HELOCs and home equity loans give Vermont homeowners practical ways to use their home’s value for large expenses and big projects. The right choice comes down to how you plan to borrow, repay, and manage changing rates. Comparing home equity loans and HELOC rates from Green Mountain State lenders is the most direct way to put that equity to work without giving up your existing mortgage rate.
MFP’s Takeaways
- Vermont leads the entire nation for equity-rich homes, with 87% of mortgaged properties holding loan balances at or below half their estimated market value; the highest share of any state by a wide margin.
- The statewide median sale price reached approximately $385,000 at year-end 2025, up nearly 6% year over year, while the Chittenden County region reached a single-family median of $500,000, giving long-term owners some of the largest equity positions in New England.
- Vermont is an equitable property state, meaning both spouses must consent to a HELOC or home equity loan if the home is jointly owned, a legal requirement worth knowing before you begin the application process.
Home Equity in Vermont
Vermont home values have risen steadily for years. The Vermont Market Report puts the statewide median sale price at approximately $385,000 at year-end 2025, a nearly 6% gain over 2024. Single-family homes in the five-county northwest region reached a median of $500,000, while the Vermont Housing Finance Agency reported the primary residence statewide median rising roughly 5% in 2025, reaching around $370,000 by mid-year.
Vermont’s equity position is exceptional. ATTOM data ranks Vermont 1st nationally, with 87% of mortgaged homes classified as equity-rich. Only 0.7% of Vermont mortgaged homes are seriously underwater — the lowest rate in the country. This combination of high equity and near-zero distress gives Vermont homeowners an unusually strong borrowing position.
Vermont’s housing supply remains structurally constrained. The state has approximately 15% of its housing stock classified as seasonal or vacation properties, which limits year-round inventory and keeps upward pressure on prices in recreation-oriented towns. About 51,000 homes are seasonal, competing with year-round residents for a small available pool of properties.
Burlington and Chittenden County
Burlington is Vermont’s largest city and its most competitive real estate market. Chittenden County’s overall median sale price hovers around $539,000, with the single-family median reaching $500,000 in the five-county northwest region. The University of Vermont, a strong healthcare sector, and consistent in-migration anchor demand and support long-term home value growth for established owners.
Stowe, Killington, and Mountain Towns
Vermont’s ski towns carry some of the highest home values in the state, driven by vacation home demand from buyers across New England and beyond. Lamoille County, which includes Stowe, carries a median around $500,000. Long-term owners in ski communities hold exceptional equity, though seasonal property classifications can affect how lenders assess borrowing capacity.
Montpelier, Barre, and Central Vermont
Vermont’s capital region offers more accessible price points than Burlington or the ski towns, but still reflects years of steady appreciation. The area’s state government employment base and proximity to outdoor recreation support consistent housing demand, and long-term owners carry solid equity positions relative to their remaining mortgage balances.
Rutland and Southern Vermont
Rutland and the surrounding Champlain Valley offer some of Vermont’s most affordable markets. Homeowners who purchased at these lower price points several years ago often hold strong loan-to-value ratios that make qualifying for home equity products straightforward, even in a modestly priced market.
Home Equity Loans vs. HELOCs
Home Equity Loan
A home equity loan delivers a lump sum at a fixed interest rate, repaid in equal monthly installments over a set term. It works best when you have a defined expense and want a payment that stays the same from the first month through the last.
HELOC
A home equity line of credit (HELOC) gives you a revolving credit line secured by your home. You draw from it as needed during the draw period and pay interest only on what you use. Rates are typically variable and tied to the prime rate. Vermont credit unions commonly structure HELOCs with 10-year draw periods followed by repayment phases of 5 to 15 years.
Side-by-Side Comparison
| Feature | Home Equity Loan | HELOC |
|---|---|---|
| Disbursement | Lump sum upfront | Draw as needed |
| Interest rate | Fixed | Variable |
| Monthly payment | Fixed | Based on balance drawn |
| Best for | Known, one-time expenses | Ongoing or phased needs |
| Typical term | 5 to 20 years | 10-year draw + repayment phase |
| Rate risk | None after closing | Rate can rise with prime rate |
Vermont Home Equity Rates –
| 10 year fixed rates | Credit Score | ||
|---|---|---|---|
| 720 - 850 | 690 - 719 | 620 - 689 | |
| Nationally | 7.70% | 7.75% | 7.80% |
| Vermont | 7.72% | 7.77% | 7.82% |
| Credit Unions | 7.37% | 7.42% | 7.47% |
| Online lenders | 7.57% | 7.62% | 7.67% |
| Banks | 7.72% | 7.77% | 7.82% |
| 5 year fixed | 7.68% | 7.73% | 7.77% |
| 10 year fixed | 7.70% | 7.75% | 7.80% |
| 15 year fixed | 7.56% | 7.61% | 7.66% |
| 20 year fixed | 8.02% | 8.08% | 8.12% |
Source: MFP’s Community Home Equity Loan Rates Survey members in the last 30 days.
Vermont HELOC Rates –
| HELOC rates | Credit Score | ||
|---|---|---|---|
| 720 - 850 | 690 - 719 | 620 - 689 | |
| Nationally | 7.30% | 7.55% | 7.80% |
| Vermont | 7.32% | 7.57% | 7.82% |
| Credit Unions | 7.07% | 7.32% | 7.57% |
| Online lenders | 7.17% | 7.42% | 7.67% |
| Banks | 7.32% | 7.57% | 7.82% |
Source: MFP’s Community HELOC Rates Survey members in the last 30 days.
Qualifying for a Home Equity Product in Vermont
Vermont lenders apply standard underwriting criteria for home equity products. Meeting these benchmarks gives you the best position for approval and a competitive rate.
- Credit score of 620 or higher, with the best rates typically reserved for scores above 680.
- Combined loan-to-value (CLTV) ratio at or below 80% to 90% after the new loan, depending on the lender.
- Verifiable income and a stable employment history.
- Debt-to-income (DTI) ratio below 43%.
- Minimum of 15% to 20% equity remaining in the home after closing.
Vermont is an equitable property state, which means both spouses must consent to any loan secured by a jointly owned home. If you and a partner own your property together, both parties will need to sign the home equity loan or HELOC application and closing documents.
Vermont uses a judicial foreclosure process, meaning any lender foreclosure must proceed through the courts if a borrower defaults. This gives homeowners more time to respond than in non-judicial states, but does not eliminate the risk of losing your home if a default goes unresolved. Closing costs on Vermont home equity products typically range from $219 to $1,500 depending on whether an appraisal is required, so confirm the full cost structure with each lender before applying.
Smart Uses for Home Equity in Vermont
Vermont’s aging housing stock and demanding winters create consistent home maintenance needs. Many homeowners use a home equity loan to fund roof replacements, heating system upgrades, window and insulation improvements, or weatherization projects that reduce energy costs and protect property value through New England’s harshest seasons.
Debt consolidation is one of the most financially sound uses for home equity. Rolling high-interest credit card balances or personal loan debt into a fixed-rate home equity loan reduces total interest paid each month and simplifies repayment into a single predictable payment.
In ski towns and coastal Champlain Valley communities, some homeowners use a HELOC to fund renovations that improve short-term rental performance. Vermont’s tourism economy is consistent year-round — ski season in winter, foliage and hiking season in fall, and lake access in summer — making a well-upgraded property in a desirable location a reliable source of rental income that can offset the carrying cost of the equity product over time.
Risks to Understand Before You Borrow
Both a home equity loan and a HELOC use your home as collateral. Vermont’s judicial foreclosure process provides more time than non-judicial states if payments are missed, but protecting your home means keeping these payments current with the same priority as your primary mortgage.
HELOCs carry variable rates that move with the prime rate, meaning your monthly cost can rise during both the draw and repayment phases. Some Vermont lenders offer HELOC structures where monthly payments include principal from day one — rather than interest only — which reduces the payment jump at the end of the draw period. Ask each lender how payments are calculated during the draw phase before committing.
Alternatives worth comparing:
Is a Home Equity Loan or HELOC Right for You?
Do you have a single defined expense that fits a fixed lump-sum loan, or do you need a flexible credit line to draw from in phases as costs arrive over months or years?
If your home is jointly owned, have both you and your co-owner agreed to proceed, and have you confirmed your current equity position and closing cost estimates with at least two Vermont lenders before applying?
MFP Tip: Vermont’s local credit unions offer competitive rates with personalized service and decisions made by people who know the Vermont market. Vermont Federal CU is a $1 billion-plus institution open to anyone who lives or works in Vermont, Heritage Family CU offers a 24-month promotional rate with principal-inclusive payments from the start, and NorthCountry FCU serves northern Vermont with both fixed-rate loans and HELOCs.
More resources for Vermont homeowners: