A fixed rate HELOC is a home equity line of credit
with an interest rate that a lender cannot increase or decrease during the term of the agreement. Fixed rate HELOCs are growing in popularity, but most HELOCs only offer variable rates, which fluctuate with baseline rates set by the Federal Reserve Board. A hybrid HELOC
, also called a convertible HELOC, typically lets you convert HELOC debt into a fixed rate loan, often for a fee. That prevents rate fluctuations on what you already owe but not on what you might borrow going forward.
Note: Many lenders consider “hybrid HELOC” and “convertible HELOC” to be synonymous with fixed rate HELOC, so be sure to clarify how a lender uses the terminology.