Michigan HELOC Rates and Rules 2026: Taxes and Proposal A

HELOC rates in Michigan right now

Most HELOCs have a variable rate based on the prime rate plus a margin set by the lender. Your margin depends mostly on your credit and how much of your home's value you borrow.

In 2025, the median HELOC in Michigan opened at 7.74%, and half opened between 7.24% and 8.50%, across 33,001 lines reported under federal HMDA data. The national median was 7.50%. Leaving out lines with a 3 to 12 month introductory rate, the Michigan median was 7.75%. Home equity loans in Michigan, which usually have a fixed rate, closed at a median of 8.49%. HELOC rates in every state.

Prime rate, unchanged since September 17, 2026 (Federal Reserve): 7.00%
Median Michigan HELOC rate at opening, 2025 (HMDA): 7.74%
Average 30-year fixed mortgage rate, week of October 29, 2026 (Freddie Mac): 7.24%

The Federal Reserve raised rates on September 16, 2026, which moved prime to 7.00%. Its October 27 and 28 meeting is more recent than the prime rate data shown here, which runs through October 27, 2026. Its next meeting is December 8 and 9. With 30-year mortgage rates above 7%, a HELOC lets you borrow against your equity without refinancing a lower rate you already have.

How much can you borrow in Michigan?

Michigan law doesn't set a home equity borrowing cap. Each lender sets its own limit on all the loans on your home combined, your current mortgage plus the new line.

Michigan owners have a lot to work with: 73.5% of households own their home, and 43.5% of those owners have no mortgage at all.

Home value ×80% −what you owe now =a likely maximum line

Example

Home value (the Michigan median for owner-occupied homes): $254,200
80% of value (a common lender limit, not a Michigan law): $203,360
Current mortgage balance: $140,000
Maximum line of credit: $63,360

Example only. Lenders set their own limits and the final amount after an appraisal, and many approve less than the maximum based on credit and income.

Run your own numbers in our home equity calculator

Michigan home prices more than doubled from 2014 to 2025

On the FHFA House Price Index, Michigan home prices rose 126% from 2014 to 2025, with the biggest jumps in 2021 (+15.4%) and 2022 (+11.0%). Prices kept climbing after that: up 5.3% in 2025 and 3.80% in the year to mid-2026, 14th of the 50 states and DC.

Source: FHFA House Price Index, Michigan, purchase-only, through 2026 Q2.

Chart data as a table

Michigan House Price Index, annual average (1991 = 100)
Year	Index (1991 = 100)
2014	169.92
2015	179.72
2016	190.77
2017	205.16
2018	220.26
2019	232.77
2020	250.94
2021	289.54
2022	321.34
2023	341.19
2024	364.76
2025	384.00

The Michigan rules that affect a HELOC, in plain English

Michigan has no special HELOC limits like a borrowing cap or a waiting period. These Michigan laws still shape your HELOC. They come from the Michigan Compiled Laws and the State Tax Commission, summarized here in plain words.

Your property taxes

A HELOC doesn't uncap your taxes.: Under Proposal A, your taxable value resets to the full assessed level only after a sale or other transfer of ownership. Michigan law says a transfer for security, like a mortgage or HELOC, is not a transfer of ownership.
2.7% cap for 2026.: Taxable value can rise each year by inflation or 5%, whichever is less. For 2026 the State Tax Commission set that at 2.7%.
Principal residence exemption.: The home you live in can be exempt from up to 18 mills of local school operating tax. File the affidavit with your city or township by June 1 (summer tax) or November 1 (winter tax).

Taxes and licensing

No transfer tax on a HELOC.: Michigan's state and county real estate transfer taxes both exempt documents given as security for a loan. The state tax falls on deeds and sale contracts, and the seller owes it.
Use a licensed lender.: Michigan requires mortgage lenders to be licensed or registered unless an exception applies. A HELOC behind an existing mortgage counts as a secondary mortgage loan, which has its own license under the Secondary Mortgage Loan Act.

If you can't pay

Foreclosure by advertisement.: When the mortgage includes a power of sale, a Michigan lender can foreclose without a court case, by advertising a sale.
4 weeks of notice.: The sale has to be advertised once a week for 4 weeks in a local newspaper, and a copy posted on the home within 15 days of the first ad.
Time to buy it back.: After the sale you can redeem the home for 6 months if you owed more than two-thirds of the original loan when the foreclosure notice went out, otherwise for 1 year. It is much shorter if the home is abandoned.

Michigan homeowners by the numbers

Median value of an owner-occupied Michigan home: $254,200; U.S.: $360,600
Michigan homeowners with no mortgage at all: 43.5%; U.S.: 40.3%
Michigan households that own their home: 73.5%; U.S.: 65.3%
Median yearly property tax paid in Michigan: $2,988; U.S.: $3,211

Source: U.S. Census Bureau, American Community Survey 2024 1-year estimates.

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Frequently asked questions

Will a HELOC uncap my Michigan property taxes?

No. Taxable value uncaps after a transfer of ownership, and Michigan law says a transfer for security, like a mortgage or HELOC, is not one.

Is there a transfer tax or mortgage tax on a Michigan HELOC?

There is no transfer tax on it. Michigan's state and county transfer taxes exempt documents given as security for a loan.

Does my HELOC lender need a Michigan license?

Yes, unless an exception applies. A HELOC behind an existing mortgage is a secondary mortgage loan, and those lenders are licensed under the Secondary Mortgage Loan Act.

What happens if I can't pay a Michigan HELOC?

When the mortgage includes a power of sale, the lender can foreclose by advertisement after 4 weeks of newspaper notice. After the sale you usually have 6 months or 1 year to redeem the home.

How much have Michigan home prices risen?

On the FHFA House Price Index, Michigan prices rose 3.80% in the year to mid-2026 and 38.8% over 5 years. From 2014 to 2025 they rose 126%.

How much can Michigan property taxes go up in 2026?

If you didn't buy or transfer the home, taxable value can rise by at most 2.7% for 2026, plus any additions such as new construction.

Does checking my options with LenderMatch affect my credit?

No. LenderMatch never pulls your credit. A lender you choose to work with may check it, with your permission.

HELOCs in Michigan: how much you can borrow and the state rules that apply

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