The Wealth Builder HELOC is a variable-rate product. Your interest rate is calculated as the 30-day SOFR index plus a lender margin. Understanding both components helps you evaluate the rate and anticipate how it may change over time.

What Is SOFR?

SOFR stands for Secured Overnight Financing Rate. It is a benchmark interest rate published daily by the Federal Reserve Bank of New York, based on overnight transactions in the U.S. Treasury repurchase market. SOFR replaced LIBOR as the primary benchmark for adjustable-rate financial products in the United States.

The 30-day average SOFR is a smoothed version of the daily rate, calculated as a compounded average over the prior 30 days. This makes it slightly more stable than the overnight rate and is the specific index used by the Wealth Builder HELOC.

What Is the Margin?

The margin is the fixed spread added to SOFR to determine your note rate. For the Wealth Builder HELOC, margins typically range from approximately 2.50% to 4.00% depending on FICO, LTV, occupancy, and loan amount. The margin is set at origination and does not change for the life of the loan.

How the Rate Is Calculated

Your rate on any given day = 30-day average SOFR + your margin. For example, if SOFR is 4.30% and your margin is 2.95%, your rate is 7.25%. As SOFR rises or falls, your rate adjusts accordingly — typically on a monthly basis.

Rate Caps

The Wealth Builder HELOC includes periodic and lifetime rate caps to limit how much your rate can increase. Review the program disclosures with your Lendia advisor for the specific cap structure on your loan.