HELOC Rates in Minnesota: Your 2026 Guide to Home Equity Lines of Credit

Minnesota homeowners enjoy a stable housing market, a deep pool of local lenders, and home values that have climbed steadily throughout the 2020s. If you're looking to tap into your equity with a HELOC, the North Star State offers plenty of competitive options. Here's your complete guide.

Minnesota Housing Market Overview

Minnesota's housing market is anchored by the Twin Cities metro (Minneapolis–St. Paul), which accounts for roughly 60% of the state's population and an outsized share of its real estate activity. But growth has been broad-based across the state.

Key market data:

• Statewide median home value: Approximately $340,000
• Minneapolis–St. Paul metro: $370,000–$400,000
• Rochester: $320,000 (boosted by Mayo Clinic employment)
• Duluth: $265,000
• St. Cloud: $260,000
• Greater Minnesota (rural): $180,000–$250,000

Home values have appreciated roughly 30–40% since 2020 in most metro-area markets, with some suburban communities seeing even stronger gains. This appreciation has generated substantial home equity for long-term owners.

Minnesota's economy is diverse and resilient, anchored by Fortune 500 companies (Target, UnitedHealth Group, 3M, General Mills, Best Buy), a strong healthcare sector, and robust agricultural production. Low unemployment and stable wages support both housing demand and borrower creditworthiness.

Current HELOC Rates in Minnesota

Minnesota HELOC rates in early 2026 generally range from 7.00% to 9.00% APR, with the most competitive rates coming from credit unions and community banks.

Rate breakdown by credit tier:

• Excellent credit (750+): 6.75%–7.50% APR
• Good credit (700–749): 7.50%–8.25% APR
• Fair credit (660–699): 8.25%–9.00% APR
• Below 660: Limited options; expect 9.00%+ if approved

Minnesota's credit union market is exceptionally competitive. The state ranks among the top 10 nationally for credit union membership per capita, and these institutions use HELOCs as a key product to attract and retain members.

Introductory rate offers are common, with several Minnesota credit unions advertising rates of 5.99%–6.49% for the first 6–12 months. These typically adjust to prime +/- a margin afterward.

Lender Landscape: Who Offers HELOCs in Minnesota

Best Local and Regional Lenders

Affinity Plus Federal Credit Union One of Minnesota's largest credit unions, Affinity Plus offers HELOCs with no closing costs, no annual fee, and rates that consistently rank among the best in the state. They serve anyone who lives, works, worships, or attends school in Minnesota.

Wings Financial Credit Union Originally serving airline employees, Wings is now open to a broader membership. They offer competitive HELOC rates, flexible draw periods, and strong digital banking tools. Rates for top-tier borrowers have been running around 7.00–7.50% APR.

TruStone Financial Credit Union Formed from the merger of several Minnesota credit unions, TruStone serves the Twin Cities metro and surrounding areas. Their HELOC product includes a fixed-rate conversion option and no annual fee.

Bremer Bank A well-established regional bank serving Minnesota, Wisconsin, and North Dakota. Bremer offers HELOCs with competitive rates and the flexibility of a bank that understands Upper Midwest real estate.

Old National Bank (formerly Alerus) Growing presence in Minnesota with solid HELOC products, including options for investment properties and second homes.

Best National Lenders Active in Minnesota

U.S. Bank Headquartered in Minneapolis, U.S. Bank is arguably both a "local" and national lender. Their HELOC product is well-regarded, with rate discounts for existing banking customers and a streamlined application process. Having their headquarters here means strong institutional knowledge of the Minnesota market.

Wells Fargo Also with significant Minneapolis operations (thanks to the former Norwest Bank heritage), Wells Fargo offers HELOCs with relationship discounts and the option to lock in fixed rates on portions of your balance.

Chase Growing branch presence in the Twin Cities. Their HELOC product features autopay discounts and a solid mobile banking experience.

Figure Fully online HELOC with fast approval. Their fixed-rate structure appeals to Minnesota borrowers concerned about rate volatility during cold-weather months when they might not be monitoring their finances as closely.

[HELOC Requirements](/blog/heloc-application-process-step-by-step) in Minnesota

Seasonal considerations: If you're self-employed in a seasonal industry (construction, landscaping, tourism), Minnesota lenders are generally familiar with seasonal income patterns and may be willing to work with you on income documentation. Two years of tax returns showing consistent annual income is key.

Lake properties: Minnesota's abundant lake homes present unique HELOC considerations. Lenders will evaluate whether a lake property is a primary residence or second home — this affects the rate and CLTV limits. Seasonal-use lake cabins may not qualify for HELOCs from all lenders.

Minnesota-Specific Regulations

Title company state: Minnesota uses title companies (not attorneys) for real estate closings, keeping closing costs and timelines manageable.

Mortgage registration tax: Minnesota levies a mortgage registration tax of $0.23 per $100 of the mortgage amount (0.23%). On a $100,000 HELOC, that's $230. This applies when the HELOC mortgage is recorded with the county. Some lenders absorb this cost as part of no-closing-cost HELOC offers.

Deed tax: The state deed tax (0.33% of the sale price) does not apply to HELOCs, only to property transfers. Don't confuse the two.

Conservation/environmental considerations: If your property is in a designated wetland, shoreland, or floodplain area — common in Minnesota — this can affect appraisal values and lender willingness. Properties with environmental restrictions may appraise lower than comparable homes without them.

Homestead classification: Minnesota's homestead law provides property tax benefits for primary residences. This classification is important for HELOC qualification because it affects your property tax bill and, by extension, your DTI ratio.

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

Tax Implications

Federal taxes: HELOC interest is deductible only when funds are used to buy, build, or substantially improve the home securing the loan. The $750,000 combined mortgage debt ceiling applies.

Minnesota state taxes: Minnesota has a progressive income tax with rates ranging from 5.35% to 9.85% — one of the highest state tax rates in the country. The top bracket kicks in at about $193,000 for single filers and $284,000 for joint filers.

Minnesota generally conforms to federal treatment of mortgage interest deductions. If your HELOC interest is deductible federally, it's deductible on your Minnesota return. Given Minnesota's high marginal tax rates, this deduction can be particularly valuable. A homeowner in the top bracket who pays $5,000 in deductible HELOC interest saves nearly $500 on state taxes alone, plus the federal benefit.

Practical note: Minnesota's high state tax rates make the [HELOC interest deduction](/blog/heloc-for-rental-property-renovation) more valuable here than in most states. If you're planning home improvements, using a HELOC (and deducting the interest) instead of paying cash can be a smart tax play — consult your tax advisor for your specific situation.

Property Tax Context

Minnesota property taxes are above the national average, with an effective rate of approximately 1.08%. However, the state's complex classification and credit system means actual tax burdens vary widely:

• Minneapolis: ~1.22%
• St. Paul: ~1.35%
• Edina: ~0.89%
• Rochester: ~1.15%
• Duluth: ~1.33%
• Bloomington: ~0.98%

For a $370,000 home in Minneapolis, annual property taxes run approximately $4,500. In more affluent suburbs like Edina, a $550,000 home might carry taxes around $4,900.

Homestead market value exclusion: Minnesota provides a property tax reduction for homestead properties worth up to $413,000. This exclusion reduces taxable market value by up to $30,400, saving homeowners several hundred dollars annually. This benefit is automatic for homestead properties and helps with HELOC qualification by keeping your housing expenses lower.

Property tax refund: Minnesota also offers an income-based property tax refund (the "circuit breaker") for homeowners whose property taxes are high relative to their income. This is filed with your state tax return and can provide meaningful relief.

Frequently Asked Questions

How fast can I get a HELOC in Minnesota?

Most Minnesota lenders close HELOCs in 2–4 weeks. Credit unions like Affinity Plus and Wings Financial tend to be on the faster end. Online lenders like Figure can close in under two weeks. The main timeline driver is the appraisal — in rural areas or for lake properties, finding an appraiser can take longer.

Can I get a HELOC on a lake cabin in Minnesota?

Yes, but with limitations. Most lenders will offer HELOCs on second homes/vacation properties, including lake cabins, but at slightly higher rates (typically 0.25–0.50% higher) and lower CLTV limits (often capped at 75–80%). The property must be a permanent structure with year-round access — seasonal-only structures on leased land are harder to finance.

Do Minnesota credit unions really offer better HELOC rates?

Generally, yes. Minnesota credit unions consistently offer HELOC rates 0.25–0.75% below comparable bank products, with lower or no closing costs. The trade-off is that credit unions may have less sophisticated digital tools and slower processing for complex applications. For straightforward HELOCs, credit unions are hard to beat.

What if my home value has dropped — can the lender freeze my HELOC?

Yes. Under federal and state law, lenders can suspend or reduce your HELOC credit line if your home's value declines significantly. They must notify you in writing. Minnesota's generally stable housing market makes this less common than in more volatile states, but it's a possibility during any market downturn.

Should I choose a [HELOC or home equity loan](/blog/home-equity-loan-vs-heloc-2026) in Minnesota?

It depends on your needs. Choose a HELOC if you want flexible access to funds over time (e.g., ongoing renovations, emergency reserve). Choose a home equity loan if you need a specific lump sum and want a fixed rate and predictable payments. Minnesota lenders offer both products at competitive rates. Given current rate uncertainty, many Minnesota borrowers are opting for HELOCs with fixed-rate conversion options — the best of both worlds.

The Bottom Line

Minnesota is an excellent state for HELOC borrowers. Stable home values, a competitive credit union landscape, and a strong local economy create favorable conditions. The state's high income tax rates make the mortgage interest deduction particularly valuable if you're [using HELOC funds](/blog/heloc-draw-period-explained) for home improvements.

Your best strategy: Start with Minnesota credit unions (Affinity Plus, Wings Financial, TruStone), then compare with U.S. Bank and Wells Fargo for relationship pricing. Factor in the 0.23% mortgage registration tax when comparing total costs, and ask about fixed-rate conversion options if you plan to borrow a large amount. Minnesota homeowners have strong HELOC options — the key is comparing at least three lenders before committing.

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
• [Best Investment Property Lenders in 2026 - Rental & [Multifamily Loans](/blog/best-investment-property-lenders-2026)](/blog/best-investment-property-lenders-2026)