HELOC Margin vs Prime Rate Calculator
HELOC rates are quoted as 'Prime + X%' where X is the lender's margin. A 1% margin difference can cost tens of thousands over a 30-year HELOC. Compare two lender quotes side-by-side under rising and falling prime rate scenarios.
| Current Prime Rate | — |
| Lender A Margin | — |
| Lender B Margin | — |
| Lender A Rate | — |
| Lender B Rate | — |
| Lender A Monthly Interest | — |
| Lender B Monthly Interest | — |
| Lender A Lifetime Interest | — |
| Lender B Lifetime Interest | — |
| Lender A Monthly (Future Prime) | — |
| Lender B Monthly (Future Prime) | — |
How HELOC Pricing Actually Works
HELOC rates are variable, set as 'Prime + margin'. The prime rate moves with the Federal Reserve's federal funds rate target. As of April 2026, prime is around 8.5%. Your margin — the lender's markup over prime — varies from 0.25% to 3% based on credit, LTV, and lender pricing aggressiveness.
The lender cannot change your margin after origination (it's fixed in your loan agreement). But the prime rate can move 25-50 bps in either direction with each Fed move. Lenders are aggressive about competing on margins for prime borrowers (credit 760+, LTV under 70%).
Source: Federal Reserve FRED prime rate history (H.15)
Why a 1% Margin Difference Matters
On a $75,000 HELOC over 10 years at prime + 0.5% vs prime + 1.5%, the higher-margin loan costs an extra $7,500 in interest. On a $200,000 HELOC, that's $20,000 difference. Margin is the single biggest negotiable line item on a HELOC.
Most banks will quote 1-1.5% above prime as their default. Credit unions and online lenders (Figure, Aven, Spring EQ) often quote at prime + 0% to prime + 0.5% for prime borrowers. Shop at least three lenders.
Negotiating Your Margin Down
Step 1: Get a written quote from at least one online lender (Figure, Aven, Spring EQ). They will often quote at prime + 0% to 0.5%. Step 2: Take that quote to your primary bank and ask them to match. Most banks will match a written competitor offer to keep the customer relationship.
Step 3: Ask about loyalty discounts. Many banks offer 0.25% off margin for direct deposit or auto-payment from a checking account at the same bank. Stack these to push your effective margin near zero.
Fixed Rate Conversion and Rate Caps
Most HELOCs include a Fixed-Rate Conversion (FRC) feature — you can convert a portion of the variable balance to a fixed rate at any time. This is valuable when prime rises. The fixed conversion rate is typically your current variable rate (prime + margin), locked in.
All HELOCs by federal regulation must have a lifetime rate cap (often 18%) and many include a 5% lifetime cap above the starting rate. See our HELOC fixed vs variable comparison for the conversion math.
Source: 12 CFR 226.30 (TILA HELOC cap rules)