Texas [HELOC Rates 2026](/blog/heloc-vs-home-equity-loan-which-is-better): Top Lenders & Complete Homeowner Guide

Texas homeowners benefit from strong [property appreciation](/blog/best-cities-for-appreciation-2026), no state income tax, and a competitive lending market that delivers favorable HELOC rates in 2026. Whether you're in Houston, Dallas-Fort Worth, Austin, San Antonio, or smaller Texas communities, understanding your home equity options is essential. This comprehensive guide covers current rates, top lenders, and Texas's unique constitutional restrictions on home equity lending.

Current Texas HELOC Rates in 2026

As of February 2026, Texas HELOC rates typically range from 7.25% to 9.75% APR, varying by credit profile, property location, and loan-to-value ratio. Texas's strong economy and competitive banking sector contribute to rates that often beat national averages.

2026 Rate Predictions for Texas

Financial experts forecast these trends for Texas HELOC rates:

• Q1 2026: Rates stable at 7.5%-9.75% as lenders monitor Fed policy
• Q2 2026: Potential 0.25% decrease with continued economic strength
• Q3 2026: Moderate decline to 7.25%-9.50% range
• Q4 2026: Possible settling at 7.0%-9.25% with increased competition

Texas's robust job market, business-friendly environment, and population growth support favorable lending conditions. The state's energy sector recovery and technology expansion in Austin and Dallas contribute to economic stability.

Best HELOC Lenders in Texas (2026)

1. Frost Bank

• Rates: Starting at 7.25% APR
• Credit Line: Up to $500,000
• Why Choose: Texas-based with deep local expertise, relationship banking, excellent service
• Best For: Texas homeowners who value local banks with statewide presence

2. UFCU (University Federal Credit Union)

• Rates: Starting at 7.20% APR
• Credit Line: Up to $500,000
• Why Choose: Austin-based, competitive rates for members, strong community focus
• Best For: Central Texas residents and credit union members

3. Wells Fargo

• Rates: Starting at 7.45% APR
• Credit Line: Up to $500,000
• Why Choose: Extensive Texas presence, digital banking tools, relationship discounts
• Best For: Borrowers seeking national bank resources with local branches

4. Chase

• Rates: Starting at 7.40% APR
• Credit Line: Up to $500,000
• Why Choose: No closing costs up to $250,000, fast approval, strong Texas footprint
• Best For: Quick funding needs and digital-first borrowers

5. Bank of America

• Rates: Starting at 7.50% APR
• Credit Line: Up to $1 million
• Why Choose: High credit limits for luxury Texas properties, preferred rewards program
• Best For: High-value properties in major metro areas

6. Texas Trust Credit Union

• Rates: Starting at 7.30% APR
• Credit Line: Up to $400,000
• Why Choose: North Texas focus, member-owned, competitive rates
• Best For: Dallas-Fort Worth area homeowners

7. Randolph-Brooks Federal Credit Union

• Rates: Starting at 7.35% APR
• Credit Line: Up to $500,000
• Why Choose: San Antonio roots, military-friendly, strong member benefits
• Best For: South Texas and military-connected homeowners

8. Figure

• Rates: Starting at 7.95% APR
• Credit Line: $15,000 to $400,000
• Why Choose: Completely online, funding in 5 days, fixed-rate option
• Best For: Tech-savvy Texans seeking speed and convenience

Texas-Specific HELOC Regulations

Constitutional Restrictions (Article XVI, Section 50)

Texas has the nation's strictest home equity lending regulations, established by constitutional amendment:

Key Restrictions:

• 80% Maximum LTV: Combined mortgage and HELOC cannot exceed 80% of [home value](/blog/appraisal-process-explained) (lower than most states)
• No Cash-Out Refinancing Restrictions: Complex rules for combining cash-out with HELOCs
• Single Lien Limit: Generally only one home equity loan at a time (though refinancing allowed)
• Cooling-Off Periods: Mandatory waiting periods between certain types of transactions
• 12-Day Waiting Period: Must wait 12 days after application before closing
• Agricultural Exemption: Working farms/ranches under 200 acres face additional restrictions

Texas 50(a)(6) Lien

HELOCs in Texas are established under Section 50(a)(6) of the Texas Constitution, which provides:

Borrower Protections:

• Extensive disclosure requirements
• Prohibition on prepayment penalties
• Protection against forced arbitration
• Right to designate homestead
• Strict foreclosure procedures

Lender Requirements:

• Must be licensed Texas lender or federal institution
• Detailed application and closing disclosures
• Cooling-off periods strictly enforced
• Limited fees and closing costs

No State Income Tax Benefit

Texas has no state income tax, so HELOC interest deductions provide only federal tax benefits (unlike high-tax states with combined federal and state savings).

Homestead Protection

Texas's strong homestead laws protect unlimited home value from most creditors, but HELOC lenders retain foreclosure rights. Texas distinguishes between urban (up to 10 acres) and rural (up to 100-200 acres) homesteads.

Property Tax Considerations

Texas property taxes (averaging 1.69% statewide, among the highest in the nation) don't increase due to HELOC borrowing, but lenders factor high tax burden into debt-to-income calculations.

Homestead Exemption: Texas offers various property tax exemptions (school district, over-65, disability) that remain unaffected by HELOC status.

How to Qualify for a HELOC in Texas

Minimum Requirements

Credit Score: 640-680 minimum for most lenders; 740+ for best rates

Equity: Minimum 20% equity required (80% maximum CLTV under Texas law)

[Debt-to-Income Ratio](/blog/dti-ratio-explained): Generally 43% or lower; some lenders allow 50%

Income Verification: W-2s, pay stubs, tax returns (especially for self-employed)

Texas-Specific Considerations:

• High property taxes factored heavily into DTI calculations
• Strong employment in energy, technology, healthcare, and aerospace viewed favorably
• Urban vs. rural homestead designation affects underwriting
• Lenders more conservative due to strict Texas regulations
• 12-day mandatory waiting period adds time to process

Required Documentation

1. Texas driver's license or state ID
2. Proof of homeownership (deed showing homestead designation)
3. Recent mortgage statements
4. Homeowners insurance policy
5. Last 2 years of tax returns
6. Recent pay stubs or business income documentation
7. Property tax records (recent tax bills)
8. Flood insurance (if in flood zone)
9. HOA documentation (if applicable)
10. Agricultural exemption documents (if applicable)

Regional Rate Variations Across Texas

Houston Metro (Harris, Fort Bend, Montgomery)

• Average Rates: 7.25%-9.70%
• Typical Credit Lines: $50,000-$800,000
• Market Characteristics: Energy sector economy, diverse population, strong job market
• Unique Factors: Flood zone considerations, petrochemical industry employment, international population

Dallas-Fort Worth (Dallas, Tarrant, Collin, Denton)

• Average Rates: 7.30%-9.75%
• Typical Credit Lines: $50,000-$900,000
• Market Characteristics: Technology and finance hub, strong growth, corporate relocations
• Unique Factors: Rapid appreciation, competitive market, diverse economy

Austin Metro (Travis, Williamson, Hays)

• Average Rates: 7.25%-9.65%
• Typical Credit Lines: $60,000-$1,000,000
• Market Characteristics: Highest appreciation rates, technology sector, state capital
• Unique Factors: Fastest-growing market, high property values, competitive lending

San Antonio (Bexar, Comal, Guadalupe)

• Average Rates: 7.30%-9.75%
• Typical Credit Lines: $40,000-$600,000
• Market Characteristics: Military presence, tourism, healthcare hub, affordable compared to other major metros
• Unique Factors: Military-friendly lenders, steady growth, historic properties

Other Major Markets

• El Paso: 7.40%-9.80% | Strong border economy, affordable housing
• Corpus Christi: 7.35%-9.75% | Coastal considerations, energy sector
• Lubbock: 7.45%-9.85% | Agricultural economy, university presence
• The Woodlands/Suburbs: Often mirror Houston rates with slight variations

HELOC vs. Home Equity Loan in Texas

Both products face Texas's 80% LTV limit and 12-day waiting period, but HELOCs offer more flexibility for phased projects or emergency reserves.

Smart Uses for Your Texas HELOC

High-Value Applications

1. Energy Efficiency: AC upgrades critical in Texas heat ($8,000-$20,000)
2. Solar Installation: Excellent ROI in sunny Texas ($15,000-$35,000, plus federal credits)
3. Pool Installation: Valuable in Texas climate ($30,000-$70,000)
4. Storm/Hail Damage Repairs: Deductible coverage, roof replacement ($8,000-$25,000)
5. Kitchen/Bath Remodels: High-ROI improvements ($25,000-$100,000)
6. Garage Conversions: Additional living space ($15,000-$50,000)
7. Outdoor Living: Patios, outdoor kitchens popular in Texas ($10,000-$40,000)
8. Debt Consolidation: Eliminate high-interest [credit card debt](/blog/heloc-vs-credit-card)
9. Education: Texas universities and trade schools
10. Investment Property Down Payment: Texas rental market opportunities

Uses to Avoid

• Speculative oil/gas investments
• Cryptocurrency or volatile assets
• Daily living expenses (budget problem indicator)
• Luxury vehicles or depreciating assets
• Risky business ventures

Tax Implications for Texas Homeowners

Federal Tax Deductibility

HELOC interest is federally deductible when used to "buy, build, or substantially improve" your home, up to $750,000 in total mortgage debt.

No State Income Tax

Texas has no state income tax, so HELOC deductions only provide federal benefits.

Example: A Texas homeowner in the 24% federal bracket with $12,000 deductible HELOC interest saves:

• Federal: $2,880
• State: $0 (no Texas income tax)
• Total annual savings: $2,880

This compares to $4,000-$5,000+ for similar taxpayers in high-tax states like California or New York.

Property Tax Considerations

Texas property taxes are among the nation's highest (averaging 1.69% statewide, often 2-3% in specific counties). While HELOC borrowing doesn't increase your tax assessment, using funds for substantial improvements can trigger reassessment.

Texas Homestead Exemption: Various exemptions reduce taxable assessed value:

• School district exemption: $100,000 (2025+)
• Over-65 exemption: Additional savings, tax ceiling
• Disability exemptions: Substantial reductions

These remain unaffected by HELOC status.

Energy-Related Tax Benefits

If you use HELOC funds for qualified energy improvements:

• Federal Residential Clean Energy Credit: 30% of solar costs (through 2032)
• Texas energy efficiency rebates: Various utility company programs
• Property tax exemptions: Solar equipment not included in property value

Consult a Texas-licensed CPA for personalized advice.

Understanding Texas's 80% LTV Limit

Texas's constitutional 80% maximum combined loan-to-value is stricter than most states:

Practical Example:

• Home value: $500,000
• Existing mortgage: $300,000
• Maximum total debt: $500,000 × 0.80 = $400,000
• Available HELOC: $400,000 - $300,000 = $100,000

Compare to 90% LTV states where the same homeowner could access $150,000.

Why the Restriction? Texas constitutional protections prioritize homeowner equity protection over lender access. While this limits borrowing, it also provides stronger equity cushion during market downturns.

Frequently Asked Questions

What credit score do I need for a Texas HELOC?

Most Texas lenders require 640-680 minimum, with best rates at 740+. Some credit unions may work with scores as low as 620 for members with strong relationships.

Why is Texas's HELOC limit only 80% LTV?

Texas Constitution Article XVI, Section 50 limits all home equity lending to 80% LTV to protect homeowners from over-leveraging. This constitutional protection survived the 2008 financial crisis remarkably well.

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

Minimum 12 days by law (waiting period after application before closing), but typical process takes 3-4 weeks total with application review, appraisal, underwriting, and mandatory waiting period.

Can I have multiple HELOCs on my Texas home?

Generally no. Texas law typically allows only one home equity loan at a time, though you can refinance existing home equity debt. Some lenders offer subordination agreements in specific circumstances.

Are HELOC rates lower in Texas due to strong economy?

Texas rates are competitive due to a robust lending market, but not necessarily lower than all states. Credit unions often offer the best rates, sometimes 0.50%-0.75% below national banks.

How do Texas property taxes affect HELOC qualification?

Texas's high property taxes (often $400-$800/month on median homes) significantly impact debt-to-income ratios, potentially reducing your maximum HELOC amount compared to lower-tax states.

Can I get a HELOC on Texas agricultural property?

Yes, but restrictions apply. Agricultural homesteads under 200 acres face additional requirements. Working farms/ranches may have limited options. Consult lenders specializing in agricultural lending.

What happens if I violate Texas HELOC regulations?

Violations of Texas Constitution Article XVI, Section 50 can void the lien, meaning the lender loses foreclosure rights. This strong borrower protection means lenders strictly follow Texas rules.

Can I use a HELOC to buy Texas investment property?

Yes, and Texas's strong rental markets (especially Austin, Dallas, Houston) make this common. However, interest typically isn't tax-deductible when used to purchase other properties.

Tips for Securing the Best Texas HELOC Rate

1. Improve Your Credit Score: Target 760+ for premium rates; pay down balances 3-6 months before applying
2. Shop Texas Credit Unions: UFCU, Texas Trust, Randolph-Brooks often beat national banks by 0.50%-0.75%
3. Leverage Banking Relationships: Existing Frost Bank or regional bank customers get discounts
4. Maximize Your Equity: With 80% LTV cap, having 30%+ equity provides best terms
5. Document Stable Income: Strong employment history in stable Texas industries helps
6. Plan for 12-Day Wait: Don't expect same-day or next-day funding; Texas law requires waiting period
7. Review Property Taxes: Ensure taxes are current; delinquencies disqualify applications
8. Check Homestead Designation: Properly filed homestead can improve terms
9. Compare Multiple Lenders: Get quotes from at least 4-5 lenders
10. Negotiate Fees: Texas limits some fees; compare lender charges carefully
11. Choose Auto-Pay: Most lenders offer 0.25% rate reduction
12. Consider Timing: Apply during stable market periods for best terms

Texas Economic Outlook and HELOC Markets

Texas's strong economic fundamentals support favorable [HELOC conditions](/blog/heloc-application-mistakes):

Strengths:

• No state income tax attracts businesses and residents
• Leading the nation in job creation
• Diverse economy: energy, technology, healthcare, aerospace, agriculture, manufacturing
• Strong population growth and net migration
• Business-friendly regulatory environment
• Major corporate relocations (Tesla, Oracle, HP, others to Austin)

Considerations:

• Property tax burden among nation's highest
• Energy sector volatility affects some regional economies
• Rapid growth straining infrastructure in some areas
• Property insurance costs rising
• Water availability concerns in some regions

Despite challenges, Texas's economic trajectory supports strong property values and competitive HELOC markets across the state.

Next Steps: Get Your Texas HELOC

Ready to access your Texas home equity? Follow this process:

1. Check Your Credit: Get free reports from AnnualCreditReport.com
2. Estimate Home Value: Use Zillow, Redfin, or recent Texas comps
3. Calculate Available Equity: (Home value × 0.80) - Current mortgage = Maximum HELOC
4. Review Property Taxes: Ensure current on payments; gather recent bills
5. Compare Lenders: Get quotes from recommended Texas lenders
6. Gather Documentation: Tax returns, pay stubs, insurance, homestead records
7. Apply to 2-3 Lenders: Submit within 14 days to minimize credit impact
8. Plan for Timeline: Account for Texas's mandatory 12-day waiting period
9. Review Offers: Compare rates, fees, terms carefully
10. Close and Access Funds: Complete process and receive your credit line

Texas homeowners have excellent opportunities in 2026 to leverage home equity at competitive rates. Whether you're upgrading your Houston home's AC, adding a pool to your Dallas property, or expanding your Austin residence, a HELOC provides flexible financing.

[Start your Texas [HELOC application](/blog/heloc-application-process-step-by-step) today →](/get-started)

Our lending experts understand Texas's unique constitutional restrictions and strong regional markets. We'll help you navigate the 80% LTV limit, 12-day waiting period, and lender options to secure the best possible terms for your situation.

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Disclaimer: HELOC rates and terms vary by lender and borrower qualifications. This guide provides general information and should not be considered financial or legal advice. Consult licensed Texas professionals for personalized guidance. Honest Casa connects homeowners with lending solutions.

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