Fixed vs. Variable Rate HELOCs
Most HELOCs carry a variable rate tied to the Prime Rate. A small number of digital programs offer fixed rates. The difference affects your payment certainty and how you should think about rate risk.
Variable-Rate HELOCs
Variable-rate HELOCs are priced as Prime plus a margin. When the Federal Reserve raises or lowers rates, your HELOC rate moves with Prime. Programs like NFTYDoor, REMN HELIX and Deephaven are variable-rate products. Your payment can change over the life of the line.
Fixed-Rate HELOCs
Aven offers a fixed-rate HELOC — your rate is set at closing and does not change. Figure offers both fixed and variable options depending on the product selected. A fixed rate provides payment certainty but may be priced higher than the initial variable rate in a low-rate environment.
Which Is Better?
Neither is universally better. A variable rate may be lower initially and beneficial if rates fall. A fixed rate protects against rate increases and simplifies budgeting. The right choice depends on your rate outlook, how long you plan to carry a balance, and your tolerance for payment variability.
How Rate Type Interacts With Payment Structure
Rate type and payment structure are separate decisions. A fixed-rate HELOC (like Aven) is also fully amortizing — you pay principal and interest from day one. A variable-rate HELOC may be interest-only during the draw period (like NFTYDoor or HELIX) or amortizing (like Figure). These combinations produce very different required payments.
Rate Type by Program
| Program | Rate Type | Note |
|---|---|---|
| Aven | Fixed | Fixed rate, fully amortizing from day one. |
| Figure | Fixed or Variable | Both options available depending on product selected. |
| NFTYDoor | Variable (Prime + margin) | Interest-only during 3-year draw. |
| REMN HELIX | Variable (Prime + margin) | Interest-only during 5-year draw. |
| Deephaven | Variable (Prime + margin) | Interest-only during 5-year draw. |
HELOC guidelines change frequently. This content is educational and is not a loan approval, commitment or guarantee.