HSBC: 2024 Home Equity Review

Benefits

• HSBC Bank’s HELOCs come with a lower introductory variable APR for the first 12 months, then a higher variable rate based on creditworthiness, existing relationship with the bank, state of residence and other factors. The bank doesn’t charge an application or annual fee, but you might be responsible for some fees if you cancel your account early.
• HSBC allows you to convert some or all of your HELOC balance to a fixed-rate loan, up to three times. Doing this locks in your interest rate, protecting your budget from potential future rate increases.

Drawbacks

• HSBC Bank’s HELOC is only available to customers who already have acceptable balances, direct deposits or a mortgage with the bank.
• You can request a call from an HSBC loan officer online, but there’s no option to apply on your own through the bank’s website.

Home equity loan products offered

HSBC Bank offers HELOCs to banking customers, namely those with a U.S. Premier relationship. The bank doesn’t provide fixed-rate home equity loans, although there’s an option to convert your HELOC balance to a fixed rate. (You can do this up to three times, and repayment terms range from five years to 20 years.)

With the HELOC, you can access a credit line of up to $500,000 depending on your situation. You’ll start with an introductory variable APR for one year, then another variable APR kicks in for the remainder of the draw period and repayment term.

You’ll have two payment options: principal and interest, or interest-only. With the former, you’ll pay principal and interest during both the draw and repayment terms. With the latter, you’ll make interest-only payments during the draw period (in other words, lower payments), then pay principal and interest during the repayment term.

Types of fees charged

You won’t pay an application fee or annual fee for an HSBC HELOC, and the bank covers the closing costs on the line of credit unless you close your account within three years. (If you do, you’ll be responsible for a $500 or $750 fee, depending on where you live, plus any taxes.)

Notably, HSBC offers discounts on HELOC interest rates: a 0.25 percent reduction if you draw at least $25,000 at closing; and a 0.25 percent reduction if you set up automatic payments as a Premier checking customer.

How to qualify for a HELOC with HSBC Bank

HSBC Bank evaluates your credit score, debt-to-income (DTI) ratio, employment, income and property-related information to determine eligibility for a HELOC.

Importantly, you’ll also need to have a banking relationship to qualify, either: at least $75,000 in deposits and/or investments; at least $5,000 in direct deposits a month; or a mortgage for $500,000 or more.

How to apply with HSBC Bank

You can’t apply for an HSBC HELOC online, but you can start the process through the bank’s website by providing some information. A loan officer will then reach out to you to continue the process. If you have questions, you can call 844-472-2684 (844-HSBC-MTG) or utilize the bank’s live chat feature.

How Bankrate scored HSBC Bank

• 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.