Fixed vs. Variable Rate HELOC

[Clare Yuritch]

Hello! We are relative newbies to investing with one duplex property acquired last year, but our initial investment was conidered successful and now we're looking to scale up! We do have savings to tap into, but also wanted to consider a HELOC to give us some flexibility for the future (my husband and I are both financial advisors - so we know the do's and don'ts on this topic! Even with a HELOC we have a comfortable debt-to-income ratio). We have an option through PenFed for a 30 year credit line at 90% LTV (about $275k) with either variable 4.75% or fixed 5.5%. I'm leaning towards the fixed - I appreciate the predictable nature better and with interst rates on the rise. At current rate differential, which I think will just narrow over time, at the maximum (unlikely) loan amout it would cost us a maximum of $2k extra / year. I dont think interest rates will be lower than they are now, so more likely the gap between the variable and fixed shrinks, and over the long term, variable could be higher than the fixed rate. Any thoughts on this?