Best Home Equity Line of Credit (HELOC) Rates & Lenders

A home equity line of credit, or HELOC, is one option for consumers interested in borrowing money to pay for things such as home improvements or to refinance debt.

HELOCs are beneficial in many situations, but they aren’t the right choice in others since you’re putting your home at risk. It’s usually best not to borrow unless you need the money for something important.

If you’re trying to decide if a HELOC is right for you, this guide can help. It will cover the pros and cons of HELOCs as well as the best HELOC lenders, according to our Editorial Ratings.

On this page:​

• Current Average Lowest HELOC Rate
• ​Best HELOC Lenders & Rates
• Understanding HELOCs
• Pros and Cons of HELOCs

Current Average Lowest HELOC Rate

3.79%

Based on the lowest fixed rates of 7 lenders, as of April 2, 2020

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8 Best HELOC Lenders & Rates

If you feel a HELOC is the best choice for your borrowing needs, here are eight top lenders to consider. Click on a lender to jump down to its review:

1. M&T Bank
2. Figure
3. Regions Bank
4. SunTrust
5. PNC
6. BB&T
7. Citizens Bank
8. Wells Fargo

1) M&T

LendEDU Rating: 5/5

M&T Bank is one of the smaller and perhaps lesser known financial institutions on this list. However, M&T strives to be competitive with its rates and offerings. The lender’s HELOC product is called the M&T CHOICEquity, and it’s advertised as a loan to help with unexpected expenses or home repairs—although home equity loans can also be used for other purposes as well.

• Loan-to-Value Ratio: You can borrow up to 89.99% of the value of a primary residence or 70.99% of the value of a manufactured home or vacation property. The minimum loan amount is $15,000, and the maximum is $1 million for primary residences and $250,000 for vacation homes.
• Interest Rates: You can choose a variable rate loan, but the CHOICE Loan segment also features a fixed interest rate. Rates vary depending on credit, location, and other factors but start as low as 4.99% and won’t exceed 15.90%. There are autopay discounts.
• Fees, Expenses, and Anything Else to Know: There are no application fees or closing costs, however, if you close your account within 36 months after opening, you will have to reimburse M&T for certain fees.

2) Figure

LendEDU Rating: 4.56/5

Figure is different from other lenders on the list because it was created to provide a “new way” of borrowing that’s faster, simpler, and more transparent. Figure is technology-driven and offers both home equity lines of credit as well as lease backs for people who want to sell their home and continue to live in it for as long as they want. For those looking for home equity loans, it also offers some unique features including same-day approvals and funding of your loan within just five days. 

• Loan-to-Value Ratio: You can borrow up to 95% of your home value.
• Interest rates: Rates start as low as 4.99% for a variable rate APR. You can get pre-qualified and find out your rate without affecting your credit score. Rates go as high as 13.74%.
• Fees, Expenses, and Anything Else to Know: Figure charges a low original fee and no ongoing fees for the HELOC. You’ll make fixed monthly payments on your loan and can qualify for same-day approval as well as funding within just a five-day period of time.

3) Regions Bank

LendEDU Rating: 4.37/5

Regions is headquartered in Birmingham, Alabama and offers retail and commercial banking services as well as mortgage services, trusts and stockbrokerage services. In addition to a home equity line of credit, you can also get a savings secured line of credit or choose from several unsecured lines of credit including a Regions Credit Line or a Regions Preferred Credit Line. Rates and terms on HELOCs are competitive.

• Loan-to-Value Ratio: You can borrow up to 80% of the value of your home.
• Interest Rates: You can qualify for a .99% introductory APR on a variable interest rate loan for six months, after which the variable rate applies. The rates for a variable rate loan are between 5.25% and 12.65% APR.
• Fees, Expenses, and Anything Else to Know: There are no annual fees for a HELOC from Regions, and you also have options for bank-paid closing costs so you can borrow without incurring any closing costs. There are also options to get a loan within a line of credit and you can convert the balance of your HELOC into a fixed rate loan.

4) SunTrust

LendEDU Rating: 4.24/5

SunTrust is a financial institution headquartered in Atlanta. There are many brick and mortar locations throughout the Southeast and Mid-Atlantic states, and SunTrust has total assets of around $208 billion. A SunTrust HELOC is competitive in terms of both rates and fees.

• Loan-to-Value Ratio: You can borrow up to 70% of your home’s value to qualify for advertised promotional rates.
• Interest Rates: SunTrust offers both fixed and variable rate loans. Standard rates on a variable rate mortgage range from 5.25% to 6.72%. There is also a promotional rate of 3.99% for 12 months on initial advances of $25,000 of more. Rates are based on many factors, including the prime rate, the combined loan-to-value ratio, repayment periods, and your credit. There is a maximum APR of 16% in some states and 18% in other states. 
• Fees, Expenses, and Anything Else to Know: There are no closing costs with SunTrust HELOCs as long as the account is open for at least three years.

5) PNC

LendEDU Rating: 4.19/5

PNC is the ninth largest U.S. bank based on assets and the fifth largest bank based on the number of branches. It operates in a total of 19 different states and Washington D.C. and it offers a full array of banking services and financial products including home equity loans.

• Loan-to-value: You can borrow up to 89.90% of the value of your home.
• Interest rates: Interest rates start at 5.00% and borrowers have two different choices of payment options on variable rate HELOCs. Options include paying interest-only or paying principal and interest at 1/360th of the principal balance in the variable rate part along with interest and fees. You can also opt for fixed rate lock payment options.
• Fees, Expenses, and Anything Else to Know: A home equity line of credit from PNC has no application fee, and an appraisal fee is not required in most circumstances. It also come with an annual fee of $50, and Georgia residents must pay an additional $10 GA Residential Mortgage Act Fee.

6) BB&T

LendEDU Rating: 4.17/5

BB&T has a history dating back to 1872. It’s one of the largest financial services companies in the U.S. BB&T works to provide HELOCs that are flexible and only require a simple application process.

• Loan-to-Value Ratio: You can borrow up to 100% of the value of your home.
• Interest Rates: BB&T is currently advertising introductory rates as low as 3.99%. This is for a loan with a variable APR. The introductory rate is guaranteed for 12 months with an initial draw of $15,000 or more at closing. When the promotional rate expires, rates are advertised as low as 5.24%. Rates for the variable APR for the life of the credit line equal the prime rate minus 0.26%.
• Fees, Expenses, and Anything Else to Know: BB&T also offers fixed rate loan options and flexible monthly payment options including interest-only payments or 1.5% of the outstanding balance. BB&T also offers a no-closing-cost option.

7) Citizens Bank

LendEDU Rating: 4.03/5

Citizens Bank is the 23rd largest bank in the United States. It was first established in 1828 as the High Street Bank in Providence, Rhode Island, and today it operates in Connecticut, Delaware, Maine, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. It offers a full array of different financial products including home equity loans and lines of credit at competitive terms.

• Loan-to-Value Ratio: You can borrow up to 85% of the value of your home
• Interest Rates: Interest rates start at 4.75%. You can also save .25% off your rate if you set up autopay from a Citizens Bank checking account. Lines above $100,000 have the lowest rates and the most flexibility in your draw schedule.
• Fees, Expenses, and Anything Else to Know: HELOCs from Citizens Bank come with a 15-year repayment term. You also have the option to choose interest-only payments or to pay principal and interest during the 10-year borrowing period. There’s no set up or appraisal fees but there is a $50 annual fee waived the first year and a $350 pre-payment penalty fee if you close your HELOC within the first 36 months of opening the account.

8) Wells Fargo

LendEDU Rating: 3.92/5

Wells Fargo provides banking products and services, including mortgages, to individuals and businesses. Wells Fargo offers HELOC products with competitive rates and the opportunity to qualify for relationship discounts.

• Loan-to-Value Ratio: You can borrow up 85% of the equity your home.
• Interest Rates: Wells Fargo HELOC rates are based on prime rates and there are caps. Currently, variable APRs range from 5.00% to 10.25%. To get the lower rates, you’ll need good credit. For variable rate loans, the rate won’t ever go more than 7% higher than it was when you started. During the draw period, borrowers can change all or part of their variable-rate balance into a fixed rate.
• Fees, Expenses, and Other Things to Know: There are no fees associated with Wells Fargo’s HELOCs. Lower rates and discounts are available for people with eligible Wells Fargo accounts. The minimum draw is $300, except for in Texas, where the minimum draw is $4,000.

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How We Chose the Best Home Equity Lines of Credit

To find the best home equity lines of credit, our Editorial Team analyzed each product by APR (Annual Percentage Rate) (15%), loan amounts (15%), maximum “LTV” which is the ratio of your loan to the value of your home (10%), states available (5%), annual fee (15%), application fee (5%), closing/origination fees (10%), how long it takes to receive your money (10%), Better Business Bureau rating (5%), JD Power score (10%).

Learn more about our ratings and methodology here.

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How Do Home Equity Lines of Credit (HELOCs) Work?

A home equity line of credit is one of the most common loan options for people to tap into the equity they have built in their home. When someone applies and is approved for a home equity line of credit, they receive a flexible credit line.

It’s like a credit card in many ways, because it’s not an installment loan, like a home equity loan, which you receive in a lump sum. With an installment loan, the borrower pays set payments each month, and these monthly payment amounts remain the same. With a HELOC, homeowners have access to credit if they need it, and they then make payments on the HELOC balance as they use it.

While HELOCs function like a credit card, they do tend to have lower interest rates because the home is being used as collateral. With credit cards, there is nothing securing the debt. With that being said, the benefits of HELOCs over credit cards are dependent on the qualifications of the homeowner applying and the amount of equity they have in their home.

An Example:

If someone has a home with a market value of $500,000 and they owe a remaining $300,000 on their mortgage, they then have equity of $200,000.

Most HELOC lenders will base the amount of credit they offer on a specific percentage of the loan-to-value ratio. The percentage is often anywhere from 80 to 90 percent. If the bank in this specific example would offer a home equity line of credit for up to 90 percent, the homeowner would then have access to $180,000. This is 90 percent of the equity they have in their home.

There are reasons lenders limit the amount of equity that can be used for a home equity line of credit. It reduces their level of risk, but it also protects the homeowner.

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HELOC Pros & Cons

Before you decide whether to get a HELOC, it’s important to weigh the pros and cons. Here’s what to consider.

Benefits of Using a HELOC

The following are some of the advantages of a HELOC as a funding source:

• A HELOC allows you to essentially borrow what you need at the time you need it
• ​HELOCs often have lower interest rates and better terms than credit cards, but also the versatility that comes with revolving credit
• Using a HELOC to pay off student loan debt may save you money depending on your situation
• ​HELOCs are a simple way to manage unexpected expenses, such as home repairs
• ​It’s possible to secure a HELOC now, and then you will have access to funds later if you need them for any reason
• There are tax benefits associated with HELOCs—for example, some of the interest paid on a HELOC may be tax deductible provided that the money is being used for home renovations or repairs

Downsides of Using a HELOC

HELOCs aren’t right for everyone. Some of the downsides of using a HELOC include:

• ​When you use a HELOC, you’re using your home as collateral. If you were to default on the loan, it could mean losing your home
• ​HELOCs mean you’re more likely to accumulate more debt than you need
• There is also a sense of uncertainty with HELOCs because if the value of your home changes, you might have a reduction in the amount of credit available to you. The lender could also freeze the available credit altogether

If you weigh the pros and cons and ultimately decide a HELOC is the right choice for you, make sure you compare lenders, because they tend to vary in what they offer, particularly with promotional offers.

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Alternative Options and Resources

If you aren’t sure if a home equity line of credit is right for you, check out our Best Home Equity Loan Rates page to find other options that may work for your situation.

For additional resources, check out the list below:

• Home Equity Loans With Bad Credit
• Banks That Offer Fixed Rate HELOCs
• Bank of America Home Equity Line of Credit Review
• Chase Home Equity Loans Review
• How to Get a Large Home Equity Line of Credit
• HELOC vs. Home Equity Loan
• Are Home Equity Loans Tax Deductible?
• HELOC vs. Personal Loan for Small Home Improvements
• What Does Dave Ramsey Think About Home Equity Loans?
• Alternatives to Home Equity Lines of Credit
• Non-Recourse vs. Recourse Loans