CASH-OUT REFINANCE
A cash-out refinance is a HELOC alternative that replaces your existing primary mortgage with a new, larger loan, allowing you to access cash. Unlike HELOCs or home equity loans, cash-out refinances create a new primary mortgage.
For instance, if you have a loan backed by the Federal Housing Administration (FHA) and your home is valued at $300,000 with a $150,000 mortgage balance, an FHA cash-out refinance for $200,000 could give you $50,000 in cash, but your new loan payments will be based on $200,000.
FAQ: Best HELOC Rates in Minnesota
What are the current HELOC rates in Minnesota and how do they compare to national rates?
The average HELOC rate in Minnesota is 8.2%, which matches the national average of 8.2%.
What fees are commonly associated with HELOCs in Minnesota?
Common fees include application fees, appraisal fees, annual fees, and early closure fees, but specifics vary by lender.
How do HELOC rates in Minnesota compare to home equity loan rates?
HELOC rates in Minnesota average 8.2%, while home equity loan rates are lower at around 7.5%, which may be beneficial for those with bad credit.
How do HELOC Rates in Minnesota vary between banks and credit unions?
Commercial banks in Minnesota offer HELOC rates averaging 8.3%, while credit unions offer lower rates at 8.1%.
What's the best HELOC rate in Minneapolis? How does it compare to the current HELOC rate in Minnesota?
The average HELOC rate in Minnesota is 8.2%, and Minneapolis's rates are the same, averaging 8.2%.
MoneyGeek examined 138 different banks and credit unions in Minnesota 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 January 10, 2025.
138Lenders 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.