Has anybody heard of a heloc product the bank offers that allows you to get a line of credit and then change it to a fixed rate, like an equity loan, at any time for a small charge ($250) or take the line of credit and make it fixed at the start (no charge) and have the capability of changing it back to a variable rate? Please explain if this is good for the customer or the bank. Thanks.

Sally:

I have not heard of this product, but I am sure there are many lenders that offer something like that.

I would think that the benefit is to the bank unless you could lock-in the fixed rate at which you will be able to convert. However, I suspect that this rate is also floating. Then again, one needs to know what the floating rate is based on and what the fixed rate will be based on, and if there are any premiums involved.

In order to determine the benefits you would need to know the terms of the original line. You need to know if any of these terms change with the rate change.

When banks release a product, a few people have run some tests on its profitability under several scenarios. Changes in rates still affect profitability, but not like before.