[HELOC Rates](/blog/best-heloc-lenders-2026) in Michigan: Your 2026 Guide to Home Equity Lines of Credit

Michigan homeowners have seen remarkable equity gains in recent years. After a long recovery from the housing crisis that hit the state harder than most, property values have surged — and with them, HELOC borrowing opportunities. Here's what you need to know about tapping your home equity in the Great Lakes State.

Michigan Housing Market Overview

Michigan's housing market has been one of the country's strongest recovery stories. The median [home value](/blog/appraisal-process-explained) statewide sits around $250,000 as of early 2026, up significantly from the $150,000 range just five years ago. Metro Detroit, once the poster child for the foreclosure crisis, has seen values nearly double in many neighborhoods since 2019.

The market varies considerably by region:

• Metro Detroit (Wayne, Oakland, Macomb counties): Median around $240,000–$320,000 depending on the suburb. Oakland County commands the highest prices.
• Grand Rapids area: One of the hottest markets in the Midwest, with median values approaching $310,000.
• Ann Arbor: University-driven market with a median around $420,000.
• Traverse City/Northern Michigan: Resort-area pricing pushes medians to $350,000+.
• Flint, Saginaw, Upper Peninsula: More affordable markets, often $120,000–$180,000.

For HELOC purposes, the strong appreciation across most of the state means many homeowners who bought before 2022 have accumulated 30–50% equity or more. That's prime HELOC territory.

Current HELOC Rates in Michigan

Michigan HELOC rates in early 2026 typically fall in the 7.00%–9.25% APR range, with the best rates reserved for borrowers with excellent credit and low CLTV ratios.

Here's the rate landscape:

• Best available rates: 6.49%–7.00% APR (introductory offers from credit unions, typically for 6–12 months)
• Good credit (720+): 7.25%–8.00% APR
• Average credit (680–719): 8.00%–8.75% APR
• Fair credit (640–679): 8.75%–9.50% APR

Michigan's credit unions are particularly competitive. The state has over 200 credit unions, many of which aggressively price HELOCs to attract deposits and build member relationships.

Rate discounts are common for:

• Automatic payments from a checking account at the same institution (0.25% off)
• Higher credit scores and lower CLTV ratios
• Larger credit lines ($100,000+)
• Existing relationship customers

Lender Landscape: Who Offers HELOCs in Michigan

Michigan's lending market is dominated by credit unions and regional banks, with national players also competing actively.

Best Local and Regional Lenders

Lake Michigan Credit Union (LMCU) One of the largest credit unions in the state, LMCU is known for aggressive HELOC pricing. They frequently offer introductory rates below 6.50% and have minimal closing costs. Available to anyone who lives, works, worships, or attends school in Michigan's Lower Peninsula.

Consumers Credit Union Based in Kalamazoo, Consumers offers HELOCs with no closing costs, no annual fees, and competitive variable rates. Their online application process is smooth, and they serve members across much of western and southern Michigan.

Flagstar Bank Headquartered in Troy, Flagstar is one of the largest banks based in Michigan. Their HELOC product includes a fixed-rate lock option and competitive pricing. They have branches throughout metro Detroit and beyond.

United Wholesale Mortgage (through brokers) While UWM is Michigan's largest mortgage company, their HELOC products are accessed through mortgage brokers. This can work in your favor since brokers can shop multiple wholesale lenders for the best rate.

Chemical Bank (now part of Old National) Old National Bank, after merging with Chemical Bank, maintains a strong Michigan presence. They offer HELOCs with flexible terms and the option to convert variable-rate balances to fixed.

Best National Lenders Active in Michigan

Chase Significant branch presence in Michigan. Chase offers HELOCs with relationship pricing discounts for existing banking customers. Their digital tools for managing your line are among the best.

Bank of America Preferred Rewards members can get rate discounts up to 0.375%. Their [[HELOC application](/blog/heloc-application-process-step-by-step) process](/blog/heloc-application-mistakes) is fully digital.

Figure Online-only lender offering fast approval and funding. Their fixed-rate HELOC alternative is appealing to borrowers who want payment certainty.

Spring EQ A specialty home equity lender that can often accommodate higher CLTV ratios (up to 95% in some cases) and non-traditional income documentation.

HELOC Requirements in Michigan

Standard requirements across Michigan lenders:

Michigan lenders tend to be slightly more flexible than coastal-state lenders on CLTV limits, partly because lower home values mean smaller dollar amounts at risk. A 90% CLTV on a $250,000 Michigan home is $225,000 — manageable risk for most lenders.

Manufactured homes: Michigan has a significant number of manufactured homes. Some credit unions will offer HELOCs on manufactured homes that are permanently affixed to owned land and titled as real property. This isn't universal — ask specifically if this applies to you.

Michigan-Specific Regulations

No attorney requirement: Michigan is a title-company state, not an attorney state. This generally means faster and slightly cheaper closings compared to attorney-required states.

Recording fees: Michigan charges a county recording fee when the HELOC mortgage is recorded — typically $30 for the first page and $8 for each additional page. This is modest.

Michigan mortgage tax: Here's an important one. Michigan imposes a state mortgage recording tax of $0.75 per $100 of the mortgage amount (basically 0.75%). On a $100,000 HELOC, that's $750. Some counties also add a small county tax. This is a real cost to factor in. However, some lenders absorb this fee or cap their HELOC credit line at a lower amount than the recorded mortgage to save you money on this tax.

[Homestead exemption](/blog/homestead-exemption-guide): Michigan's homestead property tax exemption (exempting the property from up to 18 mills of school operating taxes) only applies to your principal residence. If you're taking a HELOC on a non-homestead property, your property taxes will be higher, affecting your DTI calculation.

Right of rescission: The standard federal three-business-day rescission period applies.

Tax Implications

Federal taxes: Same rules apply nationwide — HELOC interest is deductible only if the funds are used to buy, build, or substantially improve the home securing the loan. The $750,000 combined mortgage debt limit applies.

Michigan state taxes: Michigan has a flat 4.25% state income tax. Michigan generally follows federal treatment of mortgage interest deductions. If you can deduct HELOC interest federally, you can generally deduct it on your Michigan return as well.

Some Michigan cities also levy a local income tax (Detroit charges 2.4% for residents, for example). HELOC interest deductions may also apply to these local returns, depending on the municipality.

Practical tip: Michigan's lower home values mean many homeowners fall well under the $750,000 combined mortgage debt limit, so the cap is rarely a concern here. Focus on documenting that you used the funds for home improvements if you want the deduction.

Property Tax Context

Michigan property taxes are above the national average, with an effective rate of approximately 1.38%. Here's how rates vary across the state:

• Detroit: ~2.78% (one of the highest in the nation)
• Grand Rapids: ~1.54%
• Ann Arbor: ~1.89%
• Sterling Heights: ~1.42%
• Traverse City: ~1.08%
• Kalamazoo: ~1.82%

For a $250,000 home at the statewide average rate, annual property taxes run about $3,450. In Detroit, a $200,000 home could carry property taxes exceeding $5,500.

Proposal A protection: Michigan's Proposal A (1994) caps annual property tax assessment increases at the lesser of 5% or the rate of inflation. This means long-term homeowners often have a taxable value well below market value, keeping their tax bills manageable. However, the taxable value resets to market value ("uncaps") when the property is sold. This is relevant for HELOC borrowers because your lower taxable value means lower property taxes and a better DTI ratio.

Impact on HELOC qualification: Higher property taxes in cities like Detroit can significantly impact your DTI ratio. If property taxes eat up $400–$500/month, that reduces the HELOC payment you can qualify for. Factor this in when estimating your borrowing capacity.

Frequently Asked Questions

[How much equity do I need](/blog/home-equity-milestones) for a HELOC in Michigan?

Most Michigan lenders require at least 15–20% equity remaining after the HELOC. With a $250,000 home and a $180,000 mortgage balance, you'd have $70,000 in equity (28%). At an 80% CLTV limit, you could access a HELOC of up to $20,000. At 90% CLTV, you could access up to $45,000.

Can I avoid the Michigan mortgage recording tax on a HELOC?

Some lenders structure HELOCs to minimize this tax. For example, they might record the mortgage for a lower amount than your full credit line, or absorb the tax as part of a no-closing-cost offer. Ask lenders specifically how they handle the 0.75% mortgage tax — it's a meaningful cost that varies by lender.

Are there special HELOC programs for Michigan homeowners?

Several Michigan-based credit unions offer promotional HELOC rates for members, often tied to financial literacy programs or community reinvestment goals. The Michigan State Housing Development Authority (MSHDA) doesn't directly offer HELOCs, but their homeowner assistance programs can complement a HELOC strategy if you're renovating.

Can I get a HELOC on a home in Michigan's Upper Peninsula?

Yes, though the lender pool is smaller. Some lower-peninsula-based credit unions and banks don't lend in the UP due to appraiser availability and market familiarity. LMCU and national lenders like Chase and Bank of America will lend in the UP, though appraisals may take longer and cost more.

What's the difference between a HELOC and a home equity loan in Michigan?

A HELOC is a revolving line of credit with a variable rate — you draw as needed during a draw period (usually 10 years) and repay during a repayment period (10–20 years). A home equity loan is a lump sum with a fixed rate and fixed payments. Both are secured by your home. Michigan lenders offer both; the right choice depends on whether you need funds all at once or over time.

The Bottom Line

Michigan is a strong market for HELOC borrowers. The combination of rising home values, plentiful credit unions, and relatively affordable housing means many homeowners have solid equity positions and multiple competitive lenders to choose from. The main cost to watch out for is Michigan's 0.75% mortgage recording tax — it's a real expense that can add hundreds of dollars to your HELOC closing.

Start with Michigan's credit unions: LMCU, Consumers, and others consistently beat national bank rates. Get at least three quotes, pay attention to the total cost (rate, closing costs, annual fees, mortgage tax), and don't forget to ask about rate-lock options if you plan to borrow a large amount. Michigan homeowners have plenty of good options — just take the time to compare them.

Related Articles

• [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
• Blended Family Home Planning: Merging Households and Managing Home Equity