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

The Twin Cities might not get the same national attention as coastal housing markets, but Minneapolis-St. Paul homeowners have quietly built substantial equity over the past several years. With a median [home value](/blog/appraisal-process-explained) that's grown steadily without the wild swings seen in places like Phoenix or Austin, the Minneapolis metro offers a stable foundation for [home equity borrowing](/blog/home-equity-loan-vs-heloc-2026).

If you're looking to tap into your home's equity through a HELOC — whether for a kitchen remodel in Edina, a cabin up north, or consolidating debt — this guide covers the rates, lenders, regulations, and tax considerations specific to Minneapolis-St. Paul.

Current HELOC Rates in Minneapolis (February 2026)

Minneapolis-area HELOC rates currently range from 6.75% to 9.00% APR for qualified borrowers. Minnesota's strong credit union tradition and competitive banking landscape keep rates on the favorable side.

• Credit unions: 6.75% – 7.75% APR for borrowers with 740+ credit scores and LTV under 80%
• Community and regional banks: 7.25% – 8.25% APR
• National banks: 7.75% – 9.00% APR, with some introductory offers as low as 6.25%

Variable rates are tied to the prime rate (8.50%), with your margin determined by creditworthiness. Minnesota credit unions frequently offer margins of prime minus 1.50% to prime minus 1.75%, which are among the most aggressive in the country.

Best HELOC Lenders in Minneapolis

Credit Unions

Affinity Plus Federal Credit Union Affinity Plus is one of Minnesota's largest credit unions and consistently ranks among the best HELOC lenders in the Twin Cities. Membership is open to all Minnesota residents.

• Typical rate: Prime minus 1.25% to prime minus 1.75%
• No annual fee
• No closing costs for lines under $250,000
• Draw period: 10 years, repayment period: 15 years
• Fixed-rate lock option available

TruStone Financial Credit Union Headquartered in Plymouth, TruStone serves the broader Twin Cities area and offers one of the most competitive HELOC products in the market.

• Typical rate: Prime minus 1.00% to prime minus 1.50%
• No closing costs (must keep line open 36 months)
• No annual fee
• 10-year draw, 20-year repayment

Wings Financial Credit Union Based in Apple Valley, Wings Financial has a strong reputation for mortgage and HELOC products. They're particularly popular with homeowners in the southern suburbs.

• Typical rate: Prime minus 0.75% to prime minus 1.25%
• No closing costs, no annual fee
• Rate floor applies (typically around 4.00%)

Firefly Credit Union A smaller credit union serving the Minneapolis metro, Firefly often matches or beats the rates of larger institutions. Worth a look if you value personal service.

Banks

U.S. Bank Headquartered right in Minneapolis, U.S. Bank is the obvious local giant. Their HELOC product is solid, with a fixed-rate conversion option and relationship discounts for existing customers. As a hometown bank, they know the Minneapolis market inside and out.

• Typical rate: Prime + 0.00% to prime + 0.75%
• Relationship discount: 0.25% – 0.50% for deposit/investment account holders
• Fixed-rate lock option
• Closing costs: Generally waived for lines over $25,000

Bremer Bank A regional bank with deep Minnesota roots. Bremer offers personalized service and flexible underwriting, which can be helpful for self-employed borrowers or those with non-traditional income.

Bridgewater Bank A Minneapolis-based bank that focuses on mortgage and home equity products. Bridgewater tends to be competitive on rates and faster than average on closings.

Wells Fargo / Chase Both have major Minneapolis presences. Wells Fargo, which was historically headquartered here (Norwest Bank), still maintains a significant local operation. Their HELOC rates tend to be mid-range but come with the convenience of a large branch and ATM network.

Minneapolis Housing Market and Your Equity

Home Values

The median home value in metro Minneapolis-St. Paul is approximately $365,000 as of early 2026. Compared to coastal metros, that's remarkably affordable — and it means monthly HELOC payments stay manageable even on significant draws.

Area breakdown:

How Much Can You Borrow?

Most Twin Cities lenders allow 80% to 90% CLTV. Here's a practical example:

Your home is worth $400,000 and you owe $240,000 on your mortgage.

At 80% CLTV:

• $400,000 × 80% = $320,000
• $320,000 – $240,000 = $80,000 HELOC

At 90% CLTV:

• $400,000 × 90% = $360,000
• $360,000 – $240,000 = $120,000 HELOC

Market Conditions

The Minneapolis housing market is one of the steadiest in the country. Prices didn't spike as dramatically as Sun Belt cities during the boom, and they haven't corrected as sharply. Inventory remains tight in popular neighborhoods (Southwest Minneapolis, Edina, the western suburbs), while outer-ring suburbs have more availability.

This stability is excellent for HELOC borrowers. Lenders are confident in Twin Cities property values, which translates to easier approvals and better terms. Appraisals tend to be predictable — you're unlikely to be blindsided by a low valuation.

One thing to note: Minneapolis's older housing stock (many homes date to the 1920s–1960s) means some properties have deferred maintenance issues that could affect appraised value. If your home needs a new roof, updated electrical, or foundation work, address what you can before applying.

[Minnesota HELOC](/blog/minnesota-heloc-guide) Regulations

Strong Consumer Protections

Minnesota has some of the strongest consumer protection laws in the country, and they extend to HELOCs.

Minnesota Mortgage Originator and Servicer Licensing Act: All HELOC lenders must be properly licensed in Minnesota, and the state Department of Commerce actively oversees lending practices.

Restrictions on Certain Fees: Minnesota law limits certain fees that lenders can charge on home equity products. For example, late fees are capped, and lenders must provide clear disclosures about all costs before closing.

No State LTV Cap

Minnesota does not impose a state-level limit on home equity borrowing, so your maximum CLTV is set by the lender.

Homestead Classification

Minnesota's property tax system includes a homestead classification that reduces property taxes on your primary residence. When you take out a HELOC, your homestead status isn't affected — you'll continue to receive the homestead benefit. This keeps your overall housing costs (and [debt-to-income ratio](/blog/dti-ratio-explained)) favorable.

Mortgage Registry Tax

Minnesota imposes a mortgage registry tax of 0.23% on the principal amount of new mortgage debt. For a $100,000 HELOC, that's $230. This tax is paid at recording and is typically passed to the borrower as a closing cost. Some lenders absorb this cost on no-closing-cost products; others don't. Ask specifically about this tax when shopping for a HELOC.

Deed Tax

Separate from the mortgage registry tax, Minnesota also has a deed tax, but this applies to property transfers (sales), not to HELOCs. You won't owe deed tax when opening a HELOC.

Right of Rescission

The standard federal three-business-day cancellation right applies to all Minneapolis HELOCs on primary residences.

Tax Implications for Minneapolis Homeowners

Federal Tax Deduction

HELOC interest is deductible federally if the funds are used to buy, build, or substantially improve your home (subject to the $750,000 total mortgage debt cap). Given Minneapolis's moderate home values, most Twin Cities homeowners won't bump up against this cap — a significant advantage over high-cost markets.

Minnesota State Tax Deduction

Minnesota has a progressive [state income tax](/blog/states-with-no-income-tax-investing) with a top rate of 9.85%, one of the highest in the country. Minnesota generally conforms to federal tax treatment of mortgage interest deductions.

This is a big deal. If you're in Minnesota's top tax bracket and can deduct your HELOC interest, the combined federal and state tax benefit is substantial. For a homeowner in the 24% federal bracket and 9.85% state bracket, a deductible HELOC effectively costs about 34% less in after-tax interest. On a $100,000 HELOC at 7.50%, that's roughly $2,500/year in tax savings.

Strategy

The high state income tax rate makes it especially worthwhile to use HELOC funds for tax-deductible purposes (home improvement) rather than non-deductible ones (debt consolidation, personal expenses). The tax math in Minnesota strongly favors home improvement HELOCs.

Popular HELOC Uses in Minneapolis

• Winter-proofing and energy upgrades: Minnesota's brutal winters make insulation, new windows, and efficient heating systems smart investments. Many homeowners use HELOCs to fund energy retrofits that pay for themselves in lower heating bills.

• Cabin or lake home purchase: A quintessential Minnesota move. Some Twin Cities homeowners use a HELOC on their primary residence for the down payment on a lake cabin.

• Kitchen and bathroom remodels: The Twin Cities' older housing stock means many homes have outdated kitchens and bathrooms. A well-done kitchen remodel in Minneapolis typically returns 60%–80% of its cost in increased home value.

• Home office conversions: With many Minneapolis employers maintaining hybrid work policies, dedicated home office spaces continue to be a popular improvement.

Frequently Asked Questions

How long does it take to get a HELOC in Minneapolis?

Most Twin Cities lenders close HELOCs in 2 to 4 weeks. Affinity Plus and TruStone typically take 2–3 weeks. U.S. Bank can sometimes close faster due to their automated underwriting systems. Winter applications may be slightly slower due to appraisal scheduling in bad weather.

What credit score do I need for a HELOC in Minneapolis?

Most Minneapolis lenders require a minimum score of 680. For the best rates (prime minus 1.25% or better), target 740+. Minnesota's credit union market is broad enough that borrowers with scores in the 660–680 range can still find options, though rates will be higher.

Do I need a full appraisal for a HELOC in Minneapolis?

It depends on the loan amount and lender. For HELOCs under $250,000 on properties valued under $500,000, many lenders accept an automated valuation model (AVM) or a drive-by appraisal, saving you $300–$500 and 1–2 weeks of time. Larger amounts or higher-value properties typically require a full interior appraisal.

What happens to my HELOC if home values drop in Minneapolis?

If your home's value declines significantly, your lender can reduce your credit limit or freeze your ability to draw new funds. This happened to some borrowers during 2008–2010. However, Minneapolis's market has been remarkably stable, and a significant decline is considered unlikely by most analysts. Even so, don't borrow to your maximum — leave a cushion.

Can I get a HELOC on a duplex in Minneapolis?

Yes. Minneapolis has a large stock of duplexes and triplexes, especially in the city's older neighborhoods. Most lenders will issue HELOCs on 1–4 unit properties as long as you occupy one of the units as your primary residence. Expect slightly stricter LTV requirements (75%–80% max) compared to single-family homes.

Bottom Line

Minneapolis-St. Paul is one of the best metro areas in the country for HELOC borrowers. The combination of competitive credit union rates, stable home values, and Minnesota's high state income tax rate (which magnifies the value of any interest deduction) makes HELOCs particularly attractive here. Start by getting quotes from Affinity Plus and TruStone, compare against U.S. Bank, and pay attention to the mortgage registry tax as a closing cost that can vary by lender. Most qualified Twin Cities homeowners should be able to secure a HELOC rate in the 6.75%–8.00% range.

Related Articles

• [[Home [Equity Explained](/blog/home-equity-explained)](/blog/what-is-home-equity): What It Is and How to Build It](/blog/home-equity-explained)
• Property Taxes Explained: How They Work and How to Reduce Them
• Best HELOC Lenders in 2026 - Compare Rates and Draw Periods