When the Federal Reserve decided to leave short-term interest rates unchanged last Wednesday, consumers with floating-rate home equity lines avoided a pinprick of pain they've gotten used to: Steadily higher monthly payments on their outstanding balances in the wake of 17 Federal Reserve rate bumps.

The average home equity credit line now carries an interest rate close to the bank prime -- 8.25 percent, according to new survey data from the Consumer Bankers Association. Many equity line borrowers have seen their rates nearly double in the past two years, leading large numbers of them to simply bail out of their floating-rate notes.

Some consumers have managed to pay off their balances by doing cash-out refinancings, essentially moving their floating-rate debt onto a new first mortgage at a fixed rate. But cash-out refis usually mean replacing a low-rate first mortgage with a larger first carrying a higher interest rate.

But major home equity lenders are now offering another alternative: Don't throw away that precious 5.50 or 5.75 percent first mortgage that you got during the refi boom years of 2003 and 2004. Keep it intact and convert your floating-rate credit line into one or more "baskets" or sub-accounts with attractive fixed rates at zero cost. It's the hottest, but least known, trend underway in the home equity field, say bankers.

Annapolis, Maryland homeowner Andy Hallmark accidentally bumped into the trend recently when monthly costs on his $70,000 floating-rate credit line got uncomfortably high. He and his wife assumed they'd have to bail out of the line and refinance their first mortgage.

But before doing that, the Hallmarks decided to try something different. They called up their lender and asked an improbable question: Could we possibly transform our credit line into a fixed-rate note and get some peace of mind about future rate increases?

"We were totally shocked," said Hallmark, "when (the bank) said 'sure, no problem.' We had figured there was no way they would let us do it."

Not only did the bank say yes, it also said there'd be no fees, no closing costs, and the new fixed rate would be in the mid-7 percent range, well below the bank's floating rate of 8.25 percent.

The Hallmarks' discovery could have been duplicated at other large home equity lenders. According to banking industry experts, lenders have had to scramble to change their multi-trillion dollar products to avoid mass payoffs of balances triggered by rising short-term rates. Most home equity lines are tied to prime -- typically anywhere from prime plus one percent to prime minus one quarter or one-half percent.

Rather than lose customers in droves, major banks like JPMorgan Chase, Citibank, Wachovia and Wells Fargo now offer zero-cost conversion plans turning floating-rate credit lines into fixed-rate second mortgages.

Citibank and Chase offer another twist: You can chop your credit line balance into as many as five sub-accounts or "baskets" with different terms and rates, at no cost anytime you want.

"It really turns your line of credit in a one-stop-shop financial instrument," says Brad Conner, president of Chase Home Equity. For example, say you've got a $100,000 credit line at 8.25 percent and you're planning a home improvement project and are concerned about future rate increases. You could lock the rate on $50,000 of the $100,000 at a favorable fixed rate for 10 years. The bank would charge you zero to do the transaction. A year later, you might want to fix another $30,000 for a five-year term to buy a boat. The remaining $30,000 you might reserve for a floating-rate "basket" just in case rates drop or you need quick cash.