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The short answer
Never compare HELOCs on the advertised rate alone. Three things determine the real cost: (1) the APR vs. the intro rate — many lenders advertise a low 6-month intro rate (as low as 3.99%) while the ongoing APR is 7–8.65%; compare ongoing APRs, not intros; (2) draw period vs. repayment period — typically 10 years of draw followed by 15–20 years of repayment, and your payment can triple when the draw period ends; (3) fees — annual fees ($50–$75), early-termination fees (up to $500 if closed within 2–3 years), and minimum-draw requirements all change the math.
APR vs. intro rate: the trap
HELOC advertising leads with the lowest number — which is almost always a temporary introductory rate:
- Intro rates we've seen advertised in Massachusetts: as low as 3.99% for the first 6 billing cycles, 5.24% for 12 months.
- Ongoing APRs on those same products: 7.00%–8.65% once the intro expires.
- The intro rate applies only to the initial draw or a limited window — not to the life of the line.
Compare the ongoing APR, usually disclosed as "APR after introductory period" in the fine print. That's the rate you'll pay for most of the line's life.
Draw period vs. repayment period
A HELOC has two phases, and the payment shock between them catches borrowers off guard:
| Phase | Typical length | What you pay |
|---|---|---|
| Draw period | 10 years | Interest-only on what you've drawn (sometimes minimum $50–$100) |
| Repayment period | 15–20 years | Principal + interest amortized — no more draws |
Example: $50,000 drawn at 7.5% APR. During the 10-year draw period: ~$313/month interest-only. When repayment hits: ~$463/month principal + interest over 15 years — a 48% payment jump. Lenders must disclose this, but it's buried. Ask for the repayment-period payment in writing before you sign.
Some HELOCs offer interest-only options during repayment or fixed-rate lock features (convert part of the balance to a fixed rate). These vary widely — compare them as separate features, not as rate differences.
The fees that change the math
- Annual fee: $0–$75/year. Waived the first year at many lenders, then charged. Over 10 years, a $75 fee adds $750.
- Early termination / closure fee: $300–$500 if you close the line within 2–3 years. If you might sell or refinance soon, this matters.
- Minimum initial draw: some lenders require $10,000–$25,000 drawn at closing to get the advertised rate. If you only need $5,000, you're paying interest on money you didn't want.
- Inactivity fee: a few lenders charge if you don't maintain a minimum balance.
- Appraisal / application fees: many Massachusetts lenders advertise "$0 closing costs" — verify what that covers. Some absorb appraisal; others charge $300–$600.
Variable rate mechanics: margin + index
HELOCs are variable-rate. Your APR = index + margin:
- Index is usually the Wall Street Journal Prime Rate (7.50% as of October 2026).
- Margin is the lender's markup — this is what actually differs between lenders. A 0.50% margin vs. a 1.50% margin is a full point of APR difference, forever.
- Rate caps limit how high it can go: periodic caps (max increase per adjustment, often 2%) and lifetime caps (max over the starting rate, often 5–6%).
Compare margins, not just today's APR. Two HELOCs at 7.50% today can diverge sharply if one has a 0% margin and the other has 1% — when Prime moves, so does the gap.
Methodology and limitations
HELOC rates, margins, caps, and fees are lender-specific and change frequently; figures cited reflect Massachusetts lender pages verified in October 2026. Intro-rate examples are as advertised — always confirm the ongoing APR and its effective date. Prime Rate as cited is the WSJ Prime Rate. This guide is educational, not a recommendation of any product.
Reviewed by the LoanMate.ai editorial team.
Primary sources
- Consumer Financial Protection Bureau (CFPB): "What you should know about home equity lines of credit" (HELOC Booklet)
- Federal Reserve Board: HELOC disclosure requirements (Regulation Z)
Next action
See today's Massachusetts HELOC rates → — compare ongoing APRs, margins, and fees side by side. Then estimate your payments →.