Why a Home Equity Line of Credit (HELOC) is Still a Good Option

A miniature white house with a red roof sitting on a table with a plant, calculator and stacks of coins.

Did you know that using the equity in your home to secure a loan or line of credit may provide many advantages and substantial savings to homeowners?

Many people don’t realize that interest rates on home equity secured loans and home equity lines of credit (HELOCs) tend to be substantially lower than those on credit cards and store charge cards. We often see members who have equity in their properties and also carry large balances on their credit card accounts month-to-month. Moving these balances to home equity financing can save hundreds or even thousands of dollars in interest each year.

HELOCs provide significant flexibility. At Hawaii State FCU, we offer HELOCs with the option to set a pre-defined pay-back term for separate balances within your line of credit, with each term customized to your needs and to fit your financial goals. For example, a substantial home remodel can be scheduled to be paid off after 10 years, an auto purchase scheduled for 7 years, and consolidated credit cards balances scheduled for 3 years. Plus, we offer fixed rates for these separately scheduled balances, so that you know exactly what your payment will be for the entire term, making it easier to budget. Our members also enjoy the benefits of competitive rates, lower “floor” interest rates, low closing costs, and no annual fee1.

Setting up a HELOC secured by the equity in your property can also be substantially easier and less expensive than refinancing your entire existing mortgage balance into a new mortgage to obtain funds when you need them. Unlike a traditional “cash out” refinance mortgage, with a line of credit, you have the flexibility of borrowing only the amount you need and when you need it, which allows you to avoid paying interest when funds are not needed. We even offer home equity lines secured by second homes and investment properties.

Learn more about our HELOCs by scheduling an appointment to speak with one of our financial specialists today, or visit www.HawaiiStateFCU.com for more information.


Watch Our HINow video featuring Victor Brock.

HINow video with Victor Brock


Related Blog: Home Equity Financing FAQs


1 HELOC Program: 80% Combined Loan to Value, fee-simple, owner-occupied HELOC, up to $250,000 credit line. Introductory Rates: 0.75% APR* (1-year), 1.49% APR* (2 year), 1.99% APR* (3-year), 2.49% APR* (4-year), 2.99% APR* (5-year); Current Variable Index Rate: 3.75% APR**.

* The 1-year, 2-year, 3-year, 4-year, and 5-year HELOC Introductory Rates are valid for applications received commencing 5/1/2024 and may change at any time without notice. An initial draw of at least $5,000 and automatic payments from a Hawaii State FCU checking account are required. Otherwise the applicable Current Variable Index Rate will apply. After the Introductory period expires, your rate will vary and the applicable Current Variable Index Rate will apply. This offer applies to new Home Equity Lines of Credit for applicants with a VantageScore credit score of 690 or greater. For line amounts >$250,000, offer applies only to line in subordinate lien position. Refinancing of existing Hawaii State FCU Home Equity Lines of Credit is not allowed. If you elect the 1-year, 2-year, 3-year, 4-year, or 5-year Introductory Rate, it will remain in effect until expiration of the Introductory Rate period.

** The Current Variable Index Rate is based on the Prime Rate plus a margin. Your margin will depend on creditworthiness. The Current Variable Index Rate shown is current as of 5/1/2024 and will not exceed 18% APR. The minimum Current Variable Index Rate is 3.75% for 80% LTV Fee-Simple Owner-Occupied Property up to $250,000 line amount.

Only improved residential property in Hawaii is accepted as collateral. Property insurance is required. The credit union waives closing costs for certain third party fees (e.g. real estate evaluation, recordation, documentation, title insurance, escrow, flood determination), estimated between $260 to $2,000 for line amounts up to $250,000. You will be required to pay other closing costs involving trust review, other legal documentation, or appraisal cost, estimated at $250 to $1,950. For line amounts greater than $250,000, the credit union waives closing costs for certain third party fees (e.g. recordation, documentation, escrow, flood determination) estimated between $50 and $600. You will be required to pay other closing costs for appraisal, title insurance, trust review, or other legal documentation estimated between $1,600 and $3,800. The borrower is required to reimburse the credit union for all waived fees if the credit line account is paid off and closed within three (3) years of its opening.

Membership in the credit union is required. Hawaii residency required for new accounts.

Victor Brock SVP Consumer and Mortgage Lending

About Victor Brock

Victor Brock is senior vice president of the consumer and mortgage lending division at Hawaii State FCU. He manages the process, pricing, product offerings and servicing of all consumer and mortgage loans to the credit union’s members. Victor has been working in the banking industry since 1985, and has over 30 years of experience in consumer and mortgage lending. He received his Master of Business Administration from San Diego State University and his bachelor’s degree in business from the University of Minnesota, Minneapolis.

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