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A Home Equity Line of Credit (HELOC) allows homeowners to borrow against the equity in their homes, offering flexibility similar to a credit card with the benefit of lower interest rates. In Arizona’s dynamic real estate market, HELOCs are a popular choice for funding home improvements, consolidating debt, or covering unexpected expenses.
Current HELOC Rates in Arizona
As of June 2025, HELOC rates in Arizona vary based on lender, credit score, loan-to-value ratio, and other factors. Here’s a snapshot of current offerings:
- Arizona Bank & Trust: Introductory 6-month rate at 2.99% APR, adjusting to as low as 7.50% APR thereafter.
- Desert Financial Credit Union: Competitive rates with a maximum loan-to-value (LTV) of 80%.
- Arizona Central Credit Union: Borrow up to 85% of your home’s value with low, variable interest rates.
- PenFed Credit Union: Offers interest-only payments during the 10-year draw period.
Factors Influencing HELOC Rates
Several elements can affect the interest rates and terms of a HELOC:
- Credit Score: Higher scores often qualify for lower rates.
- Loan-to-Value Ratio (LTV): Lower LTV ratios can lead to better rates.
- Income and Debt Levels: Stable income and lower debt enhance eligibility.
- Property Value: Higher home values increase potential borrowing limits.
How to Choose the Right HELOC
When shopping for a HELOC in Arizona:
- Compare Rates: Look beyond introductory offers to understand long-term costs.
- Understand Terms: Know the draw and repayment periods, and whether payments are interest-only or include principal.
- Assess Fees: Be aware of annual fees, closing costs, and potential penalties.
- Evaluate Flexibility: Some lenders allow you to lock in fixed rates on portions of your balance.
FAQs
What is the typical draw period for a HELOC?
Most HELOCs have a draw period of 5 to 10 years, during which you can borrow funds up to your credit limit.
Can I deduct HELOC interest on my taxes?
Interest may be tax-deductible if the funds are used for home improvements. Consult a tax advisor for specifics.
What happens after the draw period ends?
You enter the repayment period, typically 10 to 20 years, where you repay both principal and interest.
Read Next
- HELOC Requirements for Real Estate Investors in 2025: Updated Guide
- How to Combine HELOCs and DSCR Loans for Maximum Leverage
Unlock Your Home Equity with Figure
- 100% online application—no in-person appraisal needed
- Pre-qualify in minutes; funding in as few as 5 days
- Borrow up to $400,000 with flexible terms
- Soft credit check—no impact on your score
Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
