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Fixed vs Variable HELOC Calculator
Many HELOCs let you 'lock' a portion at a fixed rate for a specific term while keeping variable-rate access to the remaining line. Fixed costs a premium (typically 0.5-1% higher than variable start); variable risks rising prime. This calculator compares the two paths.
Recommendation
Keep variable
Fixed total cost
$32,250
Variable base-case total cost
$28,594
Variable stress-case total cost
$31,875
Conversion fee
$375
Lock savings vs base case
-$3,656
Lock savings vs stress case
-$375
How the math works
$75K × 5 yrs: fixed 8.5% + 0.5% fee = ~$32K total. Variable starts 7.75%, ends 7.5% base case → avg 7.625% → ~$28.6K. Variable stress ends 9.25% → avg 8.5% → ~$31.9K.
Base case: variable wins by $3.4K. Stress case: nearly tied. If you believe rates will flatten or fall, keep variable. If rising is likely, lock fixed. For risk-averse borrowers, the lock's $3.4K premium in base case is cheap insurance.
How to Use
- Enter HELOC balance to be compared, hold period months, and variable-start rate.
- Enter the fixed-lock rate and conversion fee (flat or % of balance).
- Enter expected variable rate path (base, stress +1%, stress +2%).
- See interest cost and recommendation across scenarios.
Frequently Asked Questions
What's a typical fixed-rate advance premium?
0.5-1.5% over the variable start. Fixed-rate HELOC advance at 8.5% when variable is 7.5%. The premium buys you protection against rising rates over the lock period.
When should I lock?
Long hold (4+ years) + rising-rate environment + variable already high. If rates are near peak and you expect declines, don't lock — keep variable. If rates are mid-cycle and climbing, lock is usually right.
Conversion fee impact?
Typical: $50-$150 flat or 0.25-1% of the locked amount. $50K lock at 0.5% = $250 fee. Not huge but factor in. Reset fee to re-lock often exists if you want to lock at different rates during the draw period.
What about a hybrid approach?
Lock 50% at fixed, keep 50% variable. Diversifies rate risk. Useful if you'll pay down half in the near term (variable) and keep half outstanding long-term (fixed).
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