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

5.63%

Based on the lowest rates of seven lenders, as of September 21, 2022

Companies used to determine the average lowest rate include Figure, M&T Bank, Regions Bank, SunTrust, PNC, BB&T, and Citizens Bank.

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8 Best HELOC Lenders & Rates

If you feel a HELOC is the best choice for your borrowing needs, here are some top lenders to consider. Shopping around for the best HELOC rates is always a good idea. Click on a lender to jump down to its review:

• Best online lender: Figure
• Best bank: M&T Bank
• Best of the rest: Click here

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Figure

Best: Online Lender

Includes autopsy and credit union membership discounts, as well as payment of an origination fee in exchange for a reduced APR. Terms and conditions apply. Visit Figure.com for further details. Figure Lending LLC is an equal opportunity lender. NMLS #1717824

Figure is an online lender that uses blockchain technology which helps improve financial transactions behind the scenes to make them more efficient, secure, and less costly in other areas of its business. Unlike most HELOC lenders that can take weeks to approve you and disburse your funds, Figure can approve borrowers as soon as the same day and disburse your funds in as little as five days.

Another unique benefit of Figure is that the initial amount you draw from the line of credit will be at a fixed interest rate. Each additional draw after that will still be at a fixed rate, but will be calculated based on current market conditions. Unlike most lenders that offer variable rates, you will have predictable monthly payments that won’t change with Figure.

• Minimum credit score: 620
• Max loan-to-value ratio: 95%
• Interest rates: Rates start as low as 4.99% for a fixed APR, which includes a .75% discount for opting into a Quorum membership and enrolling in autopay. This rate also includes payment of an origination fee of 4.99%. You can get pre-qualified and find out your rate without affecting your credit score. Rates go as high as 13.74%.
• Draw period & repayment: Draw period of 5 years, Repayment terms up to 30 years
• Fees, expenses, & anything else: Figure charges a low origination fee of 0% – 4.99% of the initial draw depending on where the property is located and your credit profile but no other upfront or ongoing fees. However, you may be responsible for paying county recording fees as well as a subordination fee if you ever ask Figure to change its lien position.

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M&T

Best: Traditional Bank

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.

• Minimum credit score: Not specified
• Max loan-to-value ratio: 89.99% for a primary residence, 70.99% for a manufactured home or vacation property
• Interest rates: Range from 4.99% to 15.90%. You can choose a variable rate loan, but the CHOICE Loan segment also features a fixed interest rate.
• Draw period & repayment: Draw period of 10 years, Repayment term of 20 years
• Fees, expenses, & anything else: 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.

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Regions Bank

Regions Bank is headquartered in Birmingham, Alabama, and offers a home equity line of credit, a savings secured line of credit, and several unsecured lines of credit.

Rates and terms on Regions’ HELOCs are competitive—especially the introductory APR which is typically very low. You also have the options to get a loan within your line of credit and convert the balance of your HELOC into a fixed-rate loan.

• Minimum credit score: Not specified
• Max 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.
• Draw period & repayment: Draw length of 10 years, Repayment terms up to 20 years
• Fees, expenses, & anything else: 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.

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SunTrust

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. SunTrust’s HELOCs are competitive in terms of both rates and fees.

• Minimum credit score: Not specified
• Max loan-to-value ratio: You can borrow up to 70% of your home’s value to qualify for advertised promotional rates.
• Interest rates: Variable rates range from 3.75% to 4.64%.
• Draw period & repayment: Draw period of 10 years, Repayment term of 20 years
• Fees, expenses, & anything else: There are no closing costs with SunTrust HELOCs as long as the account is open for at least three years.

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PNC

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 lines of credit.

Borrowers have two different payment options on variable rate HELOCs including paying interest-only or paying principal and interest at 1/360th of the principal balance along with interest and fees. You can also opt for fixed payment options.

• Minimum credit score: Not specified
• Max loan-to-value ratio: 89.90%
• Interest rates: Vary based on location and whether you choose a fixed or variable rate
• Draw period & repayment: Draw period of 10 years, Repayment terms up to 30 years
• Fees, expenses, & anything else: There is no application fee and typically no appraisal fee. There is an annual fee of $50 and Georgia residents must pay an additional $10 GA Residential Mortgage Act Fee.

*This APR was provided for someone living within the zip code of 07030.

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BB&T

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.

• Minimum credit score: Not specified
• Max loan-to-value ratio: 100%
• Interest rates: BB&T is currently advertising variable introductory rates as low as 3.99% for 6 months. 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%.
• Draw period & repayment: Draw period of 10 years, Repayment terms not specified
• Fees, expenses, & anything else: 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.

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Citizens Bank

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 offers a full array of different financial products including home equity loans and lines of credit at competitive terms.

• Minimum credit score: Not specified
• Max loan-to-value ratio: 85%
• 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.
• Draw period & repayment: 10-year draw period, 15-year repayment term. You have the option to choose interest-only payments or to pay principal and interest during the draw period.
• Fees, expenses, & anything else: There are no setup 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.

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Wells Fargo

Temporarily suspended.

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. Since Wells Fargo no longer offers a HELOC, you can check out our reviews of Bank of America or Chase for another bank offering a HELOC product.

• Minimum credit score: 620
• Max loan-to-value ratio: 85%
• Interest rates: Variable APRs range from 5.00% to 10.25%. 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.
• Draw period & repayment: Draw period of 10 years plus 1 month, Repayment terms up to 20 years
• Fees, expenses, & anything else: 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 Do Home Equity Lines of Credit (HELOCs) Work?

A home equity line of credit is one of the most common loan options for people that want 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 much 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%. If the bank in this specific example would offer a home equity line of credit for up to 90%, the homeowner would then have access to $180,000. This is 90% 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 Financing Options to HELOCs

If you don’t want to use a line of credit, you may want to consider other home equity financing solutions, such as home equity loans or home equity investments.

Both options allow you to use the equity you’ve built in your home to secure a lump-sum payment that can be used however you’d like.

A home equity loan is more closely related to a HELOC than a home equity investment. These loans generally come with fixed rates and repayment periods between five and 30 years. Borrowers make fixed monthly payments for the duration of the repayment period to pay off the loan.

A home equity investment, on the other hand, is much different. It’s usually for homeowners who aren’t eligible for traditional home equity financing. While your home will still serve as collateral, there are no monthly payments. Instead, homeowners receive a lump-sum payment in exchange for a percentage of their home equity. The investment company will then share in the appreciation or depreciation of your home during the term. In most cases, you’ll be required to make one payment to repay the investment. This can be done with cash, through a mortgage refinance, or a home sale.

For additional resources, check out the list below:

• Home Equity Loans With Bad Credit
• Fixed-Rate HELOCs
• Interest-only HELOCs
• HELOC vs. Home Equity Loan
• Alternatives to Home Equity Lines of Credit

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If you’re ready to get a rate estimate with a HELOC lender, you can do so with Figure, our choice as the best online lender, without impacting your credit.

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