Third Federal Home Equity Review: Competitive Rates, but Limited Availability and Borrowing Power

3.5 _/5

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HELOC

• Competitive variable rates
• Flexible access to funds through checks and debit cards
• No closing costs or prepayment penalties
• Lowest Rate Guarantee program: Beat any competitor’s rate or receive $1,000

• Only available in 26 states
• Requires principal and interest payments during the draw period (no interest-only option)
• $65 annual fee after the first year
• Capped at 80% LTV, which may limit borrowing power

Variable rates (APR)	Starting at 7.24%
Loan amounts	$10,000 – $200,000
Repayment terms	10-year draw; 20-year repayment
Fees	$65 annual fee (waived the first year), no application or early repayment fees

Home Equity LoanView Rates

• Multiple options, including fixed-rate and 5/1 adjustable loans
• Low fixed APRs starting at 7.09% for 5-year loans
• No closing costs or prepayment penalties
• Fixed monthly payments ensure budget predictability
• Unique Fixer Upper Loan offers small borrowing amounts ($1,000 – $9,900) with a 2.99% APR

• Available in only 8 states
• Capped at 80% LTV, restricting borrowing potential
• Adjustable-rate loans introduce uncertainty after the first 5 years

Rates (APR)	Fixed: starting at 7.09% (5-year term) as of Nov. 2024 Adjustable: starting at 7.01% Fixer Upper: fixed at 2.99%
Loan amounts	$10,000 – $200,000 (Fixer Upper: $1,000 – $9,900)
Repayment terms	5 – 30 years (varies by loan type)
Fees	None

Third Federal offers home equity loans and HELOCs with competitive rates, no closing costs, and repayment periods of up to 30 years. However, the lender’s 3.5/5 rating reflects some limitations. Its products are not available in all states, and the maximum loan-to-value (LTV) ratio is capped at 80%, which restricts borrowing power compared to lenders offering higher LTVs.

Additionally, its HELOC requires principal and interest payments during the draw period, unlike competitors that allow interest-only options. While Third Federal’s low fees and fixed rates are appealing, borrowers looking for greater flexibility or availability may prefer higher-rated lenders. Here’s a closer look in our full review.

Third Federal home equity line of credit

3.5 _/5

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Our take on Third Federal’s HELOC

Third Federal’s HELOC offers competitive variable rates and convenient access to funds through checks and debit cards. It also comes with a Lowest Rate Guarantee, promising to beat any competitor’s rate or pay you $1,000.

However, the product is only available in 26 states, so its availability is more limited compared to lenders like Figure (45 states), Bethpage (49 states), and LendingTree (50 states).

Unlike many HELOC lenders, Third Federal requires principal and interest payments during the draw period, which might not work for borrowers looking for an interest-only option to lower upfront costs.

There’s also a $65 annual fee after the first year, and the lender doesn’t disclose minimum credit score or income requirements, making it harder to gauge eligibility upfront.

Third Federal HELOC rates, terms, and more

A HELOC is an open-ended line of credit secured by a portion of your home’s equity. Approved borrowers can pull funds as needed during the draw period (the first 10 years) for any purpose. You’ll only owe interest on the amount borrowed, and the repayment period lasts an additional 20 years.

Here are the key details for Third Federal’s HELOC:

Feature	Details
Rates (APR)	Starting at 7.24%
Rate discounts	Not disclosed
Loan amounts	$10,000 – $200,000
Draw period	10 years
Repayment period	20 years
Maximum LTV	80%
Minimum credit score	Not disclosed
Minimum income	Not disclosed
Fees	$65 annual fee (waived the first year)
Minimum monthly payment	$100

Third Federal’s capped loan-to-value (LTV) ratio of 80% may limit your borrowing power compared to other lenders that offer higher LTVs. However, borrowers benefit from flexible access to funds through checks and debit cards.

How does repayment work?

Third Federal’s HELOC requires immediate repayment of both principal and interest during the draw period, with a minimum monthly payment of $100 if a balance is owed. This repayment model differs from many competitors that offer interest-only payments during the draw period, which could make it less appealing to borrowers focused on minimizing upfront costs.

After the draw period ends, you can no longer borrow additional funds, and the HELOC transitions into a 20-year repayment period. During this time, you’ll continue making monthly payments until the remaining balance is fully repaid.

Who is eligible for a Third Federal HELOC?

To qualify, your property must be your primary, owner-occupied residence, and you must be located in one of the 26 eligible states.

Third Federal does not allow borrowers to have other HELOCs open against the same property. However, the lender doesn’t disclose minimum credit score or income requirements, leaving eligibility somewhat unclear.

Third Federal home equity loan

Best Overall

3.5 _/5

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Our take on Third Federal’s home equity loan

Third Federal offers three distinct home equity loan options to meet various borrower needs: traditional fixed-rate loans, a 5/1 adjustable-rate loan, and the Fixer Upper Home Repair Loan.

The fixed-rate option provides stability with consistent payments and no closing costs, while the adjustable loan starts with lower rates, appealing to those comfortable with rate changes after the first five years. The Fixer Upper loan is ideal for small-scale renovations, offering low loan amounts and a fixed 2.99% APR.

While these options are competitive, Third Federal’s home equity loans are only available in eight states, limiting access. Borrowers looking for flexibility might prefer fixed-rate HELOCs, such as those offered by Figure or Aven, which allow redraws during the draw period—a useful feature for ongoing renovations.

Third Federal’s Lowest Rate Guarantee program is a standout feature, ensuring competitive rates or $1,000 compensation if a lower rate is found.

Third Federal home equity loan rates, terms, and more

The traditional fixed-rate home equity loan is a lump-sum option with predictable monthly payments. This loan is best for borrowers who prefer stability and long-term budget certainty.

Key features include:

Feature	Details
Rates (APR)	7.09% for 5-year loan; 7.39% for 10-year loan, as of Nov. 2024
Rate discounts	Not disclosed
Loan amounts	$10,000 to $200,000
Repayment periods	5 or 10 years
Maximum LTV	80%
Minimum credit score	Not disclosed
Minimum income	Not disclosed
Fees	None

Borrowers can make additional payments anytime without penalty, which helps reduce interest costs over the life of the loan.

How does repayment work?

Fixed-rate home equity loans require consistent monthly payments throughout the loan term, providing predictable costs. Borrowers who need additional funds after disbursement must take out a new loan or consider a HELOC.

The lump-sum disbursement makes this loan ideal for single, large expenses, such as debt consolidation or major home renovations.

Who’s eligible for a Third Federal home equity loan?

Eligibility requirements include:

• The property must be your primary, owner-occupied residence.
• The property must be located in one of the eight eligible states:

5/1 Adjustable Home Equity Loan

The 5/1 Adjustable Home Equity Loan starts with a fixed interest rate for the first five years, after which the rate adjusts annually based on the Prime Rate + 0%. The initial fixed rate is typically lower than that of a traditional fixed-rate home equity loan, which can result in smaller monthly payments during the first five years.

After the introductory period, the rate adjusts each year according to market conditions, potentially increasing or decreasing your monthly payment.

Here’s a closer look at the details:

Feature	Detail
Rates (APR)	7.01%; typically about 0.50% lower than fixed-rate options
Max. term	30 years
Max. LTV	80%
Fees	None
Features	No prepayment penalties, balanced monthly payments

Why choose the Adjustable Home Equity Loan?

This option is ideal for borrowers who:

• Expect to pay off the loan or refinance within the first five years, minimizing exposure to rate adjustments.
• Prioritize lower monthly payments in the short term, such as for a temporary expense or project.
• Are comfortable with the risk of rate increases after the introductory period.

Eligibility requirements

The 5/1 Adjustable Equity Loan has the same eligibility criteria as the standard fixed-rate home equity loan. It’s available to borrowers who’s primary residence is located in the same eligible states as the standard fixed-rate home equity loan (California, Florida, Kentucky, New Jersey, North Carolina, Ohio, Pennsylvania, or Virginia).

The LTV ratio is 80%, similar to the fixed-rate home equity loan. Minimum credit score and income requirements are not disclosed by Third Federal.

Fixer Upper Home Repair Loan

The Fixer Upper Home Repair Loan is a unique product designed for homeowners needing a small loan for minor renovations or repairs. Loan amounts range from $1,000 to $9,900, with an exceptionally low fixed interest rate of 2.99% APR.

Unlike traditional home equity products, this loan is specifically geared toward small-scale home improvement projects and is only available in select areas of Ohio and Florida.

Feature	Detail
Loan amounts	$1,000 – $9,900
Rates (APR)	Fixed at 2.99%
Min. monthly payment	$10
Features	No closing costs or prepayment penalties

How does it work?

Funds are disbursed as a lump sum, and repayment is structured with a minimum monthly payment of just $10, making it a highly affordable option. There are no closing costs, annual fees, or prepayment penalties, further lowering the cost of borrowing.

Why choose the Fixer Upper Home Repair Loan?

This loan is best suited for:

• Homeowners who only need a small amount of money for home repairs or upgrades.
• Borrowers who want to avoid the higher borrowing thresholds of traditional home equity loans.
• Those who qualify in eligible areas of Ohio and Florida.

Eligibility requirements

• The property must be located in specific regions of Ohio or Florida.
• It must be a primary, owner-occupied residence.
• Third Federal does not disclose credit score or income requirements for this loan.

Pros and cons of a Third Federal HELOC or home equity loan

Pros

• Borrow against your home’s equity for a maximum loan-to-value ratio (LTV) of 80%.

• Small repair loans are available in addition to HELOCs and home equity loans of up to $200,000.

• Lowest Rate Guarantee ensures Third Federal will beat any other interest rate offers or pay you $1,000.

• All rates are fixed.

Cons

• Not available in all states.

• Only offered on primary, owner-occupied homes.

• Interest-only payments are not offered during your HELOC’s draw period.

• Third Federal may require automated direct payments from some borrowers. 

If you’re unsure whether Third Federal is the right lender for your home equity needs, check out our list of home equity companies.

How does Third Federal compare to other home equity lenders?

Third Federal offers competitive home equity loans and HELOCs with no closing costs and a Lowest Rate Guarantee program. However, its products are only available in a limited number of states, and borrowers can access up to 80% of their home’s value—less than some competitors. For example, Spring EQ allows borrowers to access up to 90% of their home equity, making it a strong choice for those looking to maximize borrowing power.

Competitors like Figure and Aven also provide more flexibility. Figure’s fixed-rate HELOCs allow redraws during the draw period, a feature Third Federal lacks, while Aven offers smaller HELOCs starting at $5,000 with a hybrid credit card-style approach. For borrowers with larger borrowing needs, Bethpage FCU offers LTVs up to 90% and introductory fixed-rate HELOC options.

Meanwhile, LendingTree excels in providing access to multiple lenders across all 50 states, giving borrowers the ability to shop and compare offers more easily than Third Federal’s single-product approach.

While Third Federal’s no-fee structure and predictable fixed-rate loans may appeal to some, competitors like Spring EQ and Bethpage FCU better serve borrowers seeking higher LTVs, broader access, or more tailored financing options.

What do Third Federal’s customers say about the company?

Third Federal has mixed customer reviews, with ratings varying across platforms. As of November 28, 2024, the company has an A+ rating with the Better Business Bureau (BBB), but it is not BBB-accredited.

An A+ rating reflects how a business responds to customer complaints and handles disputes, but accreditation would indicate that the company has agreed to meet BBB’s additional standards, such as transparency and ethical business practices.

Source	Rating	Number of reviews
Better Business Bureau	2.05/5	19
Trustpilot	2.9/5	2
Google	2.2/5	49

Ratings collected on November 28, 2024

Customer feedback frequently mentions challenges with outdated systems and technology, which can make Third Federal frustrating to work with. Some reviews also highlight issues unrelated to home equity products, including reports of spam and frequent solicitations.

While reviews can help identify patterns, remember that those with negative experiences are often more likely to leave feedback, which can skew ratings.

If ease of use and modern technology are priorities, borrowers may want to explore competitors like Figure or Aven, which are known for their streamlined online platforms.

How do I apply with Third Federal?

Once you know which product best suits your situation, you can proceed with the online application process. 

There, you’ll share certain personal information, including your:

• Name
• Address
• Email address
• Date of birth
• Property address
• Driver’s license number (You may need to upload a copy.)

You’ll first need to provide your Social Security number and authorize Third Federal to pull your credit report. The lender doesn’t offer prequalification with a “soft” credit check. 

You’ll also need to provide the ages of your dependents and information about your assets, expenses, and income.

How does Third Federal determine how much I can borrow?

First, you can only borrow within Third Federal’s home equity borrowing limits, which range from $10,000 to $200,000. (If you live in some regions of Florida or Ohio and are interested in the Fixer Upper Home Repair loan, you can get a smaller loan for $1,000 to $9,900.)

Third Federal will let you borrow up to a CLTV of 80% within these limits. You can take out as much as 80% of your home’s current value minus any existing loans or liens on the property. 

So if your home is worth $300,000, and you have a mortgage balance of $100,000, you could borrow up to $140,000 with a Third Federal home equity loan or line of credit:

$300,000 home value x 80% LTV = $240,000 maximum

$240,000 – $100,000 remaining mortgage = $140,000 available 

Beyond that, you may be further limited in how much you can borrow based on personal factors. Some lenders, for example, may allow a smaller LTV for borrowers with lower credit scores or a higher DTI. 

What does the appraisal process look like?

To verify your home’s current value—which it uses to calculate your available equity and determine how much you can borrow against the house—your lender will likely need an updated home appraisal.

A home appraisal is a report outlining the structure and important systems within your home that contribute to its market value. A licensed inspector will visit the property and draw up the appraisal, using comps (recently sold local, comparable homes) to calculate the property’s value. 

Third Federal will order the appraisal from a network of approved third-party inspectors if required. The lender covers the fee for this report.

Does Third Federal charge any fees?

There are a handful of fees to be aware of when taking out a Third Federal home equity loan or line of credit.

The first is a $65 annual fee, which just applies to HELOCs. Third Federal will waive it the first year.

To process and disburse the loan or line of credit, Third Federal will incur expenses called closing costs. These include credit reports, appraisals, title work, flood reports, mortgage filing fees, and certain taxes. Some lenders may pass a portion (or all) of these on to borrowers, but Third Federal absorbs these costs. 

You also won’t incur any fees for paying off your HELOC early and closing the account. Some lenders will charge early prepayment penalties or make borrowers repay a portion of their closing costs if they pay off their HELOC within the first few years. Third Federal, however, does not charge any penalties or force borrowers to repay fees.

Fee type	HELOC	Home equity loan
Application fee	None	None
Annual fee	$65, waived the first year	None
Closing costs	None	None
Early repayment fee	None	None

Does Third Federal have a customer service team?

If you need to speak to a Third Federal representative or have questions about a home equity product, you have several options to reach a representative.

First, you can visit a local branch if you live near one. Branches are only available in Ohio and Florida right now, so this in-person option is limited.

You can also contact customer care by calling 844-798-7784. Representatives are available six days a week: 

• 8:30 a.m. to 5 p.m. Eastern time, Monday through Thursday
• 8:30 a.m. to 6 p.m., Fridays
• 8:30 a.m. to 1:30 p.m., Saturdays

If you’re already a customer, you can send a secured message through the Third Federal online banking platform, and a representative will contact you. You can request a call from a representative, as well, by filling out a call request form online.

How we rated Third Federal’s HELOC and home equity loan

We designed LendEDU’s editorial rating system to help readers find companies that offer the best home equity products. Our system awards higher ratings to companies with affordable solutions, positive customer reviews, and online transparency of benefits and terms.

We compared Third Federal to several home equity lenders, using hundreds of data points from company websites, public disclosures, customer reviews, and direct communication with company representatives. We weighted, scored, and combined each factor to produce a final editorial rating. This rating is expressed on a scale from 1 to 5, with 5 being the highest possible score. Our take is represented in our rating and best-for designation, recapped below.

Product	Rating
Third Federal HELOC	3.5
Third Federal home equity loan	3.5