best-heloc-lenders-2026) & Lenders: Your 2026 Guide to Home Equity Lines of Credit

Indiana is one of the most affordable housing markets in the country, and that affordability translates into a practical HELOC landscape. With a median [home value](/blog/appraisal-process-explained) around $230,000, Hoosier homeowners can tap their equity at a lower cost of entry than most states, and the borrowing process tends to be straightforward.

Whether you're renovating a Craftsman in Indianapolis, updating a home in Fort Wayne, or building an addition in Carmel, this guide covers everything Indiana homeowners need to know about HELOCs in 2026.

Indiana Housing Market Overview

Indiana's housing market is characterized by stability and affordability:

Median home value: ~$230,000 statewide (Indianapolis metro ~$275,000; Carmel/Fishers ~$400,000+; Fort Wayne ~$210,000; Evansville ~$175,000; South Bend ~$185,000; Bloomington ~$270,000)
Year-over-year appreciation: 3–5%, consistent and steady
Homeownership rate: ~70%, above the national average of ~66%
Housing affordability: Indiana consistently ranks in the top 10–15 most affordable states for housing

An Indianapolis-area homeowner with a $275,000 home and a $160,000 mortgage could access roughly $60,000 through a HELOC at 80% CLTV. In higher-value suburbs like Carmel or Zionsville, HELOC lines of $100,000–$200,000 are achievable.

Current HELOC Rates in Indiana

Indiana HELOC rates are competitive, thanks to a strong credit union presence and multiple regional banks vying for business:

Rate Type	Typical Range
Variable APR	7.25% – 9.50%
Introductory/promo APR	5.99% – 7.25% (6–12 months)
Fixed-rate conversion option	7.50% – 10.00%

Indiana borrowers generally see rates at or slightly below national averages. The state's credit unions are particularly aggressive on HELOC pricing.

Rate factors:

Credit score: 740+ for the best rates
CLTV: Under 70% for premium pricing
Indiana credit unions frequently offer 0.25–0.50% below major banks
Some lenders offer autopay discounts of 0.25%

HELOC Qualification Requirements

Indiana follows standard [HELOC underwriting](/blog/heloc-application-mistakes) with no unusual state-specific barriers:

Credit score: 660–680 minimum; 720+ for top rates
CLTV: Up to 80% standard; some Indiana lenders go to 85–90% with strong credit
DTI: 43% preferred; some flexibility to 50%
Income documentation: Standard — pay stubs, W-2s, or two years of tax returns for self-employed
Property type: Single-family, condo, townhome, and 2–4 unit properties all eligible. Manufactured homes on permanent foundations may qualify with select lenders.
Insurance: Standard homeowners insurance. Flood insurance required in designated flood zones (common along the White River, Wabash, and Ohio River corridors).
Appraisal: Required for most HELOCs; some lenders waive for smaller lines using AVMs

Manufactured and Mobile Homes

Indiana has a significant number of manufactured homes. Getting a HELOC on one requires:

The home must be permanently affixed to a foundation
It must be titled as real property (not a vehicle title)
Most lenders cap CLTV at 65–75% for manufactured homes
Credit unions like Indiana Members Credit Union are more flexible than national banks

Best HELOC Lenders in Indiana

Local Lenders

1. Indiana Members Credit Union (IMCU) One of Indiana's largest credit unions. Competitive HELOC rates, low fees, and local expertise. Multiple branches across central Indiana. Membership open to anyone who lives or works in Indiana.

2. Teachers Credit Union Based in South Bend with statewide reach. Consistently offers some of the [lowest HELOC rates](/blog/best-heloc-rates-2026) in Indiana. Despite the name, membership is open to the general public through partner organizations.

3. Centier Bank Indiana's largest privately held bank, headquartered in Valparaiso. Strong HELOC product with competitive rates and no annual fee. Extensive branch network in Northwest Indiana and Indianapolis.

4. Forum Credit Union Indianapolis-based with excellent HELOC rates and a smooth online application process. Known for fast processing times.

5. First Federal Savings & Loan (Evansville) Strong option for Southern Indiana homeowners. Competitive rates and local underwriting knowledge.

6. Lake City Bank Northern Indiana regional bank with a solid HELOC product. Good for Fort Wayne, Warsaw, and surrounding areas.

National Lenders Active in Indiana

7. Chase Large Indiana footprint. Offers HELOCs with relationship discounts and a streamlined digital experience.

8. U.S. Bank Competitive Indiana HELOC product with rate discounts for existing customers.

9. Figure Fast online HELOC — approval in minutes, funding in days. Fixed-rate product. Good for tech-savvy Indiana borrowers who want speed.

10. Third Federal Savings & Loan Based in Cleveland but serves Indiana. Known for consistently low HELOC rates — frequently among the best in the Midwest.

Indiana State Regulations and Consumer Protections

Indiana is a moderately regulated state with borrower-friendly protections:

Right of rescission: Federal three-day cancellation period applies to primary residence HELOCs.
No prepayment penalties: Not allowed on primary residence HELOCs under federal law.
Foreclosure process: Indiana uses judicial foreclosure, requiring court proceedings. The process typically takes 6–12 months, giving borrowers time to respond, negotiate, or seek alternatives.
Indiana Uniform Consumer Credit Code: Provides consumer protections against deceptive lending practices and unconscionable terms.
Redemption rights: Indiana does not have a post-sale statutory right of redemption for mortgage foreclosures, but borrowers can redeem the property any time before the sheriff's sale.
Military protections: Indiana follows SCRA (Servicemembers Civil Relief Act) provisions, capping interest rates at 6% for active-duty service members on pre-service debts.
Indiana Department of Financial Institutions (DFI): Regulates mortgage lenders. Verify licenses at in.gov/dfi.

Spousal Rights

Indiana is not a community property state — it uses equitable distribution. However, Indiana's homestead laws may still require a non-borrowing spouse's signature on HELOC documents to waive homestead rights. Check with your lender.

Tax Implications

Federal Tax Deduction

Standard federal rules: HELOC interest is deductible when used to buy, build, or substantially improve the home. Combined mortgage + HELOC limit of $750,000.

Indiana State Income Tax

Indiana has a flat state income tax of 3.05% (reduced from 3.15% in recent years — one of the lowest flat rates in the country). Counties also levy additional income taxes ranging from 0.5% to 2.9%, so your total state/local rate varies.

Indiana generally conforms to federal mortgage interest deduction rules, so qualifying HELOC interest is deductible on your state return.

Property Tax Context

Indiana's effective property tax rate is approximately 0.83%, below the national average of ~1.1%. On a $275,000 Indianapolis-area home, expect a property tax bill of roughly $2,200–$2,800 per year.

Indiana offers several property tax benefits:

Homestead deduction: Reduces assessed value by up to 60% (max $45,000) for owner-occupied primary residences
Mortgage deduction: Additional deduction for homeowners with a mortgage (up to $3,000 in assessed value)
Property tax cap: Indiana's constitution caps property taxes at 1% of assessed value for homesteads, 2% for other residential, and 3% for commercial — one of the strongest taxpayer protections in the country

These caps and deductions keep Indiana property taxes predictable and manageable, which helps your DTI ratio and HELOC qualification.

How to Apply for a HELOC in Indiana

Estimate your equity: Use recent comparable sales minus your mortgage balance. Indiana's stable appreciation makes online estimates reasonably accurate.
Review your credit: Pull all three credit reports. Pay down revolving balances to improve your score and DTI.
Shop 3–5 lenders: Compare Indiana credit unions (IMCU, Teachers, Forum) against national options. The difference can be significant.
Gather documents: Pay stubs, W-2s or tax returns, mortgage statement, insurance declaration, and property tax statement.
Apply: Most Indiana lenders offer online or in-branch applications. Expect an appraisal or AVM.
Close: Typical timeline is 2–5 weeks. After the three-day rescission period, your credit line is active.

Frequently Asked Questions

[How much equity do I need](/blog/home-equity-milestones) for an Indiana HELOC?

Most lenders require 15–20% equity after the HELOC. On a $275,000 home with a $160,000 mortgage, you need at least $55,000 in equity (20%) just to qualify, and your HELOC line would be up to $60,000 at 80% CLTV.

Can I get a HELOC on a rental property in Indiana?

Yes, but with stricter terms. Expect a maximum CLTV of 70–75%, higher rates (typically 0.50–1.00% more), and stronger credit requirements (720+). Not all lenders offer investment property HELOCs — ask specifically.

How do Indiana's property tax caps help with HELOC qualification?

Indiana's constitutional 1% cap on homestead property taxes keeps your housing expenses predictable and lower than many neighboring states. This directly helps your DTI ratio, potentially allowing you to qualify for a larger HELOC.

What's the difference between a HELOC and a [cash-out refinance](/blog/cash-out-refinance-guide) in Indiana?

A cash-out refinance replaces your entire mortgage with a new, larger one. A HELOC adds a second lien. With current mortgage rates above 6%, a HELOC often makes more sense if you have a low rate on your existing mortgage (e.g., 3–4% from 2020–2021). You keep the low first mortgage rate and only pay the HELOC rate on what you actually draw.

Are there any HELOC assistance programs in Indiana?

Indiana doesn't have specific HELOC assistance programs, but the Indiana Housing and Community Development Authority (IHCDA) offers various homeowner programs that could complement a HELOC strategy. Check in.gov/ihcda for current offerings.

The Bottom Line

Indiana's combination of affordable housing, low property taxes with constitutional caps, and a competitive credit union market makes it an excellent state for HELOC borrowers. You won't be accessing the massive equity lines that [California](/blog/california-heloc-guide) or Hawaii homeowners see, but the economics work in your favor — lower home values mean lower risk, and Indiana's cost of living keeps your DTI ratio manageable.

Start your search with Indiana's credit unions. Teachers Credit Union, IMCU, and Forum consistently outperform national banks on HELOC rates. Compare against Third Federal and Figure for a complete picture. Indiana's judicial foreclosure process gives you a safety net, but borrow responsibly — only tap equity you can comfortably repay.

HonestCasa helps you compare HELOC rates and lenders across all 50 states. Get personalized quotes at honestcasa.com.

[Home [Equity Explained](/blog/home-equity-explained): What It Is and How to Build It](/blog/home-equity-explained)
Property Taxes Explained: How They Work and How to Reduce Them
Complete Guide to Rental Property Tax Deductions for Landlords (2026)

Heloc Rates Indiana

Key Takeaways