To help you make an informed decision, we at the MarketWatch Guides team analyzed 14 top lenders and consulted financial experts to help you find the best interest rates, minimize fees and access flexible loan terms.
Our top providers offer minimum annual percentage rates (APRs) between 6.74% and 10.25% — lower than credit cards and on par with personal loans. To help you find the right product for yourneeds, our picks are categorized by tailored benefits such as “best for large loans,” which permits loan amounts up to $750,000 or more, and “best for maximum equity,” which allows you to borrow up to 90% of your home’s equity without added fees.
In a recent survey we conducted, 16% of the 1,500 home equity loan customers who responded wished they would have compared more lenders, and 63% accepted an interest rate that was too high.
1– of Results
Best For High Debt-to-Income Ratio Borrowers
Rocket Mortgage
3.8
Max. Loan Amount $500,000
Max. LTV Ratio 90%
Min. Credit Score 680
APR % N/A
Apply Now On Rocket Mortgage’s Website
No monthly payments, interest or added debts
Unlock
4.4
Max. Loan Amount $500,000
Max. LTV Ratio 80%
Min. Credit Score 500
APR % N/A
Apply Now On Unlock’s Website
Best for Fast Funding
Figure
4.3
Max. Loan Amount $400,000
Max. LTV Ratio 95%
Min. Credit Score 640
APR % N/A
Apply Now On Figure’s Website
No Interest or Monthly Payments
Hometap Home Equity Investment
4.0
Max. Loan Amount $600,000
Max. LTV Ratio 75%
Min. Credit Score 500
APR % N/A
Apply Now On Hometap’s Website
Best for Rate Transparency
TD Bank
4.3
Max. Loan Amount $500,000
Max. LTV Ratio 89.9%
Min. Credit Score 660
APR % 7.89%
Apply Now On TD Bank’s Website
Best Credit Union Loan
Navy Federal Credit Union
4.9
Max. Loan Amount $500,000
Max. LTV Ratio 100%
Min. Credit Score 650
APR % 7.34%
Apply Now On Navy Federal’s Website
Best Fixed Rate Option
Bethpage Federal Credit Union
4.7
Max. Loan Amount $500,000
Max. LTV Ratio 65%
Min. Credit Score 720
APR % 6.99%
Apply Now On Bethpage’s Website
Best For Large Loan Amounts
U.S. Bank
4.6
Max. Loan Amount $1,000,000
Max. LTV Ratio 80%
Min. Credit Score 660
APR % 7.65%
Apply Now On U.S. Bank’s Website
Unfortunately, we didn’t find any offers for you.
Learn more about how toqualify for home equity loans here.
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Our Best Home Equity Loan Rates of September 2024
We chose these companies based on our methodology that uses a comprehensive 100-point scoring system using factors that are most important to consumers such as fees, terms, rates, disclosures and customer service.
| Provider | Minimum Loan Rate APR | Best For |
|---|---|---|
| Navy Federal | 7.34% | Best credit union loan |
| Bethpage | 6.99% | Best HELOC conversion loan |
| U.S. Bank | 7.65% | Best for large loans |
| Rocket Mortgage | Not disclosed | Best for customer satisfaction |
| Spring EQ | 7.83% | Best for fast funding |
| Discover | 7.99% | Best for borrowers with little home equity |
| TD Bank | 7.89% | Best for rate transparency |
| 7.29% | Best for good credit | |
| Connexus Credit Union | 7.56% | Best for small loans |
| America First Credit Union | 7.24% | Best for maximum equity |
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Navy Federal Credit Union Home Equity Loan
Best Credit Union Loan
4.9
Minimum APR7.34%Max LTV100%Minimum Credit Score650
| Loan Term | 5 to 40 years |
| Closing Costs | No |
| Annual Fees | No |
| Discounts | Not disclosed |
| Fixed-rate options available | Yes |
| Average closing speed | 45 to 55 days |
| Availability | Open to anyone who qualifies for a Navy Federal membership |
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Why We Like It
Navy Federal Credit Union is one of the only lenders on our list that offers both home equity loans and home equity lines of credit — though not everyone can become a member and apply. Its loans have no closing costs and a high loan-to-value (LTV) ratio — you can borrow up to 100% of your home’s value for home equity loans and 95% for HELOCs. However, you do need to become a member to qualify — and membershipis only open to military servicemembers and their families.
This makes Navy Federal a good choice for military members and their families who are looking to use their home’s equity to finance expenses like home renovations or consolidate high-interest debt.
The absence of application and origination fees saves borrowers a lot of money upfront if they choose Navy Federal. Plus, because it’s a credit union, Navy Federal emphasizes personal guidance throughout the loan application and closing process. This adds a level of convenience and support not always found with traditional mortgage lenders.
Pros and Cons
Pros Little to no fees Competitive interest rates, often below the national average Navy Federal services the loan for its full duration. Has some of the highest LTV ratios in the industry 24/7 support available Cons You or an immediate family member must be affiliated with the military to join. Longer closing time compared to online lenders Maximum loan limit is lower than most other lenders on this list.
What Reviewer Say About Navy Federal Credit Union
Most Praised Features
Customer service: Some reviewers complimented Navy Federal’s friendly and helpful customer service.
Interest rates and loan process: Many reviewers appreciated Navy Federal’s competitive interest rates for loans and mortgages.
Digital services: Some reviewers enjoyed the convenience of the user-friendly mobile app and online services.
Most Common Complaints
Customer service inconsistency: A number of complaints mentioned poor customer service, with some customers complaining about inconsistent service and others mentioning unresponsiveness or poor communication.
Account and loan management: Some reviews mentioned issues with account and loan management, such as having trouble processing payments.
We reached out to Navy Federal Credit Union for comment on its negative customer reviews but did not receive a response.
*To provide these insights, we compiled and analyzed 7,488 reviews from user-review sites such as Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
Bethpage Federal Credit Union
BEST HELOC CONVERSION LOAN
4.7
Minimum APR6.99% Max LTV80%Minimum Credit ScoreNot Disclosed
| Loan Term | Up to 30 years |
| Closing Costs | No |
| Annual Fees | No |
| Discounts | Not disclosed |
| Fixed-rate options available | Yes |
| Average closing speed | 34 days |
| Availability | Nationwide |
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Why We Like It
Bethpage Federal Credit Union is a good home equity loan lender for fixed-rate options. As a member-owned credit union, it strives to provide better rates and lower fees than traditional banks. Its HELOCs have no closing costs or origination fees, and lines up to $500,000 come with fixed rates for the first 12 months.
To establish membership, you’ll need to open a Bethpage savings account with a minimum $5 deposit. Then, you can receive your loan funds.
Pros and Cons
Pros Competitive rates and flexible terms No appraisal fee, application fee or closing costs Fixed-rate options available Cons Membership required to get a loan Longer closing time compared to online lenders Must repay the closing costs that Bethpage covers for you if you close your loan within 36 months of opening
What Reviewers Say About Bethpage Federal Credit Union
Most Praised Features
Customer service: Many reviewers were happy with the exceptional customer service they received from BFCU.
Personalized attention: Personal and attentive service was mentioned frequently in positive reviews for Bethpage.
Most Common Complaints
Inconsistent or poor communication: Some reviewers mentioned communication issues, such as difficulty getting in touch with customer service and a lack of follow-up.
Technical issues with online services: A number of reviews pointed out technical issues with the online features, such as trouble accessing their accounts.
We reached out to Bethpage Federal Credit Union for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
U.S. Bank
BEST FOR LARGE LOANS
4.6
Minimum APR7.65%Max LTV80%Minimum Credit Score660
| Loan Term | Up to 30 years |
| Closing Costs | No |
| Annual Fees | Yes |
| Discounts | Yes |
| Fixed-rate options available | Yes |
| Average closing speed | Not disclosed |
| Availability | May not be available in some states |
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Why We Like It
U.S. Bank offers competitive home equity loan rates for current customers, making it a solid option if you’re willing to switch banks. It provides both home equity loans and HELOCs with terms that cater to various financial needs.
To get a good rate, you’ll need to maintain a credit score of 660 or higher and an LTV ratio of 80% or 85% or lower. U.S. Bank also offers an attractive 0.5% interest rate discount when you autopay your loan installments from a U.S. Bank checking or savings account.
Pros and Cons
Pros Competitive interest rates High maximum loan limits Can get a rate discount for autopay Can lock in variable HELOC rates up to three times No closing costs Cons Annual fee may apply after the first year unless you’re a U.S. Bank Platinum Checking customer. Early closure fee of 1% of original line or $500 (whichever is less) applies if you pay off your loan within 30 months of opening. Longer closing time compared to online lenders
What Reviewers Say About U.S. Bank
Most Praised Features
Ethical practices: Some reviewers praised U.S. Bank’s fair and transparent practices in comparison with other banks.
Customer service at branches: Some reviewers praised specific branch employees for their helpfulness and efficiency, particularly when handling in-person transactions.
Most Common Complaints
Appraisal and mortgage issues: Some people complained of problems with their property appraisals, such as delays and incorrect valuations.
Poor customer service: Many negative reviews noted customer service issues, such as rude or unhelpful agents and long wait times on the phone.
Loan approvals: Negative reviews frequently noted unexpected denials that changed after initial approval.
We reached out to U.S. Bank for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
Rocket Mortgage
BEST FOR CUSTOMER SATISFACTION
3.8
Minimum APRNot disclosedMax LTV90%Minimum Credit Score680
| Loan Term | 10 or 20 years |
| Closing Costs | Yes |
| Annual Fees | No |
| Discounts | Not disclosed |
| Average closing speed | Not disclosed |
| Availability | Nationwide |
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Why We Like It
We love Rocket Mortgage’s solid reputation and quality customer service. In fact, J.D. Power’s 2023 U.S. Mortgage Origination Satisfaction Study put Rocket Mortgage in second place among its 30 ranked lenders. This study measured overall customer satisfaction using various factors, one of which was being “easy to do business with.” Rocket Mortgage ranked behind only Fairway Mortgage, which doesn’t offer home equity loans.
Besides its customer service, Rocket Mortgage also stands out because it allows borrowers with higher credit scores to borrow more of their home’s equity than most other lenders — up to 90%. This isn’t quite as high as Spring EQ, but is still above average.
We also like that you can get a home equity loan on a vacation home or secondary residence, which isn’t always the case with other lenders.
Pros and Cons
Pros High LTV: You may qualify to borrow up to 90% of your home’s equity with a 740 credit score. Vacation homes eligible: You can take out a home equity loan on a secondary residence. Solid customer experience: Rated No. 2 in a J.D. Powers Survey that measured customer satisfaction. Cons Limited terms: Only two repayment terms are available: 10 or 20 years. High minimum loan amount: The minimum amount you can borrow is $45,000, a higher amount than many other lenders on our list. Closing costs: While some lenders waive closing costs, Rocket charges between 2% and 6% of the loan amount.
What Reviewers Say About Rocket Mortgage
Most Praised Features
Exceptional customer service: Numerous reviews highlighted the professionalism, knowledge and helpfulness of Rocket Mortgage staff members.
Efficiency and quick transactions: A lot of reviewers noted the prompt service they received, particularly when closing loans.
Personalized attention: Many reviews mentioned personal and attentive customer service.
Most Common Complaints
Issues with online document processing: Some reviewers reported problems with the online processing system, noting difficulty in navigating it and experiencing technical issues.
Inconsistent communication: Some reviewers mentioned getting inconsistent information from different staff members.
Unexpected delays and errors: Some negative reviews mentioned delays and errors, often because of staff mistakes or technical problems.
We reached out to Rocket Mortgage for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
Spring EQ
BEST FOR FAST FUNDING
4.0
Minimum APR7.83%Average Closing Speed21 daysMinimum Credit Score640
| Closing Costs | Yes |
| Annual Fees | Not disclosed |
| Discounts | Not disclosed |
| Average closing speed | 21 days |
| Availability | 38 states |
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Why We Like It
We like Spring EQ’s high maximum LTV offering, which allows you to borrow up to 95% of your home equity as long as you have a 700 or higher FICO score. The industry average is around 80%, meaning that you may qualify with a much larger loan with Spring EQ than almost anywhere else on this list. We also like that you can get access to your funds in about 21 days with Spring EQ, and sometimes as soon as 14 days, while the industry standard is closer to 55 days.
Pros and Cons
Pros High LTV: Borrow up to 95% of your home’s equity (with a 700 credit score). Quick funding: Receive your funds in about 21 days, which is much faster than most of its competitors. High maximum amount: Borrow up to $500,000, if you meet credit requirements. Cons Limited availability: Not available in Alaska, Hawaii, Idaho, Massachusetts, Missouri, Nevada, New York, North Dakota, South Dakota, West Virginia, Wyoming or Utah. Fees: Spring EQ charges more fees than we’ve seen with most other lenders on this list. Most notable is the $799 administration fee, along with several others, including credit report, appraisal, recording, notary and disbursem*nt fees.
What Reviewers Say About Spring EQ
Most Praised Features
Customer service: A large number of positive reviews mentioned the responsive and professional service they received.
Quick loan processing: Many reviewers expressed satisfaction with the speed and efficiency of the loan process.
Most Common Complaints
Appraisal issues: Some reviewers complained about issues with their appraisals, such as property valuation discrepancies and delays in the process.
Customer service inconsistency: A significant number of the negative reviews noted customer service issues, such as slow response times.
Loan approval process: Many negative reviewers complained about the loan approval process, citing issues such as unexpected denials or loan term changes.
We reached out to Spring EQ for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
Discover
BEST FOR BORROWERS WITH LITTLE EQUITY
4.0
Minimum APR7.99%Minimum Credit Score620Average Closing Speed55 days
| Closing Costs | No |
| Annual Fees | No |
| Discounts | Not disclosed |
| Average closing speed | 55 days |
| Availability | 48 states |
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Why We Like It
We like that Discover doesn’t charge upfront fees for its home equity loans. It also allows you to borrow up to a 90% LTV, higher than the industry standard. This means that you can borrow up to 90% of your home’s equity without worrying about added fees. We also like that some borrowers can qualify with credit scores as low as 620, which is below the industry average.
Pros and Cons
Pros No upfront fees: No application fees, origination fees or closing costs. Competitive LTV: Access up to 90% of your home’s value — many other lenders cap it at 80%. Minimal eligibility requirements: Caters to borrowers with credit scores as low as 620. Cons Prepayment penalty: You may have to reimburse Discover for some of the closing costs if you repay the loan within three years of closing. Lengthy process: The application and approval process can take several weeks. Not BBB accredited: While Discover Home Equity Loans receives an A+ rating from the BBB, it’s not accredited.
What Reviewers Say About Discover
Most Praised Features
Customer service: Many reviewers praised the responsive and helpful service they received from Discover, appreciating the fact that it’s U.S.-based and available 24/7.
Security features: Some reviewers highlighted Discover’s top-notch security features.
Most Common Complaints
Customer service inconsistency: Some complaints mentioned poor customer service, particularly with things like account closures.
Loan approvals: Many negative reviews pointed out issues with Discover’s approval process, such as getting denied even with strong credit profiles.
We reached out to Discover for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
TD Bank
BEST FOR RATE TRANSPARENCY
4.3
Minimum APR7.89%Max LTV89.90%Minimum Credit Score660
| Closing Costs | Yes |
| Annual Fees | No |
| Discounts | 0.25% with autopay |
| Average closing speed | Not disclosed |
| Availability | Not available in all states |
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Why We Like It
We like TD Bank’s rate table, which allows you to check the exact rates available for specific products without needing to hand over any of your personal information. This is ideal for rate shoppers, who want to quickly find lenders with solid rates. We also like TD Bank’s flexible terms and its low minimum borrowing amount.
Pros and Cons
Pros Flexible terms: TD Bank offers terms of 5, 10, 15, 20 and 30 years. Rate discount: You can save 0.25% points on your interest rate by setting up autopay with a TD Bank checking or savings account. Low minimum loan: TD allows you to borrow as little as $10,000 — much less than most of its competitors. Can borrow against investment property: Unlike most lenders, TD Bank lets you take out a home equity loan against a secondary home – as long as you borrow at least $25,000. Cons Limited information: TD Bank is transparent with its rates, but not about any other aspects of its home equity loans. Not much more information is available online. Closing costs: TD’s home equity loans come with a $99 origination fee and other possible fees. Limited availability: Physical branches are only present in 15 states and Washington, D.C.
What Reviewers Say About TD Bank
Most Praised Features
Convenient branch locations: Some people liked the convenience of all the in-person branches TD Bank has, especially in urban areas.
Specific customer service recognition: Several reviewers mentioned specific employees who they felt offered exceptional service.
Most Common Complaints
Inconsistent customer service: A large number of the negative reviews pointed out inconsistencies in customer service, also reporting long call center wait times and unhelpful representatives.
Online and mobile issues: Some reviews focused on the frequent glitches and poor functionality of the online and mobile services.
Mortgage and loan processing delays: A number of negative reviews mentioned delays in loan and mortgage processing, long wait times and unexpected changes in loan terms after approval.
We reached out to TD Bank for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
Third Federal Savings & Loan
BEST FOR GOOD CREDIT
4.2
Max LTV80%Minimum Credit Score660
Why We Like It
We like Third Federal for its “Lowest Rate Guarantee” which promises to beat the lowest rate you can find for a comparable product or pay you $1,000. This means that if you have good credit, you’re likely to get a lower home equity loan rate here than anywhere else.
Pros & Cons
Pros Lowest rate guarantee: Guaranteed to beat the lowest competitor rate or pay you $1,000. Fixed or adjustable options: Option to choose either fixed or adjustable rate home equity loans. Most lenders only offer fixed-rate home equity loans. Can borrow against investment property: Use a vacation home or secondary residence as collateral. Cons Limited information: Third Federal is transparent about its rates, but offers little other information online. No prequalification: You must go through the application process to see your offers and rates. Limited availability: Home equity loans are only offered in eight states: Ohio, Florida, Kentucky, California, Michigan, Pennsylvania, New Jersey, Virginia and North Carolina.
What Reviewers Say About Third Federal Savings & Loan
Most Praised Features
Competitive interest rates: Several reviews mentioned choosing Third Federal for its competitive interest rates, especially for home equity loans and mortgages.
Customer service: Some reviewers highlighted Third Federal’s amazing customer service, particularly in helping them through the loan process.
Most Common Complaints
Loan process complications: Despite getting some rave reviews from other reviewers, a large number of negative reviews cited loan delays, unexpected denials and inconsistent communication.
Customer service inconsistency: Many people complained about their customer service experience, mentioning rude or dismissive behavior from staff.
We reached out to Third Federal Savings and Loan for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
Connexus Credit Union
BEST FOR SMALL LOANS
4.0
Minimum APR7.56%Max LTV90%Minimum Credit ScoreNot disclosed
| Closing Costs | Yes |
| Annual Fees | No |
| Discounts | Not disclosed |
| Average closing speed | Not disclosed |
| Availability | Not available in all states |
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Why We Like It
Connexus allows you to take out as little as $5,000 — by far the lowest home equity loan amount on our list. This makes Connexus a good choice for borrowers needing a smaller amount of cash than the typical $25,000 minimum at other banks.
Pros and Cons
Pros Small minimum loan amount: Borrow as little as $5,000. Online application: Apply entirely online or by phone. High LTV: Borrow up to 90% of your home’s equity. Cons Payment processing fees: Connexus charges a $9 fee for phone payments and a $4.75 fee for online debit card payments. Must join: You’ll have to become a member to apply. High closing costs: Closing costs can range from $175 to $2,000.
What Reviewers Say About Connexus Credit Union
Most Praised Features
Simple loan process: Some positive reviews noted an easy and efficient loan process.
Friendly and helpful service: Several reviewers stated they received attentive and helpful customer service.
Most Common Complaints
Poor customer service: Though Connexus received plenty of positive reviews about its customer service, not everyone was satisfied. Many of the negative comments cited unprofessional, unresponsive or rude customer service.
Issues with loan and payment handling: Negative reviews frequently mentioned problems with loan payments and poor communication.
Account management and technical issues: Some of the complaints revolved around difficulty managing or accessing accounts online.
We reached out to Navy Federal Credit Union Connexus Credit Union for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
America First Credit Union
BEST FOR MAXIMUM EQUITY
4.0
Minimum APR7.24%Max LTV100%Minimum Credit ScoreNot disclosed
| Closing Costs | Yes |
| Annual Fees | No |
| Discounts | Not disclosed |
| Average closing speed | Not disclosed |
| Availability | Not available in all states |
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Why We Like It
We like that this credit union allows you to borrow up to 100% of your home’s equity, the highest out of any lender on our list. We also like that you’ll get reimbursed up to $250 if your loan is paid back within two years. It’s a prepayment incentive, rather than a prepayment penalty that you’ll find with some other lenders.
It’s a fantastic loan, but there is a catch: You have to live in Utah, Idaho, Arizona or Nevada to take advantage of it.
Pros and Cons
Pros Small minimum loan amount: Borrow as little as $5,000. Prepayment reimbursem*nt: $250 fee reimbursem*nt if you pay the loan off within two years. High LTV: Borrow up to 100% of your home’s equity. Cons Must join: You’ll have to become a member to apply. Limited availability: Home must be located in Utah, Idaho, Arizona or Nevada.
What Reviewers Say About America First Credit Union
Most Praised Features
Interest rates: Great rates were among the most praised features of America First Credit Union.
Customer service: Some reviewers appreciated the friendly and helpful service they received.
Most Common Complaints
Customer service: Many people expressed frustration with unresolved issues and long wait times.
We reached out to America First Credit Union for comment on its negative customer reviews but did not receive a response.
*Reviews aggregated from Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company. Read our customer review methodology to learn more.
Current Home Equity Loan Rates
The providers below are the most competitive home equity loan rates on the market, according to our research.
4.0 Minimum APR*5.99% Max LTV90% Average Closing Speed14-42 Days |
4.0 Minimum APR*7.99% Max LTV90% Average Closing Speed55 Days |
Minimum APR*6.99% (Introductory Period) Max LTV80% Average Closing Speed34 Days |
4.0 Minimum APR*7.56% Max LTV90% Average Closing Speed10 - 15 Days |
Minimum APR*7.24% Max LTV100% Average Closing SpeedNot Disclosed |
Minimum APR*7.29% Max LTV80% Average Closing Speed14 - 60 Days |
Minimum APR*7.34% Max LTV100% Average Closing Speed45 to 55 Days |
4.6 Minimum APR*7.65% Max LTV80% Average Closing SpeedNot Disclosed |
Minimum APR*Not Disclosed Max LTV90% Average Closing SpeedNot Disclosed |
4.0 Minimum APR*7.83% Max LTV95% Average Closing Speed21 Days |
4.3 Minimum APR*7.99% Max LTV90% Average Closing SpeedNot Disclosed |
Minimum APR*8.55% Max LTV70% Average Closing SpeedNot Disclosed |
4.0 Minimum APR*10.25% Max LTV80% Average Closing Speed15 - 18 Days |
| Provider | Minimum APR* | Max LTV | Average Closing Speed |
|---|---|---|---|
| 5.99% | 90% | 14-42 Days | |
| 7.99% | 90% | 55 Days | |
| 6.99% (Introductory Period) | 80% | 34 Days | |
| 7.56% | 90% | 10 - 15 Days | |
| 7.24% | 100% | Not Disclosed | |
| 7.29% | 80% | 14 - 60 Days | |
| 7.34% | 100% | 45 to 55 Days | |
| 7.65% | 80% | Not Disclosed | |
| Not Disclosed | 90% | Not Disclosed | |
| 7.83% | 95% | 21 Days | |
| 7.99% | 90% | Not Disclosed | |
| 8.55% | 70% | Not Disclosed | |
| 10.25% | 80% | 15 - 18 Days |
| Provider | Minimum APR* | Max LTV | Average Closing Speed |
|---|---|---|---|
| 5.99% | 90% | 14-42 Days | |
| 7.99% | 90% | 55 Days | |
| 6.99% (Introductory Period) | 80% | 34 Days | |
| 7.56% | 90% | 10 - 15 Days | |
| 7.24% | 100% | Not Disclosed | |
| 7.29% | 80% | 14 - 60 Days | |
| 7.34% | 100% | 45 to 55 Days | |
| 7.65% | 80% | Not Disclosed | |
| Not Disclosed | 90% | Not Disclosed | |
| 7.83% | 95% | 21 Days | |
| 7.99% | 90% | Not Disclosed | |
| 8.55% | 70% | Not Disclosed | |
| 10.25% | 80% | 15 - 18 Days |
No results were found.
In the News: Home Equity Loan Rates
Fed Rates Poised to Drop In September
Interest rate relief could be on the way as Federal Reserve Chair Jerome Powell has suggested a rate cut is very likely at the next Fed meeting on Sept. 17-18. This comes on the heels of the Fed's July meeting where rates remained steady at a 23-year high.
That could mean borrowers hoping home equity rates would drop in the foreseeable future will have to wait a little longer, as the market usually follows the Fed’s lead.
“The Fed once again decided to keep interest rates unchanged, while indicating that they are seeing the necessary progress to get inflation closer to the 2% target – this opens the door for interest rate cuts before the end of the year,” said Kyle Enright, President ofAchieve Lending. “Based on the Fed’s decision and commentary today, we anticipate that rates for HELOCs and first-lien mortgages, will remain range-bound, but modestly lower, overall.”
Ohan Kayikchyan Ph.D., certified financial planner and founder ofOhan The Money Doctor, agreed with Enright about the status of rates.
“HELOCs have variable interest rates, mimicking the rise or fall of the federal funds rate,” Kayikchyan said. ”Usually, interest rates go up quickly, like a rocket, but come down slowly, like a feather. As the Fed continues its policy of bringing inflation down to its 2 percent benchmark, the rates will likely stay elevated for now.”
Understanding Home Equity Loan Rates
A home equity loan rate is the interest rate a lender charges when you borrow money using the equity in your home as collateral.
Your rate impacts the overall cost of borrowing because it determines how much interest you'll have to pay on top of the amount you borrow. A lower rate means you'll pay less overall interest, while a higher rate means you'll pay more.
Lenders determine what rate you qualify for based on factors like your credit score, income and the amount of equity you have in your home. The better your credit score and financial situation, the more likely you are to qualify for a lower rate. Market conditions — like the Federal Reserve's interest rate — can also impact home equity loan rates.
>> Related: Learn more about how home equity loan rates work
Home Equity Loan vs. HELOC
Home equity loans and HELOCs both give you access to the equity in your home, but they work differently.
A home equity loan is a lump sum loan you repay over a fixed term, usually with a fixed interest rate. It’s also known as a second mortgage.
A home equity loan can be ideal if you need a large amount of money upfront for a specific expense, like paying off high-interest debt, getting a new roof, buying a boat or covering a surgery bill.
A home equity line of credit (HELOC) is a revolving line of credit you draw upon as needed, up to a certain limit. It works much like a credit card. You only pay interest on the amount you borrow rather than the entire line amount for which you’re approved.
HELOCs can be a good option if you need ongoing access to money, like when you’re renovating a home in stages or are covering other expenses where you’re not sure exactly how much you’ll need.
>> Related: Learn more about HELOCs vs. home equity loans
Finding the Best Home Equity Loan Rate
So, how do you choose the best home equity loan rate? It boils down to a few key steps. First, decide whether a fixed or variable rate is right for you. Fixed rates are most common with home equity loans. They offer predictable monthly payments that help make it easier to budget.
Some home equity loan lenders may offer variable rates that change over time. Variable rates are typical with HELOCs. If you choose a variable-rate loan, make sure you can afford any potential interest rate increases.
Next, you'll want to understand APR, or annual percentage rate, which includes both the interest rate and any fees associated with the loan. Comparing APRs — rather than just interest rates — can give you a more accurate picture of the overall cost of borrowing.
Ultimately, the best home equity loan rate is the one that offers you the most affordable solution. Carefully consider all the factors that will affect your payments. This includes not only the rate, but also features like minimum and maximum loan amounts, loan terms and your maximum loan-to-value (LTV) ratio. And comparing rates from multiple lenders is crucial, so don’t rush the process. Taking the time to find the best home equity loan rate can lead to substantial savings.
“There's an advantage to getting a home equity product from your primary mortgage lender. Many lenders provide loyalty incentives to existing clients looking for a home equity loan or other types of loans. These benefits could include a lower interest rate, reduced or waived fees or a mix of both. Also, be sure to ask about the possibility of waiving or reducing charges like appraisal, application or document fees.”
Say you're looking to borrow $50,000 for a home renovation project. Lender A offers a fixed rate of 6.5% APR, while Lender B offers a fixed rate of 5.5% APR. Over a 10-year repayment period, Lender A's loan would cost you $68,129 in total, while Lender B's loan would cost you $65,116. By choosing the lower rate from Lender B, you'd save over $3,000 in interest charges.
Home Equity Loan Calculator
Most lenders require a loan-to-value (LTV) ratio of 85% or less to qualify for a home equity loan. Use our calculator to see if you may be eligible to draw on your home equity and how much you might be able to borrow.
LOAN INFORMATION
This is the ratio between how much you still owe on your home and how much it is worth. Generally, you need an LTV of 85% or less to tap into your home equity.
Current loan-to-value (LTV) ratio
50.0%
This is how much we estimate you can borrow. Lender requirements will vary.
YOU MAY BE ABLE TO BORROW UP TO
$140,000
Your outstanding mortgage balance exceeds 85% of your home value.
Since most lenders limit the loan-to-value (LTV) ratio for home equity loans at 85%, you may not be eligible for a home equity loan at this time.
Lenders typically require a credit score (FICO) of 620 or higher to qualify for a home equity loan or HELOC.
Lenders typically require a credit score (FICO) of 620 or higher to qualify for a home equity loan or HELOC.
You’ll likely need to improve your credit score before you can tap into your home equity. Check out some tips to do so here.
>> Related: Use our home equity loan calculator
How Your Credit Score Impacts Your Home Equity Loan Rate
Your rate impacts the overall cost of borrowing because it determines how much interest you'll have to pay on top of the amount you borrow. A lower rate means you'll pay less overall interest, and a higher rate means you'll pay more.
Lenders determine what rate you qualify for based on factors such as your credit score, income and the amount of equity you have in your home. The better your credit score and financial situation, the more likely you are to qualify for a lower rate.
Getting favorable home equity loan rates requires some research and preparation — but the savings make it well worth it. First, review your credit reports to ensure they’re accurate and up to date. You can request a free credit report once per year from each of the credit bureaus: Equifax, Experian and TransUnion.
Next, research lenders and compare rates from at least three companies. Don’t be afraid to negotiate. Let lenders know you’re shopping around, and ask if they can beat any rates, fees or terms you’ve already been given. Getting prequalified with multiple lenders can give you a better idea of what rates and terms you may be eligible for.
Lastly, improving your credit score can help you access better rates. You can boost your score using these tips:
- Make your loan and credit card payments on time and in full each month; set up automatic payments so you don’t forget.
- Keep your credit utilization ratio low by not using too much of your credit limit.
- Don’t open too many new credit accounts at once.
- Monitor your credit reports every month and dispute any errors.
Meet with a nonprofit credit counselor to develop a plan to improve your credit.
“Depending on the situation, you may be able to negotiate your HELOC rates. As the real estate market has cooled in most areas, lenders may be more eager to do business and will negotiate rates and fees with you to earn your business. With interest rates being as high as they are, there’s more wiggle room for deals to be made.”
Common Uses for a Home Equity Loan
MarketWatch Guides asked 1,500 Americans about their experience with home equity loans to determine the most popular uses of these loans. We found that the majority of borrowers used their home equity loans for home improvement, but a substantial percentage used them to consolidate debt. Here’s more about each of the most common uses:
- Home Improvements or Renovations (54.81%) - The majority of borrowers use home equity loans to pay for home improvements or renovations. When you use the loan for this purpose, you can often write off the interest you pay on your federal taxes. Baby Boomers are the most likely generation to use home equity for this purpose, with millennials following closely behind.
- Debt Consolidation (15.51%) - Debt consolidation means using a new loan to pay off and replace existing accounts, such as credit card debt. Boomers once again were the most likely generation to use home equity for this purpose.
- Moving (5.06%) - This includes both local moves and out-of-state moves. Gen X was the most likely to use these loans for moving.
Other uses for home equity loans, with small percentages:
- Medical expenses
- Education expenses
- Car financing or repairs
- Vacations
- Weddings
- Everyday bills
>> Related: Learn more about if a home equity loan is a good idea
Recap of Our Picks for the Top Home Equity Loan Rates
- Navy Federal Home Equity Loans: Best credit union loan
- Bethpage Home Equity Loans: Best HELOC conversion loan
- U.S. Bank Home Equity Loans: Best for large loans
- Rocket Mortgage Home Equity Loan Review: Best for customer satisfaction
- Spring EQ Home Equity Loans: Best for fast funding
- Discover Home Equity Loan Review: Best for borrowers with little home equity
- TD Bank Home Equity Loan Review: Best for rate transparency
- Third Federal Home Equity Loans: Best for good credit
- Connexus Home Equity Loans: Best for small loans
- America First Credit Union Home Equity Loans: Best for maximum equity
Frequently Asked Questions About Home Equity Loan Rates
There are several things you can do to get a better rate on a home equity loan, including boosting your credit score, lowering the amount of debt you have (also known as your debt-to-income ratio) and comparing rates from multiple lenders. Also, having a larger amount of equity in your home can help you qualify for a lower rate.
Yes, you can tap into your home’s equity without refinancing. A home equity loan and a HELOC are two ways to do this. Both are separate loans that allow you to borrow against the equity you’ve built up in your home without changing your primary mortgage.
Home equity loans may be tax deductible, but it depends on the purpose and amount of the loan. According to the IRS, home equity loan interest is deductible if you use the money to buy, build or substantially improve the home that secures the loan. The deduction is limited to the interest paid on loans up to $750,000 ($375,000 if married and filing separately).
The minimum credit score you need varies by lender. Some lenders prefer borrowers to have a FICO score in the mid-600s, while others may prefer scores of 700 and above. The best way to know if you’re eligible for a home equity loan is to get prequalified from multiple lenders. Prequalification tells you what rates you might qualify for without impacting your credit score.
Editor’s Note: Before making significant financial decisions, consider reviewing your options with someoneyou trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
Customer Review Methodology
To provide an in-depth perspective on how customers feel overall about banks that offer home equity loans, the MarketWatch Guides team compiled 7,488 reviews from publicly available user-review sites such as Trustpilot, the Better Business Bureau (BBB), Consumer Affairs, WalletHub and Best Company.
We then categorized each review and analyzed the sentiment to determine whether it was positive or negative. With this data, we highlighted the most praised features and most common complaints for each bank.
While most of our banks had hundreds or thousands of reviews, Third Federal Bank only had 39 reviews. This small sample size should be taken into consideration before you choose a financial institution.
Methodology: Our System for Ranking the Best Home Equity Loans
Our team analyzed the most popular home equity loan companies on the market and put together a comprehensive 100-point scoring system using factors that are most important to you, the consumer.
We then scored several data points, analyzing each home equity loan company’s disclosures, licensing, marketing, sample loan agreements and websites to understand their offerings and terms.
Here is a broad breakdown of the factors we used:
Affordability (35%)
A key factor in whether a personal loan is a good deal or not is how easy it is to pay back. This will include variables such as interest rate, fees and terms.
Loan Features (35%)
Equally important for most home equity loan borrowers are the terms and conditions each lender offers. We look at a wide range of data points in this category, including minimum and maximum loan amounts, maximum loan-to-value ratio and closing time.
Customer Experience (20%)
How easy a company is to work with is also a key consideration for home equity loan borrowers. We look at a wide range of data points in this category that include customer support options, application processes and how widely available these products are.
Company Reputation (10%)
A lender’s reputation is another key factor for personal loan borrowers. We review each company’s Better Business Bureau (BBB) profile along with regulatory actions and investigations that might involve these companies.
Our rating system is designed to help you make the best and most informed decision possible when shopping for a home equity loan. However, the highest-rated lenders on our list may not make the most sense for you. To learn more, you can read our full home equity loan methodology.
If you have feedback or questions about this article, please email the MarketWatch Guides team at [email protected].
