Fixed-Rate Advance on a Home Equity Line of Credit

Lock a rate for a set period with a fixed-rate advance

Switch all or part of your balance to a fixed rate. If your needs change and you want a variable rate, easily convert it back.

The fixed-rate advance is a feature of your Wells Fargo home equity line of credit. This option lets you enjoy the benefits of your line of credit and the ability to lock an interest rate on your balance for terms of 1 - 20 years.,

A fixed interest rate, as opposed to the variable rate on your home equity line of credit, can be important in certain financial situations. The fixed-rate advance may be a good option if:

  • You want to have fixed monthly payments.
  • You're worried about rising interest rates.
  • You want to repay your entire balance during a set term (for longer terms only).

Without a fixed-rate advance, your home equity line of credit balance is charged the current variable rate. With the fixed-rate advance option, you can convert any or all of that balance, with a minimum of $10,000, to a fixed rate for a set term. Your fixed interest rate, and thus your monthly payments, are calculated differently and may be higher than payments at your variable rate. When your fixed-rate advance term ends, any unpaid balance reverts back to the current variable rate.

You can get a fixed-rate advance:

  • At closing, when you originate your home equity line of credit
  • After closing, any time during the draw period

Whether you take an advance at closing or afterwards, you can convert your existing fixed-rate advance back to a variable rate at any point during your draw period. The ability to return to a variable rate may be helpful in certain situations — for example, if the current market rate is lower than the rate on your fixed-rate advance.

You can take 2 fixed-rate advances per year and can have up to 3 at any given time. The minimum amount for an advance is $10,000.

Let's say you have a $50,000 line of credit and you want to take a fixed-rate advance of $25,000 to pay for a kitchen remodel. The terms of your advance will determine your monthly payments, but you can be sure they won't change during that set period, even if the variable rate goes up. You'll still have access to the unused portion of your line of credit to help cover any other repairs or major expenses.

As you pay down the fixed-rate advances, the principal portion of those payments is made available for you to use again.

Graphic representing a $50,000 line of credit. A fixed-rate advance of $25,000 for kitchen remodel is shown on the left. $25,000 available funds, replenished as you pay down the fixed-rate advance, is shown on the right.

The terms of your fixed-rate advance (FRA) will determine your monthly payment and whether you have an unpaid balance when the term ends.

Fixed-rate advances can be either fully amortizing or partially amortizing. Fully amortizing terms, which are typically longer terms, will repay your entire balance during the FRA term. Partially amortizing terms, which are shorter terms, will have a remaining balance after the term that will revert back to the current variable rate.

Longer terms — 5 -20 years

  • May have higher monthly payments.
  • Will repay your entire FRA balance during the FRA term.
  • For longer terms that finish after draw period ends, FRA payments will continue until the FRA balance is paid in full at the end of the term.

Shorter terms — 1-5 years

  • May have lower monthly payments.
  • Partially repays your FRA balance during the FRA term.
  • Shorter FRA terms must end at least 1 month before your end of draw.

You can make additional principal payments at any time without penalty. This may help you pay off your balance faster or decrease any unpaid balance. It also may result in less interest paid over time.

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Draw period

The length of time during which you can access funds from your account.