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Home equity loans are one way that homeowners can borrow against the equity in their homes. With a lump-sum loan, you can fund home improvement projects, pay for higher education costs, and consolidate higher-interest debt.
Typically, home loan lenders require you to have:
Moreover, the best home equity lenders often boast low fixed interest rates, repayment periods spanning up to 30 years, and low fees and loan costs.
However, not every lender offers named “home equity loans.” Instead, some let you pull cash out of your home with a HELOC, or home equity line of credit, or a cash-out refinance.
In this review of the best home equity loan lenders, we’ll take a look at financiers that offer at least one of the three.
Lower.com doesn’t provide information about its home equity loans online, though it does talk about its HELOCs. Qualifying borrowers can get approved for up to 95% of their home’s value or a maximum of $350,000. The lender offers 10-year loan terms with interest-only payments until the draw period ends.
Interested borrowers can apply online or contact the lender directly for more information. There’s no hard credit pull to get preapproved, and Lower.com customers qualify for their “Free Refi for Life” program.
>> More: Lower Mortgage Review
Guaranteed Rate doesn’t offer home equity products, but borrowers can apply for a cash-out refinance to pull equity from their home. The lender boasts competitive interest rates, excellent customer service, and an online, streamlined application process. You can get prequalified in under an hour and receive your letter of preapproval within 48.
Guaranteed Rate does offer showcase rates for some products online, but the best way to get a personalized quote is applying or calling. There’s also an option to view sample estimates by answering questions about your home and finances.
>> More: GuaranteedRate Mortgage Review
According to a 2015 press release, LoanDepot began offering fixed-rate home equity loans that year. Borrowers could receive loans up to $250,000 or 95% of their home’s equity with no prepayment penalties for early payoff.
But the lender’s website currently makes no mention about their home equity programs. Instead, LoanDepot redirects borrowers to cash-out refinances, touting their “low refinance rates” and fast approvals. Borrowers can apply from the online portal or one of its 200 nationwide branches.
>> More: LoanDepot Mortgage Review
Reali Loans is another lender that offers cash-out refinances in lieu of home equity products. Borrowers can use the Reali Loans calculator to get an estimated interest rate quote using generalized information.
With inputs of a $500,000 mortgage and $50,000 cash-out, we found rate quotes as low as 2.888% to over 4.75% for low-credit borrowers. But the lender does note that rates are subject to change based on location and your credit and financial information. For a more accurate view, you’ll need to sign up or speak to a loan officer.
Flagstar is a full-service bank that offers checking, savings, and retirement accounts in addition to mortgage and home equity products. This hybrid online and brick-and-mortar lender boasts competitive rates and fees, a quick online experience, and mortgage rate transparency.
Moreover, borrowers can choose between variable-rate HELOCs and fixed-rate home equity loans. HELOC limits range from $10,000-$500,000 and no bank-imposed costs if you keep your account open for at least 3 years. However, its home equity loans are primarily limited to the Michigan area and are only available for residential properties.
>> More: Flagstar Bank Mortgage Review
PenFed Credit Union primarily serves the military and government communities, but membership isn’t limited based on those criteria. This lender offers HELOCs for up to 90% of your combined equity for a limit of $500,000 per loan ($400,000 for non-owner occupied homes). There’s only one HELOC period available with a 10-year draw and 20-year repayment.
PenFed’s HELOCs require a 660 credit score, though other eligibility requirements are unclear. PenFed also covers most of its own closing costs (unless you close your account within 3 years).
SunTrust – now Truist – is a full-service bank with checking, savings, and a variety of loans on the menu. Borrowers who want to tap their equity can opt for a cash-out refinance with rates starting at 3.2%. HELOCs are also available starting at the Prime Rate + 1.39%.
SunTrust lets borrowers take out up to $500,000 in variable-rate HELOCs with a ten-year draw period. You can also “buy” a fixed-rate draw (minimum $5,000) for an upfront $15 fee. To get started, you can apply online, call a loan officer, or drop in at a branch.
Connexus Credit Union offers a full range of home equity products to qualifying members in all 50 states. Home equity loan borrowers can take out up to 90% of their home’s value and receive funds at signing. The minimum loan amount is $5,000 with terms up to 180 months available.
Connexus also offers both traditional and interest-only HELOCs with 15-year draw and 15-year repayment periods. Borrowers can apply online or over the phone – and there are no home appraisals required!
PNC Bank is another full-service operation that offers HELOCs to qualifying borrowers. These come in both variable- and fixed-rate plans, with rate locking and unlocking available at any point during the draw period. PNC Bank also boasts a number of discounts on their loans.
You can get a loan estimate by answering a quick questionnaire about your home and finances. Alternatively, you can opt for a cash-out refinance and borrow up to 84.9% of your home’s fair market value. Moreover, PNC’s loans come with no lender fees or closing costs.
Bank of America is the second-largest bank in the United States with over 4,300 branches available nationwide. The lender offers HELOCs with introductory rates as low as 1.990% for 6 months, after which rates climb to 4.400%.
This lender’s HELOCs also only come in one term option, a 10-year draw period followed by a 20-year repayment period. But you can convert up to 90% of your balance to a fixed-rate loan at any time. Qualifying borrowers can borrow up to $1 million, though the lender requires a minimum loan of $25,000.
>> More: Bank of America Mortgage Review
Figure is a newer lender that uses blockchain technology, AI, and automated valuations for an entirely digital application and funding process. The financier offers HELOCs in 41 states and Washington, D.C. Loans range from $15,000 to $250,000 and repayment terms up to 30 years.
Figure doesn’t charge appraisal, annual, late, or prepayment fees. But unlike most HELOC lenders, you’re required to borrow your full loan amount upfront, with additional credit available as you repay your loan. Moreover, each draw receives a fixed interest rate for the life of that particular loan, though your rate may vary between draws.
U.S. Bank offers HELOCs to qualifying borrowers in all 50 states, with loan limits up to $1 million in California and $750,000 elsewhere. Qualified borrowers can get repayment terms up to 30 years, and both fixed-rate and interest-only loan options.
Unfortunately, U.S. Bank doesn’t disclose its credit or income requirements for home equity products. But it does note that scores of at least 730 get the best APRs available. Moreover, lines of credit come with a $90 annual fee that can only be waived in your first year by opening a U.S. Bank Platinum Checking Package.