Bank of America Home Equity Overview
Expert Take
Through Bank of America, homeowners can borrow up to $1 million against the equity in their home with no annual fee, application fee or closing costs. There are also several discounts available, with additional savings for Bank of America Preferred Rewards® members. However, Bank of America charges a $450 early closure fee, and you must visit a Bank of America branch to complete the closing process.
Pros
- Several discounts available
- Online HELOC payment calculator
- No fees or closing costs on HELOCs up to $1 million
Cons
- Must close at a Bank of America financial center
- Some benefits are only available to Bank of America Preferred Rewards® members
- Early closure fee when you pay off the HELOC in three years or less
Vault’s Viewpoint on Bank of America
If you’re looking for a HELOC with low fees, our Bank of America home equity review will show you why we think this offering is a good option. There is no fee to apply for a HELOC at Bank of America, and the bank covers closing costs on lines of credit up to $1 million. There’s also no annual fee for the lifetime of your HELOC.
One of our favorite things about Bank of America is that it offers discounts that can help you get a more favorable interest rate. When you make an initial withdrawal after opening an account, you can get a 0.10% interest rate discount for every $10,000 withdrawn, with a maximum discount of 1.50%. You can save an additional 0.25% when you enroll in automatic monthly payments from a Bank of America checking or savings account.
While anyone can qualify for a BofA home equity line of credit, certain benefits are only available to Bank of America customers. For example, Bank of America Preferred Rewards® members can qualify for a special discount of up to 0.625%.
One of the cons of Bank of America is that it charges an early closure fee on lines of credit that exceed $25,000. It may not be the best option for homeowners who plan to pay off their HELOC quickly. And because you’re required to close at a Bank of America branch, you should make sure there’s a location near you before you apply. If you don’t live near a Bank of America branch, you should probably consider a different HELOC provider.
About Bank of America
Bank of America is one of the oldest financial institutions in the U.S. It was established in 1906 in San Francisco under the name Bank of Italy. The company was renamed Bank of America in 1930. Currently, Bank of America is the second-largest bank in the country, with roughly $2.4 trillion in assets and more than 3,700 branch locations.
Bank of America offers a wide variety of financial solutions, including bank accounts, credit cards, loans, financial planning services and investments through its wealth management division, Merrill. The company also offers online and mobile banking where customers can manage accounts, make payments and access member benefits.
| Loan amount | $15,000 to $1 million |
| Fees | Early closure fee is $450 |
| Minimum credit score | Not disclosed |
| Repayment schedule | 20 years |
| Funding speed | Not disclosed |
| APR | 6.99% variable APR for six months, then 10.22% (for New York) |
| Loan availability | 50 states and Washington D.C. |
| Newsweek Vault Review | https://www.newsweek.com/vault/banking/bank-of-america-review/ |
Who Is Bank of America Best For?
Bank of America is an excellent HELOC provider for people who are already Bank of America clients. Here’s why: Bank of America Preferred Rewards® members can take advantage of special discounts for a lower interest rate. Plus, Bank of America’s online and mobile banking features make it simple to manage all of your accounts and loans in a single interface.
A home equity line of credit from Bank of America can also be a good pick for homeowners who want a HELOC with low fees. Bank of America doesn’t charge closing costs. Also, there is no application fee or annual fee. However, there is an early closure fee if you pay back the line of credit before 36 months.
Who Should Consider an Alternative to Bank of America?
If you need a HELOC for fast cash and intend to pay it back early, Bank of America probably isn’t the best financial institution for you. Bank of America charges a $450 early closure fee if you pay back the line of credit within 36 months of opening the account. You’re better off getting a HELOC from a bank that doesn’t charge a prepayment penalty fee.
You might also consider a Bank of America alternative if you don’t live near a Bank of America branch. The bank requires borrowers to complete the HELOC closing process at a Bank of America location. If there’s not a branch in your area, it could delay closing and affect how long it takes to get your money.
How Does Bank of America Stack Up to Its Competitors?
If you’re shopping around for a HELOC, compare Bank of America HELOC reviews against several different banks before you open an account. See how Bank of America’s HELOC offering stands up to some of its biggest competitors.
Bank of America vs Third Federal Savings
Third Federal Savings provides some of the lowest HELOC interest rates on the market. Under the Lowest Rate Guarantee program, the bank will beat the lowest interest rate you find or give you a $1,000 credit. Like Bank of America, Third Federal Savings has no closing costs.
Third Federal Savings also has no prepayment penalties. You can pay back your line of credit early, or make extra payments, and you won’t be charged a fee. This makes Third Federal Savings a better option for homeowners who expect to pay back their HELOC ahead of schedule.
Additionally, Third Federal Savings has a 30-year repayment period, whereas Bank of America’s repayment period is 20 years. That can be beneficial for homeowners who need extra time to pay back the money they borrow.
However, Third Federal Savings only offers HELOCs in 24 states and Washington D.C. To compare, Bank of America offers HELOCs in all 50 states.
Bank of America vs Figure
Figure Lending operates entirely online, which means you can apply for a HELOC, get approved and receive the money without ever visiting a physical bank branch. Unlike Bank of America, Figure only provides fixed-rate HELOCs, which provide funding in as little as five days.
Figure can be a good option for homeowners who need to borrow a significant amount of money. You can borrow up to $400,000 (with a one-time origination fee) and pay it back over 30 years. With Bank of America, you can borrow up to $1 million, but the repayment period is only 20 years, which means you could have higher monthly payments.
There are a few ways to get a lower APR through Figure. However, the discounts aren’t as generous as what Bank of America offers. Figure gives a 0.25% discount to customers who enroll in automatic payments and a 0.30% discount for credit union members.
Another downside of Figure is that you can’t see average rates in your area online. To find your estimated APR, you must go through the entire application process. With Bank of America, you’re able to see the average APR in your state. That makes it easier to compare rates before applying.
Bank of America vs Connexus
Connexus is a credit union that offers HELOCs with competitive interest rates. Connexus is offering HELOCs with a 5.99% APR until April 1, 2025, after which you’ll have an 8.74% APR. The monthly payment is 1.5% of the amount borrowed, with a $25 minimum.
Connexus allows you to borrow up to 90% of your home’s equity with a 15-year draw period and a 15-year repayment period. The minimum loan size is $5,000, which makes it a good pick for homeowners who only need to borrow a small amount of money. For comparison, Bank of America’s minimum loan amount is $25,000, which might be too much for some people.
Connexus has fixed-rate and interest-only HELOCs. Visit the website to see average rates and apply for a loan in just a few minutes. Within 24 hours of applying, a representative will reach out to start the process and answer any questions. You don’t need to visit a physical branch at any point like you do with Bank of America.
A downside of Connexus is that you must become a member of the credit union to open a HELOC. And unlike Bank of America, Connexus credit union members don’t get access to any special benefits or discounts.
Frequently Asked Questions
What Are Bank of America’s HELOC Rates?
BofA HELOC rates vary depending on location. For California, the current variable APR is 6.99% for the first six months and 9.90% after the introductory period. In Florida, the introductory APR is the same (6.99%) but increases to 10.15% after the introductory period. These rates are subject to change at any time. To get an estimated interest rate and monthly payment for your home, you can use Bank of America’s online HELOC calculator.
Can I Get a Bank of America HELOC on a Second Home?
Bank of America offers HELOCs on second homes and vacation homes. However, the maximum loan amount for second homes is only $500,000, which is lower than the maximum loan size for primary residences ($1 million). If you want to get a HELOC on a second home, you will need to make sure the property qualifies. For example, many banks don’t offer HELOCs on mobile homes or multi-unit properties.
Does a Bank of America HELOC Require a Hard Credit Pull?
Bank of America runs a hard credit check when you apply for a line of credit. It uses your credit history to determine your eligibility and the APR of your loan. A hard credit inquiry will cause your credit score to drop slightly. However, it should rebound after a short period. Borrowers with excellent credit get the most favorable interest rates, though it still may be possible to get a home equity loan with bad credit.
