Frequent flier miles, cashback bonuses and other rewards have long been a tool used by credit card companies to get consumers to use their credit cards.

Home equity lenders are getting into reward programs as well. With housing appreciation slowing and interest rates up, consumer demand for variable rate HELOCs has dropped. Lenders are responding with various forms of rewards to both retain current customers and attract new borrowers.

Here’s a rundown of some of the reward deals out there as reported in the Wall Street Journal (April 27. 2006):

Wells Fargo - has cut the rate on its HELOCs and home equity loans for customers who also have a Wells Fargo checking account;

PNC - $25 gift card for new home equity customers;

US Bancorp - gives borrowers a lower rate the longer they maintain their HELOC (.25% for every 6 months until the rate reaches prime -1.00%;

National City - gives bonus points that can be redeemed for gift cards and other things to new home equity customers and customers who access their HELOC with a credit card.

The overall message is that lenders are eager to maintain home equity borrowing levels. According to Equifax, HELOC balances have grown 71% in the last two years to $543.2 billion. Further, the default rate on these loans is extremey low making them especially attractive to lenders.

If you’re looking for a new HELOC (or have one already), don’t be shy about letting lenders know you are aware of the deals being offered. They are eager to get (or maintain) your buisiness and may be willing to match any offer you bring forward.