Rate Lock Analyzer
Should you lock in a fixed rate or stay variable? Model different interest rate scenarios to understand your risk and potential savings.
Rates Are Volatile
Over the last decade, prime rates have fluctuated significantly. A variable rate HELOC exposes you to this volatility, while a fixed rate offers stability.
Usually higher than variable start rate
Maximum possible rate (check contract)
Fixed Rate Option
Guaranteed stability
$396/mo
Total Cost: $47,500
$31,250
Save $16,250 vs Fixed
$42,500
Save $5,000 vs Fixed
$85,250
Pay $37,750 more vs Fixed
Worst Case Payment Shock
Highest possible monthly payment in worst scenario
$750/mo
+$354 vs Fixed
Recommendation
Consider Locking (High risk of rate increases)
Understanding Rate Risk
Most HELOCs come with variable interest rates that change with the Prime Rate. While these rates often start lower than fixed-rate loans, they can increase significantly over time.
Variable Rate Pros & Cons
- ✓Lower initial interest rate
- ✓Payments drop if rates fall
- ✗Payments rise if rates increase
- ✗Unpredictable monthly budget
Fixed Rate Pros & Cons
- ✓Predictable monthly payments
- ✓Protection against rate hikes
- ✗Higher initial interest rate
- ✗No benefit if rates fall
The Hybrid Option
Many modern HELOCs allow you to "lock" a portion of your balance into a fixed rate while keeping the rest variable. This gives you the best of both worlds.
Ask About Hybrid HELOCs