California HELOC Margins: Why Two Lenders Can Be 0.75% Apart

California HELOC Margins: Why Two Lenders Can Be 0.75% Apart

A HELOC rate is not just Prime. It’s Prime + margin, and that margin is where lenders compete. In California, margin differences of 0.25%–0.75% are common—especially on larger lines or higher CLTVs.

What Moves the Margin

1. Credit Tier – 760+ usually qualifies for the best margin.
2. CLTV – Higher combined loan-to-value means higher risk and a wider margin.
3. Property Type – Condos and rentals often carry higher margins.
4. Line Size – Large lines sometimes qualify for discounts, but not always.

How to Compare Margins Correctly

• Ask the lender for the margin in writing.
• Compare margins across similar CLTV tiers.
• Request life-of-loan caps and annual adjustment limits.

A Simple California Example

• Lender A: Prime + 0.25%
• Lender B: Prime + 0.75%

On a $100K line, that’s roughly $500+ per year difference when Prime is 8.5%.

Bottom Line

If you only compare the starting rate, you’ll miss the real pricing. Compare margins and caps and you’ll make a smarter decision in California’s variable-rate environment.