What Your Homeowners Will Pay: Understanding Financing Rates
When homeowners apply for a loan to pay for your work, they see an Annual Percentage Rate (APR). This number tells them how much the loan will cost each year. If you’re selling financing to your clients, you need to understand rates so you can explain them clearly and close more jobs.
This guide breaks down what rates are, why they change, and what your homeowners should expect to see.
What Is An APR?
An APR is the yearly cost of a loan. It includes two things: interest charges and any fees the lender charges to process the loan (called “origination fees”).
Right now, rates through Hearth start at 6.99% APR. The rate your homeowner qualifies for depends on their credit score, income, and the loan amount they’re borrowing.
Think of it like this. If a homeowner borrows $10,000 at 8% APR, they’ll pay $800 in interest over one year. The actual payment each month is lower because they’re paying the loan down over time.
Two Types of Rates: Fixed and Variable
Fixed rates stay the same for the entire loan.
A homeowner sees a 7% APR when they apply. That’s the rate they pay every month for the next 5 years, no matter what happens in the economy. This is what most homeowners prefer because they know exactly what to expect.
Variable rates can change.
These rates go up or down based on what the economy is doing. Most homeowners don’t like variable rates because the payment might jump higher later on. With financing through Hearth, your homeowners typically see fixed rates, so they have predictability.
What Affects A Homeowner’s Rate?
Three main things determine the APR your homeowner sees.
1. Their Credit Profile
Every homeowner has a FICO credit score. It’s usually between 300 and 850. Higher scores get lower rates. Lower scores get higher rates.
But credit scores aren’t the whole story. Lenders also look at how much debt the homeowner already has compared to how much they earn (debt-to-income ratio), whether they have a job, and how recently they paid their bills on time.
A homeowner with a 720 FICO score might get a 7.5% rate. A homeowner with a 650 FICO score might get a 12% rate. The difference adds up fast over a 5-year loan.
2. Secured vs. Unsecured Loans
Unsecured loans don’t require the homeowner to pledge anything as collateral. Hearth offers unsecured personal loans. If the homeowner stops paying, the lender can’t take their house or their car. Because of this risk, unsecured loans have higher rates than secured loans.
Secured loans require collateral, like a second mortgage on the home. These loans have lower rates because the lender can seize the collateral if something goes wrong.
Most homeowners prefer unsecured loans because they don’t want to put their home at risk. That’s why unsecured financing is so popular for home improvement projects.
3. Who’s Paying For The Rate
If you use Buy-Down Financing, you pay fees to the lender to show your clients lower rates. You’re absorbing part of the cost.
If you use Profit Protection Financing (like Hearth offers), you’re not paying those fees. Your homeowners see the true market rate from the lender. The rate might be higher than what they’d see with buy-down financing, but you’re not losing money on the deal.
This is the key difference: with Profit Protection Financing, your margin stays strong, and your homeowners still get real financing options they can actually afford.
Why Rates Vary So Much
Here’s the truth: two homeowners can apply at the same time and see completely different rates.
Homeowner A has a 750 FICO score, stable income, and very little debt. They might see rates between 6.99% and 8.5%.
Homeowner B has a 650 FICO score, recently started a new job, and carries credit card debt. They might see rates between 12% and 18%.
Same financing offer. Completely different outcomes. This is why working with multiple lenders matters. The right lender for Homeowner A might reject Homeowner B. But with up to ~20 lending partners, both homeowners find an option.
How Hearth Uses AI To Get Better Rates
Hearth’s AI Financing technology gets homeowners in front of the right lenders. Instead of applying to one lender and hoping for the best, homeowners can see options from up to ~20 different lending partners.
This means they get to compare rates and pick the option that works best for them. And when homeowners have choices, they close faster. Contractors using Hearth’s AI Financing see 2X more loan applications get funded compared to traditional financing.
Hearth also uses AI to follow up automatically when a homeowner starts a loan application but doesn’t finish it. About 7 out of 10 homeowners abandon applications. With automatic follow-up, contractors fund about 50% more loans.
Personal Loans vs. HELOCs: Which Is Right For Your Homeowners?
Hearth offers two financing options: personal loans and Home Equity Lines of Credit (HELOCs). They work differently, have different rate ranges, and serve different homeowners.
Personal Loans Through Hearth
Personal loans are unsecured. No collateral required. Homeowners don’t put their house at risk.
| Credit Profile | APR Range | Loan Amount Range |
|---|---|---|
| Excellent (750+ FICO) | 6.99% to 9% | $5,000 to $250,000 |
| Good (700-749 FICO) | 8% to 12% | $5,000 to $100,000 |
| Fair (650-699 FICO) | 11% to 16% | $5,000 to $50,000 |
| Limited (below 650 FICO) | 14% to 21% | $5,000 to $25,000 |
Rates start at 6.99% APR for well-qualified borrowers. Loan terms typically range from 3 to 7 years, with options up to 20 years available for most well-qualified buyers.
Home Equity Lines of Credit (HELOCs)
HELOCs are secured by the homeowner’s house. Because the lender can take the home if something goes wrong, HELOCs usually have lower rates than personal loans.
| Requirement | Details |
|---|---|
| Minimum Credit Score | FICO score and VantageScore of at least 620 |
| Credit Limit Range | $5,000 to $400,000 |
| Collateral | Home equity required |
| Typical APR Range | 5.99% and up (typically 2% to 4% lower than personal loans) |
HELOCs are ideal for homeowners with significant equity in their home who want lower rates and higher borrowing limits. HELOC rates start at 5.99% APR and are typically 2% to 4% lower than unsecured personal loans.
0% Credit Cards
Some homeowners may qualify for promotional 0% APR credit cards, which offer zero interest for an introductory period (typically 6 to 18 months). After the promotional period ends, standard credit card rates apply.
| Requirement | Details |
|---|---|
| Minimum Credit Score | Typically requires 680+ FICO |
| Credit Limit Range | Typically below $15,000 (in line with current credit card limits) |
| APR | 0% during promotional period, then standard credit card rates (18%-25%+) |
| Best For | Smaller projects ($5,000-$15,000) that can be completed before interest kicks in |
0% credit cards work well for homeowners with excellent credit who need fast funding for smaller projects. However, if the balance isn’t paid off before the promotional period ends, interest rates jump significantly. Most contractors prefer personal loans or HELOCs because they offer predictable, fixed rates from day one.
Which Should You Recommend?
Recommend personal loans when:
- The homeowner doesn’t have significant home equity
- The homeowner doesn’t want to risk their home
- The project cost is under $50,000
- You need fast approval and funding
Recommend HELOCs when:
- The homeowner has strong home equity
- The homeowner wants the lowest possible rate
- The project cost is large (above $100,000)
- The homeowner qualifies (FICO 620+)
Most homeowners prefer personal loans because they don’t want to pledge their home. But contractors selling big projects (additions, full renovations, major structural work) often see HELOC rates win the deal.
Data Collection Notice: This financing information was collected by internal auditing in August 2026 and is subject to change. Rates and loan limits may vary based on lending partner criteria, market conditions, and individual applicant profiles. Always verify current terms with Hearth before discussing specific financing options with homeowners.
How To Talk About Rates With Homeowners
Here’s what to say when a homeowner asks about APR:
“Financing lets you spread the cost of this project into monthly payments instead of paying everything upfront. The APR is the yearly cost of borrowing that money. Rates start at 6.99% depending on your credit score and income. Most of my clients see rates somewhere between 7% and 16%. The best part? You get to see rates from lenders who actually want to work with you. You pick the option that fits your budget.”
That’s it. Simple. Clear. No jargon.
The Bottom Line
Rates are how lending partners make money. Higher risk borrowers pay higher rates. Lower risk borrowers pay lower rates. With Hearth, your homeowners see multiple rates from multiple lenders so they can choose the best one.
When you understand rates and explain them clearly to your homeowners, you close more jobs and build trust. Your clients see that you’re helping them find the best financing option, not just selling them the first thing that comes along.
Ready to start selling financing? Set up Harper and Hearth’s AI Financing to answer calls, follow up with leads, and turn more “maybes” into signed contracts.
Key Takeaway: Rates vary based on credit profile, loan type, and which lender approves the application. Homeowners with Hearth see options from up to ~20 lenders, so they always have a choice.
Legal Disclaimers
IMPORTANT: The information provided on this page is for educational purposes only and does not constitute financial, legal, or lending advice. All rates, terms, and loan limits are subject to change without notice.
Rates and APRs:Annual Percentage Rates (APRs) shown are estimates based on data collected by internal auditing in August 2026. Actual rates depend on multiple factors including but not limited to: credit score, debt-to-income ratio, employment history, loan amount, loan term, state of residence, and lender-specific underwriting criteria. Rates are subject to change at any time and may vary between lending partners.
Loan Approval:Not all homeowners will qualify for stated rates or loan amounts. All loans are subject to credit approval. Approval depends on lender evaluation of individual creditworthiness, income verification, and property value assessment.
Not a Loan Offer:This page does not constitute an offer to lend, credit approval, or a commitment to fund any loan. Homeowners must complete a formal application process with a lending partner to receive a specific rate quote.
Company Status:Hearth is a technology company licensed as a broker as may be required by state law. Hearth does not accept applications for credit, does not make loans, and does not make credit decisions. Hearth works with various lending partners to show customers available financing options. All loans are subject to credit approval by the lending partner.
Geographic Limitations:Hearth financing is available nationwide except in North Dakota and Vermont.
HELOC Disclosures:Home Equity Lines of Credit require a first or second mortgage lien on the property. The homeowner’s home is at risk if payments are not made on the HELOC. HELOC terms, rates, and credit limits vary by lending partner and individual circumstances.
No Warranty:The information on this page is provided “as is” without warranty of any kind, express or implied. Hearth makes no representation or warranty regarding the accuracy, completeness, or applicability of this information to any specific homeowner or situation.
Changes and Updates:All information is subject to change without notice. Rates, terms, loan limits, requirements, and lending partner participation may change at any time. This page was last updated in August 2026 based on internal audit data.
Contractor Responsibility:Contractors using this information to discuss financing with homeowners are responsible for ensuring all statements are accurate and compliant with applicable state and federal lending laws, including the Truth in Lending Act (TILA) and Regulation Z. Contractors should not make specific rate or approval promises to homeowners before formal application and underwriting.
Liability Limitation:To the fullest extent permitted by law, Hearth shall not be liable for any indirect, incidental, special, consequential, or punitive damages resulting from reliance on or use of information provided on this page, including but not limited to lost revenue, lost profits, or business interruption.
For current rates and terms, visit gethearth.com or contact a Hearth specialist. For specific questions about a homeowner’s eligibility or rate, have them complete a pre-qualification or formal application with one of Hearth’s lending partners.
