PNC Home Equity Review

PNC offers A home equity line of credit (HELOC) called the Choice Home Equity Line of Credit, or CHELOC. To help consumers choose the best option to utilize their home equity, we assessed the bank’s pricing, offerings, customer experience and accessibility.

A HELOC is a form of credit that allows homeowners to borrow funds against their home's equity. Like a credit card, you get access to a credit line, and you can borrow the funds you need whenever you need them.

Unlike a credit card you can only borrow funds during a fixed period known as the draw period. Although you can repay at any time, once the draw period is over you enter the repayment period. With a HELOC you only have to pay interest on the amount borrowed. This differs from a traditional home equity loan, cash-out refinance or personal loan where you receive a lump sum.

PNC home equity pros and cons

Pros explained

Borrowers can switch between variable and fixed rates

Unfortunately, you are at the mercy of the economy when it comes to interest rates. If rates are high when you take out a HELOC, your monthly payment can increase significantly.

One of the pros of choosing a line of credit through PNC is that you can transfer any portion of your variable-rate balance to a fixed interest rate, as long as the amount is $5,000 or more. This allows you to watch the market and lock in your rate for a portion of your loan.

One of the pros of choosing a line of credit through PNC is that you can transfer any portion of your variable-rate balance to a fixed interest rate, as long as the loan amount is $5,000 or more. This allows you to watch the market and lock in your rate for a portion of your loan.

0.25% rate discount available with autopay on a PNC checking account

If you have a PNC bank account and automate your payments, you receive a 0.25% rate discount on your home equity line of credit. The benefit is available after the introductory period and is forfeited if you cancel automatic payments.

No minimum draw amount

A HELOC draw period is the time period during which you can borrow money from your credit line. With a PNC CHELOC, the draw period is 10 years. Every time you use money from your line of credit, it's considered a draw. PNC doesn’t require you to draw a specific amount each time you need money. Some banks have a minimum draw amount, but PNC allows you to borrow anywhere from $1 all the way up to your credit limit.

This is where a line of credit differs from a home equity loan. When you take out a home equity loan, you receive the entire lump sum upfront. A line of credit allows you to borrow a little at a time, so you only pay interest on what you’ve spent.

Cons explained

Not available in all states

PNC Bank only offers HELOC services in 44 states. Additionally, the repayment terms vary from state to state.

In Tennessee, Massachusetts, Minnesota, Kansas and Connecticut, you can borrow up to 85% of the value of your home. In Wyoming, Washington, Vermont, Utah, Texas, Rhode Island, Oregon, Oklahoma, New Hampshire, Nebraska, North Dakota, Montana, Maine, Idaho, Iowa, Colorado and Arkansas, you can borrow up to 80% of your home’s value.

Consumers in South Dakota, Nevada, Mississippi, Louisiana, Hawaii and Alaska are ineligible for HELOCs from PNC Bank. Those in all other states can borrow up to 89.9% of their home’s market value.

Only offers HELOCs

PNC Bank doesn’t offer home equity loans, only HELOCs. This means you can’t get the entire lump sum of your home equity upfront.

A HELOC is a good option if you need a revolving credit line, or if you want to have access to emergency money that you don’t need urgently.

However, you may prefer to have a home equity product that you pay back in fixed installments. Consumers opt for home equity loans sometimes because the interest may be tax deductible, all the proceeds are available at closing and origination fees are often waived.

$100 fee when switching between fixed and variable rates and $50 annual fee

After origination, PNC imposes a $100 transfer fee every time you switch between fixed and variable rates. This applies when going from a variable to a fixed rate lock, and when you unlock a fixed rate to a variable. This fee is significant and will add up if you plan to use this benefit frequently. There is also a $50 annual fee.

PNC home equity offerings

PNC Bank offers a fixed-rate home equity line of credit and a variable-rate home equity line of credit. We'll discuss these below.

Variable-rate home equity line of credit

If you opt for a variable rate on your HELOC, your monthly payment and interest rate vary depending on the financial market. The benefit of a variable rate is that you can save significant amounts of money when interest rates are low. However, you will have to be comfortable with a level of uncertainty regarding how much your rates will be.

Fixed-rate home equity line of credit

The mortgage lender also offers a fixed-rate HELOC. A fixed-rate home equity line of credit provides a stable monthly payment and a rate that won’t change even in a volatile market. Because PNC allows you to transfer portions of your variable-rate loan to a fixed-rate one, you can benefit from the flexibility of choosing to lock in favorable rates when you want.

PNC home equity pricing

There is a $50 annual charge from PNC for a HELOC, and a $100 transfer fee every time you switch your rate type. Other than that, PNC covers the cost for a long list of closing costs, including property appraisals and recording fees. These are one-time fees due when you open your line of credit.

However, you are required to pay those third-party fees back if you close your account in less than three years. This amount is prorated, so if you are 30 months into the 36-month introductory period when you close your account, you only pay for the equivalent of six months in third-party fees.

There is also a $7 fee if you pay your loan over the phone with an agent, although this rule only applies in some states.

If your HELOC is used to make home renovations, for medical purposes, or to improve the energy efficiency of your home, you may use it as a tax deduction.

In addition to market rates, your particular interest rate will also depend on a number of factors including your credit score and credit history. PNC doesn't disclose its minimum credit score to qualify for a HELOC, so you should contact the bank to determine if you qualify for a home equity loan with bad credit.

PNC home equity financial stability

PNC has stable earnings and solid credit quality, earning an A+ rating from the credit rating agency Fitch.

NMLS ID #446303

PNC home equity accessibility

Availability

PNC Bank offers HELOCs in 44 states. The only states that are ineligible for a home equity line of credit are Nevada, South Dakota, Mississippi, Hawaii, Alaska and Louisiana.

PNC Bank has more than 2,500 physical locations throughout the country, although these physical branches are only in 23 states. If you need to visit a branch, the bank offers a locator tool.

Contact information

PNC Bank hours for customer support are Monday through Friday from 8 a.m. to 9 p.m. and Saturday through Sunday from 8 a.m. to 5 p.m. EST. You can reach a representative in the mortgage department when you call 1-800-822-5626.

There is no live chat feature on PNC's website, but the bank has an active Twitter account that assists with customer service.

User experience

You can apply online, on the phone, or in person if there's a loan officer in your area to discuss borrowing options. After a HELOC is approved, the bank transfers the money right into the user’s checking account. Users can then access their account information digitally 24/7.

PNC home equity customer satisfaction

PNC has an A+ Better Business Bureau rating but isn’t accredited by the organization. Online reviews skew negatively — reviewers on BBB's website give the bank 1.1 out of 5 stars — but are comparable to other banks of the same size.

Most PNC customer complaints revolve around the customer service representative’s inability to solve problems — many reviewers mentioned having to contact higher-level executives to get the answers they needed. Positive reviews praise the HELOC lender for its many customer service options, strong mobile money management tools and 24-hour overdraft grace period.

How we evaluated PNC home equity

We evaluated PNC’s HELOC offerings by researching the following factors:

• Availability
• Fees and additional costs
• Available rate options
• Accessibility
• User experience
• Financial stability

Summary of Money’s PNC home equity review

A home equity line of credit allows you to access the equity you have in your current home without selling it. HELOCs are often used for home improvements, to pay off additional debts or to cover an unexpected expense. The amount you can borrow is based on how much equity is in your home. When you take out a HELOC, you leverage the equity in your home, and you can lose it if you default on the loan.

PNC Bank is unique in that it offers a customizable rate option. This option can save you money in the long run, even with the $100 transfer fee every time you switch your interest rate type. If you pay with a checking account from PNC Bank, you also get a reduction on your interest rate. There is no minimum draw amount on a HELOC with PNC Bank.

Money is available quickly with PNC Bank, and fees are minimal. Loan-to-value amounts differ from state to state, but in the best-case scenario, you can borrow up to 89.9% of your home’s value.

However, PNC doesn't offer home equity loan products, and there are six states where PNC does not offer HELOCs. Those who prefer a home equity loan or need a lump sum payment won’t find what they need with PNC.