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Home Equity Home Equity Loans

Best Home Equity Loans

Home equity loans and fixed-rate home equity lines of credit (HELOCs) can provide ready cash to cover home improvements, debt consolidation, or other expenses. Home equity loans provide a hefty lump sum, while HELOCs offer access to a revolving credit line.

We reviewed home equity lenders to narrow down the top choices. Keep reading for the best home equity loans and fixed-rate HELOCs on the market.

Company
Best for…
Rating (0-5)
Best overall
4.9
Comparison shopping
4.5
View Rates
NMLS #1136 Terms and Conditions apply.
Military members
3.9
Accessing 95% of your equity
3.6

Reviews of the 4 best home equity loans

We considered interest rates, loan amounts, funding speed, credit score requirements, and more to find the best home equity loans. Read more about our picks below.

Figure

Best Overall

4.9 /5
LendEDU Rating

Why Figure is one of the best

Figure is our top pick for home equity financing. Its HELOCs come with fixed rates, which allows for predictable monthly payments and easy budgeting. Fixed rates also eliminate concerns about potential future rate hikes, making your loan more expensive.

You can borrow up to $400,000 with a Figure HELOC and draw from your credit line for five years. Once approved, you could access your line of credit in as little as five days.

Figure charges origination fees up to 4.99%, and it requires a 100% initial draw. However, Figure offers among the lowest average HELOC rates. You can also check your rates without affecting your credit score.

  • All HELOCs come with a fixed rate
  • 100% online application and appraisal
  • Receive funds in as little as five days
  • Redraw up to 100% of your funds
  • Check your rate without affecting your credit score
  • Charges an origination fee
Rates (APR)7.55%16.25%
Loan Amounts$20,000 – $400,000
Repayment TermsDraw: 5 years / Repayment: 5, 10, 15, or 30 years
Eligibility requirements

Figure’s requirements to be approved for a HELOC include:

Applicants:

  • Have a credit score of 680 or above.
  • Name must appear in the country records as the property owner.
  • Must be employed, self-employed, or retired.

Properties:

  • Be a single-family residence, townhouse, planned urban development (PUD), or condo.
  • Can be the applicant’s primary or secondary residence.
  • No title change in the preceding 90 days.

LendingTree

Best for Comparison Shopping

4.5 /5
LendEDU Rating

Why LendingTree is one of the best

LendingTree stands out as a top choice for home equity loans due to its extensive network of lenders, which allows borrowers to receive multiple loan offers by filling out a single application.

Borrowers can choose from various loan amounts, from $10,000 to $2 million, and various repayment terms that suit their financial needs. Whether looking for a HELOC with a draw period or a traditional home equity loan for a lump sum, LendingTree provides options to meet diverse financial goals and circumstances.

  • Compare multiple lenders with one form
  • No costs
  • No impact on your credit for checking offers
  • Only includes offers from its partners
Rates (APR)Varies by lender
Loan Amounts$10,000 – $2 million
Repayment TermsVaries by lender
Eligibility requirements

LendingTree itself doesn’t have any set eligibility requirements. However, it says most lenders require a minimum credit score of 620, a debt-to-income ratio below 43%, and a loan-to-value ratio below 95%.

Best for Military Members

3.9 /5
LendEDU Rating

Why Navy Federal is one of the best

Navy Federal Credit Union offers home equity loans and lines of credit for military servicepeople, Department of Defense civilian personnel, and their families. If you’re not yet a Navy Federal member, you can join by opening a savings account and maintaining a $5 balance.

When you join the credit union, you’ll enjoy exclusive benefits like high loan limits and competitive rates on home equity financing. Navy Federal lets you borrow up to 100% of your equity, and you won’t pay origination fees, application fees, or closing costs.

Navy Federal HELOCs have a 20-year draw period, letting you access your credit line for a longer period. Funding can take 45 to 55 calendar days, however.

  • No closing costs
  • Borrow up to 100% of your home’s equity
  • No application or origination fees
  • Only available to military members and family members
  • Doesn’t disclose the highest possible interest rate
Rates (APR)Starting at 7.34%
Loan Amounts$10,000 – $500,000
Repayment Terms5, 10, 15, or 20 years
Eligibility requirements

Because Navy Federal is a credit union, you must become a member before applying for any product it offers. To become a member, you must be a veteran, retired service member, or Active Duty. Immediate family of current members are also eligible to join.

Navy Federal doesn’t disclose any eligibility details for its home equity loan, so you’ll need to speak to a representative or submit an application to find out more.

Spring EQ

Best for Accessing 95% of Equity

3.6 /5
LendEDU Rating

Why Spring EQ is one of the best

Spring EQ offers both home equity loans and HELOCs—and you can apply for both using the same application. 

Repayment terms extend up to 30 years, and the lender accepts a 95% loan-to-value (LTV) ratio for borrowers with a 700 or better credit score. This allows you to borrow up to $500,000 against your equity, making Spring EQ one of the best places for home equity loans.

Spring EQ doesn’t list its home equity loan or HELOC rates on its website, so you’ll need to start a prequalification application to see your estimated rates. You must have a minimum 640 credit score and debt-to-income ratio (DTI) under 50% to get approved.

  • Access up to 95% of your home’s equity
  • Check your eligibility for both a home equity loan and HELOC
  • Limited information available outside of its online application
  • Funds take 21 business days, on average
Rates (APR)Starting at 9.50%
Loan Amounts$25,000 – $500,000
Repayment Terms5 – 30 years
Eligibility requirements

Spring EQ doesn’t provide much eligibility information on its website, but we’ve confirmed that applicants need a minimum credit score of 640, and the property can be owner-occupied or a secondary home.

What bank has the best home equity loan?

Choosing where to borrow a home equity loan is a highly personal decision, so you need to first determine which qualities or features you deem most important. Potential factors to evaluate include:

  • Customer service accessibility: Are you comfortable engaging with your lender completely online, or do you want the ability to visit a physical branch?
  • Appraisal process: An in-depth, in-person appraisal might be more thorough than a digital one, but it can take more time and planning. You also need to consider how comfortable you are with learning how to complete a digital appraisal.
  • Application and funding speed: How quickly do you need your loan? And how long of an application are you willing to complete?
  • Multiple product options: Online lenders might specialize in home equity financing, while banks and credits are more like one-stop shops that can fulfill multiple financial needs at once.

All of these elements work together to cultivate your lending experience, and all of them play a role in helping you select the right bank or lender. You’ll also want to consider these standout features from our recommendations to help you decide:

LenderFeatures
FigureDigital appraisal process
Spring EQ95% LTV limit
Navy Federal Credit UnionExclusive member perks and discounts

How to get the best rates for home equity loans

Finding the best home equity loan rates involves both improving your financial picture before you apply and applying strategically. Ideally, you’ll wait to apply for a home equity loan until you’ve done the following:

  • Reviewed your credit reports: You can pull your credit reports for free once a week. When you do, check for errors and dispute any you find. Make note of high balances, and work to reduce those as soon as possible.
  • Lowered your DTI: Paying down your debt will reduce your overall DTI. Showing lenders that you not only manage debt well but that you don’t carry much debt at all can boost your approval odds.
  • Monitored your credit score: Ask your bank or credit card issuer if it offers free credit score reporting. Check your score as often as you’re able, and when it’s high enough to qualify for decent rates (usually 640 or above), start prequalifying.
  • Checked your rates with multiple lenders: Along those lines, you should compare rates with at least four or five lenders. Many let you see your rates with a soft credit check. Hold off on a full application until you’ve found rates that suit your budget.

If you’re not happy with the rates you see during the prequalification process, wait a few weeks and try again. Home equity loans aren’t funded overnight anyways, so there’s no harm in extending the process to ensure the most savings.

Your LTV is also a consideration. Use our home equity loan calculator to estimate your LTV and how much of your equity you can borrow. If your LTV is above 85%, work on reducing your mortgage balance or increasing your property value before you apply for a home equity loan.

Do I qualify for the best home equity loans?

Home equity loan limits and rates vary by lender and by borrower. For that reason, the best home equity loan is the one that gives you the lowest rate, best repayment terms, and highest borrowing amount for your credit profile

There’s no single minimum credit score that can qualify you for the best home equity loan offer, but the higher your score, the easier it may be to get approved and qualify for the lowest rates. 

Rates aren’t the only factor to consider, however. When considering loan options, it helps to weigh the following:

  • Borrowing amounts: Do you need a small home equity loan or a larger one? Does your lender have a set minimum loan limit? Prioritize loans that let you borrow enough without forcing you to take on more debt than necessary.
  • Added fees: Will you have to pay origination fees or annual fees? What about closing costs? Home equity loan fees can substantially increase your borrowing cost, so prioritize lenders that minimize these extra charges.
  • Funding times: How soon do you need your loan? Are you willing to sacrifice a lower rate for quicker funding? If not, can your lenders of choice offer digital or drive-by appraisals that can shorten the underwriting period and allow faster access to cash?

Because loan offers are so subjective, the best home equity loan for you may not be the best for someone else. Wait to apply until your credit and DTI are in a healthy place, then prioritize home equity loans and HELOCs that best meet your individual needs.

Is a home equity loan my best option?

Home equity loans and fixed-rate HELOCs aren’t the only way to borrow money when you need cash. It may be beneficial to compare these financing tools to variable-rate HELOCs, personal loans, or credit cards for getting funds if you’re unsure which is right for you. 

The best home equity loan and fixed-rate HELOC alternatives include:

  • Variable-rate HELOCs: A variable-rate HELOC could be a better choice if you want the opportunity to take advantage of fluctuating rates. If interest rates go down, your variable HELOC rate should decrease, too. You run the risk of rates going up, but if you get a variable-rate HELOC with a fixed-rate conversion option, you’ll have ultimate flexibility.
Table showing the major differences and similarities between a HELOC and a home equity loan
  • Cash-out refinance: With a cash-out refinance, you replace your first mortgage with a larger one and pocket the difference in cash. The upside to cash-out refinancing is that you only make one payment instead of two like you would with a home equity loan or HELOC. The downside is that you extend your mortgage term.
  • Personal loans: Like home equity loans, personal loans allow you to borrow a lump sum. The main difference between these loans is that personal loans don’t require you to offer your home as collateral, making them a solid option if you don’t have enough equity in your home or if you don’t want to risk losing your assets. 
  • Credit cards: You might consider using a credit card to cover expenses if you don’t need to borrow much. Credit cards could allow you to earn substantial rewards or cash back, but credit card APRs can be significantly higher than rates on home equity loans and HELOCs. Tread carefully if you won’t be able to pay down your balance quickly.

Comparing rates for different financing types against the home equity loan rates can give you a better idea of what you might pay to borrow. You can also estimate monthly payments to see which is the best fit for your budget. 

How to apply for a home equity loan

Applying for a home loan isn’t much different from applying for a primary mortgage. Knowing what to expect can make the process smooth. 

These are the steps to apply with most lenders.

  1. Compare rates. Before you submit a home equity loan application, it’s wise to shop around and see what kind of rates lenders are offering. Look for lenders that allow you to get a rate quote without affecting your credit score.
  2. Choose a lender. Once you’ve compared rates and loan terms, it’s time to choose a lender. If you’re weighing a bank against an online lender, keep in mind that online lenders may offer a streamlined application process and faster funding. 
  3. Organize your documents. You’ll need certain documents to apply for a home equity loan, including recent pay stubs, bank statements, and last year’s tax forms. Getting these together before you apply can save time later. 
  4. Submit the application. Many lenders will allow you to apply for a home equity loan online. You must include information about your home, mortgage, income, debts, and assets. The same is true if you’re applying for a home equity loan in person at a bank.
  5. Complete the appraisal if necessary. Your lender will let you know if it requires an appraisal for a home equity loan. If so, the lender will tell you what kind of appraisal it wants, when the appraiser will schedule it, and what you’ll pay for it. 
  6. Review loan terms. Assuming that you’re approved for a home equity loan, you’ll have a chance to review the loan terms before signing off. That’s your opportunity to ask questions or get clarification before committing to the loan. 
  7. Close on the loan. If all the loan terms are acceptable, the final step is signing the closing paperwork. Once your paperwork is complete, the lender can release the loan funds to you. If you’re looking for a fast home equity loan, it’s wise to check funding speeds before choosing a lender.

FAQ

How does a home equity loan work?

A home equity loan works by allowing you to borrow a lump sum using your home’s equity as collateral. You pay back the loan with interest according to a schedule your lender sets. Home equity loans are also known as second mortgages. 

What’s the average home equity loan rate today?

As of April 2024, home equity loan rates are starting around 8% and HELOC rates around 9%. Pinning down an apples-to-apples comparison to your home equity loan rate is difficult because rates vary from lender to lender, loan to loan, and state to state. 

A rule of thumb when comparing home equity loan rates is to look at 30-year fixed-rate mortgages. Home equity loan rates are often higher than primary mortgage rates because they present more risk to lenders.  

How do I know whether I got a good home equity loan rate?

The easiest way to gauge whether you have a good home equity loan rate is to shop around. Reviewing rates for home equity loans with similar terms at other lenders can give you a framework for understanding where your rate falls in the range. 

Do interest-rate hikes affect my home equity loan rate?

Interest rate hikes can affect variable-rate loan products. If your home equity loan has a fixed interest rate, a rate hike won’t trigger an increase. However, if you choose a variable-rate home equity loan or HELOC, rate hikes could make your loan more expensive. 

Are there limitations to how I use a home equity loan?

Most lenders allow for flexibility in how you can use a home equity loan or line of credit. Common uses for home equity loans include debt consolidation, home repairs or improvements, emergencies, large purchases, and major expenses, such as a wedding. 

How long does it take to get funds from a home equity loan?

The waiting period to get funding once approved for a home equity loan can vary from one lender to the next. Online lenders, for example, may provide funding in a few business days. At traditional banks and credit unions, on the other hand, you might wait a few weeks for loan funds to be disbursed. 

How do home equity loan rates compare to HELOCs or personal loans?

Both home equity loans and HELOCs turn your home equity into cash. The primary difference between them is that home equity loan funding is one-and-done (much like personal loans), while HELOCs give you ongoing access to credit.

Interest rates vary between each financing product, as well. Home equity loan rates tend to be fixed, and HELOC rates are often variable. Every now and then, you’ll find a lender like Figure that offers borrowers the best of both worlds with fixed-rate HELOCs.

Personal loan rates can be as low as home equity loan rates, but it’s not unusual to see APRs in the 10% to 30% range. That’s partly because personal loans aren’t always secured with collateral, whereas home equity financing always involves collateral.

How we chose the best companies for home equity loans

Since 2018, LendEDU has evaluated home equity companies to help readers find the best home equity loans and HELOCs. Our latest analysis reviewed 850 data points from 34 lenders and financial institutions, with 25 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These data points are organized into broader categories, which our editorial team weights and scores based on their relative importance to readers. These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Higher star ratings are ultimately awarded to companies that create an excellent borrower experience. This includes offering online eligibility checks, cost transparency, competitive interest rates with no fees, flexible repayment plans, and unique benefits that support borrowers throughout repayment.

Recap of the best lenders for home equity loans

Company
Best for…
Rating (0-5)
Best overall
4.9
Comparison shopping
4.5
View Rates
NMLS #1136 Terms and Conditions apply.
Military members
3.9
Accessing 95% of your equity
3.6