Chase Brings Back Its Home Equity Line of Credit: Is It a Good Deal?
By Staff Reporter, August 26, 2025
After a five-year hiatus prompted by the economic fallout of the COVID-19 pandemic, JPMorgan Chase & Co. has reintroduced its Home Equity Line of Credit (HELOC) program, announced on August 25, 2025. The move comes as homeowners with low-rate first mortgages seek alternatives to cash-out refinances, but is Chase’s new HELOC a good deal? With unique terms and conditions, the offering has sparked debate among financial analysts and homeowners alike. Here’s a breakdown of the deal’s features, benefits, and potential drawbacks to help you decide.
Key Features of Chase’s HELOC
Chase’s revived HELOC program offers loan amounts ranging from $25,000 to $400,000, with a maximum combined loan-to-value (CLTV) ratio of 80%. For example, if your home is appraised at $500,000 with a $350,000 first mortgage, you could borrow up to $50,000. A standout requirement is the mandatory initial draw of 85% of the approved credit line at closing—meaning a $100,000 HELOC requires an upfront withdrawal of at least $85,000. The draw period lasts three years, during which you can access the remaining 15% as needed, followed by a repayment period of up to 27 years.
The HELOC features variable interest rates tied to the prime rate, which moves with the Federal Reserve’s federal funds rate. As of August 20, 2025, the national average HELOC rate is 8.12%, though Chase’s specific rates are not publicly detailed beyond historical ranges from 2018 (5.25% to 7.64% APR for lines of $50,000–$500,000). The lifetime APR is capped at 21%, which could become costly if rates rise. Borrowers face an origination fee of up to 4.99% of the credit limit (e.g., $2,495 on a $50,000 line at 4.99%), though no annual fee is charged—a plus compared to some competitors. Customers with a Chase Premier, Premier Plus, or Premier Platinum checking account can waive the $50 annual fee (where applicable) and may qualify for rate discounts of 0.25% to 0.50%.
The Pros: Flexibility and Strategic Timing
Chase’s HELOC offers notable advantages. Its return aligns with a shifting economic landscape, as the Federal Reserve began cutting rates in 2024, potentially lowering variable HELOC rates into 2025. This makes it appealing for homeowners unwilling to refinance low-rate first mortgages (often secured at 3–4% during the pandemic) to access home equity. The three-year draw period provides flexibility for ongoing expenses like home renovations, debt consolidation, or education costs, with interest-only payments on the drawn amount during this phase. The absence of an annual fee and potential rate discounts for Chase banking customers add value, especially for those already integrated into the Chase ecosystem.
The program’s availability in 47 states (excluding Alaska, Hawaii, and South Carolina) and loan sizes up to $400,000 cater to a wide range of homeowners. Additionally, interest paid on HELOC funds used for home improvements may be tax-deductible, though borrowers should consult a tax professional to confirm eligibility.
The Cons: High Upfront Costs and Risks
However, Chase’s HELOC has significant drawbacks. The mandatory 85% initial draw is a major sticking point, forcing borrowers to take out and pay interest on a large sum upfront, even if they don’t need it immediately. For example, a $100,000 HELOC requires borrowing $85,000 at closing, accruing interest from day one. This contrasts with competitors like Bank of America or Figure, which allow more flexible withdrawals, some as low as 0% initially. The origination fee, potentially as high as 4.99%, adds to upfront costs—on a $50,000 line, this could mean $2,495, compared to lenders like Figure, which waive closing costs but charge an origination fee rolled into the loan.
The variable interest rate, while potentially benefiting from Fed rate cuts, carries risk. If the prime rate rises, monthly payments could increase significantly, especially during the repayment period when principal and interest are due. The 21% APR cap is high, making the HELOC potentially expensive over time. Additionally, the short three-year draw period is less generous than the industry standard of 10 years offered by lenders like Bank of America, limiting long-term flexibility. As with all HELOCs, the home serves as collateral, meaning defaulting risks foreclosure—a critical consideration given the high initial draw requirement.
Comparison to Alternatives
Compared to other lenders, Chase’s HELOC has unique constraints. Bank of America offers a 10-year draw period, up to 85% CLTV, and a 0.25% autopay discount, with no mandatory initial draw. Figure provides a fully digital application, fixed-rate options, and funds in as little as five days, though it requires full withdrawal at origination. U.S. Bank, with rates starting at 7.44% (as of May 2025), offers interest-only HELOCs and fixed-rate lock options without a mandatory draw. These alternatives may better suit borrowers seeking lower upfront costs or more flexible terms.
A cash-out refinance, another Chase offering, provides a lump sum but involves replacing your existing mortgage, often at a higher rate (currently around 7% versus HELOCs at 8.12%). For homeowners with low-rate mortgages, the HELOC is likely a better option to preserve those rates, though closing costs of 2–5% apply to refinances.
Is It a Good Deal?
Whether Chase’s HELOC is a good deal depends on your financial needs and discipline. It’s best suited for homeowners needing a large, immediate sum—say, for a major renovation—and who can manage the mandatory 85% draw without overborrowing. The lack of an annual fee and potential rate discounts are attractive, especially for existing Chase customers, and declining Fed rates could keep payments manageable. However, the high origination fee, short draw period, and forced initial draw make it less appealing for those wanting a safety-net credit line or smaller, sporadic withdrawals. The risk of foreclosure and variable rate fluctuations further caution careful budgeting.
Analyst Alessandro Simonelli, commenting on home equity trends, noted, “HELOCs offer flexibility but come with risks like over-borrowing that can erode net worth.” Posts on X reflect mixed sentiment, with some users warning against tapping home equity recklessly, citing rising payments in volatile markets. For comparison, shopping around is crucial—lenders like U.S. Bank or Figure may offer lower rates or fewer upfront costs, depending on your credit profile (ideally a 720+ score and 80% or lower CLTV).
Final Verdict
Chase’s HELOC is a strategic option for specific needs but not a one-size-fits-all solution. If you’re planning a significant expense and can handle the upfront draw and fees, it’s worth considering, especially with potential rate cuts on the horizon. However, for flexibility or lower costs, explore competitors or consult a Chase Home Lending Advisor to confirm availability in your state and personalize terms. Always assess your repayment ability to avoid risking your home.
For more details, visit Chase’s HELOC page or compare rates at Bankrate.
If you’d like a chart comparing Chase’s HELOC rates or terms to competitors, or if you want me to analyze specific financial scenarios (e.g., monthly payments for a $50,000 line), let me know! I can also check for updated rate information or public sentiment on X if you’re curious about real-time reactions.