Bank of America: 2024 Home Equity Review

Benefits

• Bank of America doesn’t charge HELOC application or annual fees, and it covers the closing costs on lines of up to $1 million. There are also rate discounts available if you set up auto-payment, and preferred customers can receive additional discounts ranging from 0.125 percent to 0.375 percent.
• At opening, you can convert a portion of your HELOC to a fixed-rate loan if you withdraw at least $5,000 and no more than 90 percent of the maximum line amount. You can also convert all or a portion of your balance to a fixed-rate option during the loan term. All of this can be done without an additional fee.

Drawbacks

• If you close your HELOC account within three years, you’ll pay a $450 fee and any closing fees Bank of America paid on your behalf.
• The bank’s minimum line amount is $25,000; you’re not required to draw this amount, but you won’t be approved if your home doesn’t have sufficient equity.

Home equity loan products offered

Bank of America offers home equity lines of credit (HELOCs) with a minimum line amount of $25,000 (with $15,000 in some locations) and a maximum line amount of $1 million. The HELOCs have a 10-year draw period and a 20-year repayment period.

You also have the option to convert part of your variable-rate HELOC to a fixed-rate loan at opening if you draw at least $5,000 (but no more than 90 percent of your line). You can decide to convert a portion of your HELOC balance (minimum $5,000) to a fixed-rate loan during the loan term, as well. There’s no charge for the conversion, and you can have up to three fixed-rate loans at one time. The loan term can range from one year up to the account maturity date.

While the APR on a fixed-rate loan might be higher, it does give you the option to pay both interest and principal in predictable and fixed payments. That certainty allows you to better budget your money, as you’ll never have to guess the monthly payment amount or face higher payments if rates rise.

Types of fees charged

If you get a Bank of America HELOC, you won’t pay any application fee, closing costs or annual fees. There are also no fees if you choose to convert your HELOC to a fixed-rate loan. The only fee charged is an early termination fee of $450 if you close your account within three years. You’ll also be on the hook for any closing fees Bank of America paid on your behalf.

Bank of America offers discounts for setting up autopay, making initial withdrawals and being a Preferred Rewards client. If you set up automatic payments for your HELOC with a bank checking or savings account, you’ll receive a 0.25 percent discount. If you make a withdrawal when you open your account, you’ll receive a 0.10 percent discount for each $10,000 withdrawn, up to a maximum of 1.50 percent.

If you’re a Preferred Rewards client, you’ll receive a discount ranging from 0.125 percent to 0.625 percent depending on your tier. Check out the Bank of America website or speak to a Preferred Rewards specialist to learn more about this program.

How to qualify for a HELOC with Bank of America

Bank of America doesn’t disclose its minimum credit score requirement for a HELOC until you get in contact. Your APR will depend on your credit score, loan amount, work history, monthly income and monthly debts, property value and location.

How to apply with Bank of America

You can apply for a HELOC with Bank of America in person at a branch location, online or by phone at 800-779-3894. It takes about 15 minutes to submit the application online. Bank of America’s customer service team is available Monday through Friday, 8 a.m. to 10 p.m. ET or Saturday from 8 a.m. to 6:30 p.m. ET.

How Bankrate scored Bank of America

• Methodology

  To determine a home equity lender's Bankrate Score, Bankrate rates lenders on a scale of one (1) to five (5) stars — with five (5) the highest rating — based on a variety of factors relating to the lender's products and services. To assign our ratings, we assessed each mortgage lender across three core areas:

  • Affordability: Annual percentage rate (APR) - 80%; introductory APR - 20%
  • Availability: Licensing - 50%; credit score - 20%; loan minimum - 10%; draw requirement - 10%; loan products - 10% 
  • Borrower experience: Rate transparency - 45%; convenience - 35%; customer service - 10%; fixed-rate options - 10%

  Learn more about our methodology.