Why You Can Trust the MarketWatch Guides Team
Here’s a breakdown of how we reviewed and rated top home equity lenders
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Providers MonitoredOur team researched more than two dozen of the country’s most home equity lenders, including large companies like Navy Federal Credit Union, U.S. Bank, TD Bank, Third Federal and Spring EQ.
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Data Points AnalyzedTo create our rating system, we analyzed each home equity lender’s disclosures, licensing documents, marketing materials, sample loan agreements and websites to understand their loan offerings and terms.
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Loan Features TrackedOur team regularly collects data on each company’s loan offerings and terms, such as minimum and maximum loan amounts, origination fees and discounts.
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Professionals ConsultedBefore we began our research process, we consulted with financial advisors and industry experts to ensure our evaluations covered the banking product aspects that matter most to potential customers.
Our Thoughts on Bank of America HELOCs
MarketWatch Guides Rating: 4.7 out of 5 stars
Bank of America offers some compelling features for those in the market for a HELOC. Notably, its loan amounts reach up to a generous $1 million, which is considerably higher than what many other lenders might provide. This can be a game-changer for homeowners with substantial equity in their property.
Plus, the option to convert variable-rate HELOCs into fixed-rate loans provides borrowers with added flexibility and predictability. But while these terms are attractive, it’s worth noting that Bank of America doesn’t offer traditional home equity loans. Also, you must close on your loan in person.
When stacked against other lenders, BofA’s HELOC product is certainly competitive, especially for those looking for larger loan amounts. But like all home equity products, you should familiarize yourself with the eligibility requirements to see if it’s the right fit for you.
Overview of Bank of America HELOCs
| Loan limits | $25,000 to $1 million* |
| Loan-to-value (LTV) ratio | 85% |
| Minimum credit score requirements | Not disclosed |
| Repayment terms | 10-year draw period; 20-year repayment period |
| Discounts | Introductory APR for six months0.25% rate discount for autopay from BoA account0.10% to 1.50% initial withdrawal discount0.625% Bank of America Preferred Rewards member discount |
| Fees | No annual fees No application fees No closing costs on loans up to $1 million $450 early closure fee |
*In some areas, the minimum line limit might be $15,000 and the maximum line limit might be $500,000.
>> Related: Learn how to get the best HELOC rates
Pros and Cons of Bank of America HELOCs
When considering a HELOC from Bank of America, it’s essential to weigh the benefits and potential drawbacks. Let’s take a closer look:
Pros
No application or annual fees: Bank of America typically doesn’t charge any application or annual fees for its HELOCs, making it a cost-effective option if you’re looking to leverage your home equity.
Closing costs covered: For lines up to $1 million, Bank of America often covers the closing fees, which can save you a significant amount upfront.
Several discounts: Setting up automatic payments from a Bank of America account can get you a 0.25 rate discount. There are also discounts for making a large initial withdrawal and being a BofA Preferred Rewards member.
Fixed-rate loan conversion available: You have the option to convert part or all of your variable-rate HELOC to a fixed-rate loan during the loan term. This can provide protection against rising interest rates.
Cons
Early closure fee: If you decide to close your HELOC account within three years, there’s typically a $450 termination fee plus any closing costs BofA initially paid for you.
Minimum line amount: The starting line amount for a BofA HELOC is usually $25,000. If your home equity doesn’t cover this, or if you need a smaller amount, this might not be the right loan product for you.
No home equity loans: Rather than offering home equity loans, BofA offers borrowers the option to lock in a fixed rate on part of your HELOC. You can’t get a home equity loan directly as BofA doesn’t offer other equity loan types.
In-person closing required: While BofA offers extensive online services, the final loan closing must be done at a brick-and-mortar location. This might be inconvenient if you prefer entirely digital transactions.
Limitations for non-customers: If you’re not already a Bank of America customer, you might miss out on some perks like additional rate discounts for Preferred Rewards members.
Who Are Bank of America HELOCs Best For?
If you’re looking for a jumbo HELOC of up to $1 million, BofA stands out. It’s also a good choice if you’re a current Bank of America customer because you might get preferential rates or reduced fees. Being an existing customer can make the application process smoother, too.
Since Bank of America has financial centers in most states, it’s also a good choice if you like face-to-face interactions or want a physical location to visit. Generally, Bank of America offers competitive interest rates. If your credit score is strong, you could qualify for the best rates.
But if your financial situation makes it hard to meet the criteria for lower rates, or if you’re looking for a smaller, short-term loan, BofA’s HELOC might not be the most cost-effective choice. Its early closure fee of $450 is something to consider if you’re not planning on keeping the HELOC open for long.
>> Related: Learn more about the best short-term personal loans
How to Get a Bank of America HELOC
Getting a home equity loan with Bank of America can be a streamlined process if you’re prepared with the right documentation. Here’s what to expect:
Application Process
You can apply for a Bank of America HELOC by submitting an online application or visiting a local branch. Be ready with documentation like proof of income, personal identification and information about your home’s value.
After applying, Bank of America will review your details and may require a property appraisal. Generally, the process from application to decision can span several weeks, depending on your circ*mstances.
Approval and Funding
Once your application is in, you won’t be alone in navigating the next steps. BofA provides lending specialists to guide you throughout the process. These specialists are there to assist, and if you’re interested in having predictable monthly payments over a fixed term, they can also help you explore the fixed-rate loan option.
BofA offers a digital platform where you can securely upload necessary documents. But once you’re approved, you’ll have to close at a physical financial center. You can’t complete the closing process online. After closing, you’ll be able to access your new home equity line of credit whenever you need it.
While the application process may be slower than HELOC lenders like Figure, which can get you funds in as soon as five days, you can speed up the process by making sure all your documents are up to date. Also, promptly respond to any inquiries from the bank. Proactive communication is key for a smooth experience.
>> Related: Learn more about the requirements for a HELOC
Bank of America HELOC Reviews
While researching Bank of America’s home equity line of credit reviews, we noticed a scarcity of HELOC-specific feedback. The majority of reviews were centered around BoA’s general banking services. Despite this, we’ve managed to extract some insights from a mix of third-party sites like ConsumerAffairs and Trustpilot that shed light on customer’s real-life experiences.
“Bank of America is very easy to work with, both on our mortgage and our HELOC. We’ve had a couple of mortgages with them and they’ve worked as expected. At one point our mortgage was going to go up because the escrow was getting low. We added some money to the escrow and kept our payment low because they informed well in advance about this situation.”
– Jonathan, March 11, 2020, ConsumerAffairs
“I’ve been banking with BofA since 2003, great customer service.”
– Sandy, Aug. 23, 2023, Trustpilot
“Never had any problems with this bank which I’ve been using for years.”
– John M., July 9, 2023, Trustpilot
Eligibility Requirements for Bank of America HELOCs
Wondering if you meet the eligibility requirements for a Bank of America HELOC? Here’s what to expect:
Credit Score and Financial History
Typically, a credit score in the mid-to-high 600s is required for a Bank of America HELOC, although higher scores can secure better rates. Your financial history, including your credit history, debt-to-income ratio (DTI) and payment history, plays a significant role in eligibility and terms. DTI measures your monthly debt obligations versus your monthly income.
If your credit score isn’t as high as you’d like it to be, you can increase your chances of approval by paying bills on time and reducing your debt balances.
Home Equity and LTV Ratio
Bank of America requires you to have a substantial amount of equity in your home to get approved for a HELOC. It will look at your loan-to-value ratio (LTV) to determine how much equity you have. This ratio is calculated by dividing your mortgage balance by your home’s current appraised value.
A lower LTV indicates higher equity. Typically, Bank of America prefers an LTV ratio of 85% or lower. To meet these requirements, make extra mortgage payments or improve your home to boost its market value. Monitoring the value of your home and your outstanding mortgage balance can help you gauge your LTV ratio.
Bank of America HELOC Usage Rules
Bank of America doesn’t have strict rules on how you can use your HELOC money. But in general, it’s wise to use HELOCs for value-adding purposes. Common uses include home improvement projects, consolidating high-interest credit card debt, covering education expenses or paying for major life events like weddings or medical emergencies.
While you have the liberty to use the funds as needed, remember that your home is the collateral, so careful spending will help you make the most of this financial tool without risking your property.
Bank of America HELOC Fees and Penalties
Navigating the potential costs associated with a Bank of America HELOC can save you from unexpected charges. It’s essential to understand both the upfront fees and any potential penalties that might arise during the life of your line of credit.
Early Repayment Penalties
Bank of America covers all closing costs on HELOCs up to $1 million. But should you decide to pay off your account within 36 months of its opening, be prepared for an early closure fee of $450.
There are a few exceptions, though. The early closure fee doesn’t apply to accounts with a line amount under $25,000 or properties located in Maryland. Texas residents are exempt from this fee.
Interest Rates and APRs
Bank of America offers a special variable intro rate on HELOCs. For instance, in California, borrowers can benefit from a 7.49% variable APR for the first six months. But, after this introductory period, the rate will adjust. The post-introductory rate differs by state, so always check the specific rate for your location. In our California example, the rate changes to a 9.90% variable APR after six months of your HELOC being open.
Before committing to a HELOC, simulate both rates in your budget — and be prepared for your variable rate to change. The initial period might offer savings, but it’s the variable rate that will influence your long-term costs. By planning for these inevitable rate increases ahead of time, you can reduce the likelihood of putting your financial well-being at risk.
How Bank of America Compares to Other Lenders
If you’re not sure if Bank of America is right for you, comparing it to other HELOC lenders can help you weigh your options.
Bank of America vs. PNC Bank
Bank of America and PNC Bank are both mortgage lenders with competitive HELOCs. BofA’s HELOC starts with an introductory variable rate for the first six months. Past this period, the base rate varies by state and creditworthiness. Both banks have rate discounts when you set up automated payments from their respective checking accounts.
In terms of eligibility, PNC offers a loan-to-value maximum of up to 89.9% for 1st lien Choice HELOCs and has varying LTV ratios depending on state regulations. Bank of America’s HELOCs go up to $1 million, but the maximum LTV ratio isn’t specified.
>> Related: Learn more about PNC Bank HELOCs
Bank of America vs. Navy Federal
If you’re a military member seeking a credit line up to $500,000, Navy Federal might be a better fit. But if you’re eyeing larger loan amounts of up to $1 million and want a lower introductory APR, BofA could be more appealing.
Both institutions waive application and origination fees, a significant cost-saving measure. Navy Federal stands out with a longer draw period of 20 years, double BofA’s 10-year duration. This extended period could benefit those anticipating longer-term, staggered borrowing needs or needing lower monthly payments.
Bank of America vs. Guaranteed Rate
Guaranteed Rate stands out for its impressive speed, approving applications in as little as five minutes, and offers a 100% digital HELOC experience. This makes the process smooth and efficient for borrowers seeking rapid approval. However, while BofA starts with a lower introductory APR, Guaranteed Rate has base APRs that are slightly higher.
In terms of loan limits, BofA offers more substantial HELOCs, allowing borrowing of up to $1 million, whereas Guaranteed Rate caps its limit at $400,000. BofA doesn’t have any origination fees, while Guaranteed Rate does, which will add to your borrowing costs.
Also, Guaranteed Rate offers a fixed-rate HELOC across the board, so you can always predict your monthly payments. In contrast, BofA has a fixed-rate option that lets you lock in part of your HELOC if you’re wary of fluctuating interest rates.
The Bottom Line
Bank of America’s HELOC offerings stand out, particularly for those who need loan amounts up to $1 million. It can be a great alternative to a cash-out refinance. While introductory rates can be appealing, always be prepared for the eventual rise in APR and factor this into your financial planning. Ultimately, matching BofA’s HELOC features with your specific needs will determine if it’s the right choice for you. Don’t be afraid to shop around to find the best HELOC rates and terms.
>> Related: Read our Bank of America review
How We Rate Bank of America HELOCs
| Affordability | 25/25 |
| Loan Features | 22/30 |
| Customer Experience | 25/30 |
| Company Reputation | 10/15 |
| Total | 82/100 |
Our team put together a comprehensive 100-point rating system to evaluate lenders that offer home equity lines of credit, with criteria based on factors that are most important to potential borrowers.
We then gathered dozens of data points from across the HELOC industry, reviewing disclosures, licensing documents, sample loan agreements, marketing materials and websites from more than 20 of the most prominent HELOC companies in the U.S.
Our rating system takes into account four broad areas. Here’s a short description of each category.
- Loan features (35%): This category measures how friendly each HELOC company’s loan terms are to potential borrowers. The most points go to lenders with a wide range of loan amounts, solid fixed-rate options, fast closing speeds and small minimum draws.
- Customer experience (30%): We review each company’s application, prequalification and customer service policies and procedures to create this category score. The best companies will have simple online applications and multiple ways for customers to get their problems solved.
- Affordability (20%): We gauge how expensive each company’s loans are to pay back, taking into account fees and closing costs. The highest-scoring lenders will have low or no annual fees, origination fees and other closing costs.
- Company reputation (15%): Our team analyzes each company’s Better Business Bureau file, customer reviews and any outstanding regulatory actions. The most points will go to companies with an A+ rating with the BBB, a track record of addressing customer complaints and no active regulatory orders.
This rating system is intended to give readers a comprehensive overview of each HELOC lender. However, our top-rated companies may not be the best fit for everyone. To learn more, you can read our full HELOC rating methodology.
Frequently Asked Questions About Bank of America HELOCs
You typically need a good credit score to qualify for a Bank of America HELOC. But the exact credit score threshold will depend on your income, debt and home’s equity. Bank of America considers your entire financial profile, not just your credit score.
The time it takes to get a HELOC from Bank of America can vary based on individual circ*mstances and application details. Generally, after submitting a complete application, it can take several weeks to process and approve. Once approved, additional time might be required for property valuation and final documentation. Talk to a Bank of America loan specialist for specific timeframes.
The rates on a Bank of America HELOC vary by state. For instance, in California, there’s a special variable introductory rate of 7.49% APR for the first six months. After the introductory period, the rate becomes a variable 9.90% APR. These rates include certain discounts.
Yes, Bank of America offers a Fixed-Rate Loan Option for their HELOCs. With this option, you can convert all or a portion of your outstanding variable-rate balance to a fixed interest rate. The minimum amount to convert is $5,000. There are no conversion fees associated with switching to this Fixed-Rate Loan Option.
If you have feedback or questions about this article, please email the MarketWatch Guides team ateditors@marketwatchguides.com.
