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Home Equity

Best Home Equity Loans

Home equity loans let you borrow against the equity you hold in your house. Compare our picks for the best home equity loan options.

Christy Rakoczy
08/03/2020

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If your home goes up in value, you make a large down payment, or you pay down your mortgage, you build equity in your home. Home equity is the difference between the value of your home and what’s owed on it.

Home equity loans allow you to borrow against the equity in your home, so you can access the cash tied up in your house. They often have lower interest rates compared to other types of debt because the loans are secured by your house.

Lenders have different interest rates, eligibility requirements, and loan repayment periods that you should consider. This guide will help you compare your options and learn more about how home equity loans work.

On this page:

Current Average Lowest Home Equity Rate

4.22%Based on the lowest rates of 6 lenders, as of August 3, 2020

Best Home Equity Loan Companies

Below you will find reviews for our choices for the best home equity loans. You can click a link below to jump down to that lender’s review:

Spring EQ Home Equity Loan

Best: Online lender

Spring EQView Rates

Interest Rates

6.51%+

Terms

10, 12, 15, 20, 30 years

Maximum LTV

95%

Spring EQ operates in 36 states and Washington, D.C. The lender promises fast funding for qualified borrowers, but only home equity loans are available. Some of the key things to know about Spring EQ include the following.

  • Interest rates: Starting at 6.51%
  • Loan limits: $2,000 to $500,000
  • Loan repayment terms: 5 to 30 years
  • Maximum loan-to-value: 100%
  • Fees: Origination fee of $700 to $2,000

TD Bank Home Equity Loan

Best: Bank

TD BankLearn More

Interest Rates

4.39% – 10.26%

Terms

5 – 30 years

Maximum LTV

80%

TD Bank operates in Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and Washington D.C. Some of the key features of home equity loans from TD Bank include the following.

  • Interest rates: Starting at 4.79%
  • Loan limits: $25,000 to $500,000
  • Loan repayment terms: 5 to 30 years
  • Maximum loan-to-value: 80%
  • Fees: $99 origination fee

Discover Home Equity Loan Review

Discover Home Equity LoansLearn More

Interest Rates

4.99% – 11.99% Fixed APR

Terms

10, 12, 15, 20, 30 years

Maximum LTV

95%

Discover makes home equity loans available to borrowers with credit scores of 620 or higher who have verifiable employment and income as well as sufficient home equity. Here are some of the key things that you should know about home equity loans from Discover.

  • Interest rates: Starting at 4.99%
  • Loan limits: $35,000 to $150,000
  • Loan repayment terms: 10 to 30 years
  • Maximum loan-to-value: 95%
  • Fees: None

Regions Bank Home Equity Loan

Regions BankLearn More

Interest Rates

4.125% – 11.75%

Terms

7, 10, or 15 years

Maximum LTV

89%

Regions Bank provides loans to customers in the South, Midwest, and Texas where the bank operates local branches. If you are a Regions customer already and are enrolled in Relationship Rewards, you can earn points for opening a home equity loan with Regions. Some of the key things to know about Regions Bank home equity loans include the following.

  • Interest rates: Starting at 4.125%
  • Loan limits: $10,000 to $250,000
  • Loan repayment terms: 7 to 15 years
  • Maximum loan-to-value: 89%
  • Fees: None

PNC Home Equity Loan

PNC Home Equity LoansLearn More

Interest Rates

Rates as low as 3.74% APR

Terms

5, 10, 15, 20, 25, 30 years

Maximum LTV

89.9%

PNC operates in 2,400 locations in 21 states as well as in the District of Columbia. It offers home equity loans, as well as a home equity rapid refinance product. Here are some key details you need to know about PNC Bank home equity loans. 

  • Interest rates: Starting at 3.74%
  • Loan limits: $1,000 to $150,000
  • Loan repayment terms: 5 to 30 years
  • Maximum loan-to-value: 89.9%
  • Fees: $12 to $250 origination fee may be required

Temporarily suspended.

Navy Federal Credit UnionLearn More

Interest Rates

Rates as low as 5.75% APR

Terms

5, 10, 15, or 20 years

Maximum LTV

100%

Navy Federal Credit Union provides home equity loans to credit union members. You must be a member of the military, a veteran, or a family member to qualify for a home equity loan with Navy Federal Credit Union. Here are some of the key features to be aware of.

  • Interest rates: Starting at 5.75%
  • Loan limits: $10,000 to $500,000
  • Loan repayment terms: 5 to 20 years
  • Maximum loan-to-value: 100%
  • Fees: None

Citizens Bank Home Equity Loans Review

Citizens Bank Home Equity LoansLearn More

Interest Rates

Rates as low as 5.24% APR

Terms

10 – 20 years

Maximum LTV

80%

Citizens Bank is the third largest retail bank in the U.S. It operates in 11 states in the New England, mid-Atlantic, and Midwest regions and offers home equity loans. Here are some key features of Citizens Bank home equity loans.

  • Interest rates: Starting at 5.24%
  • Loan limits: $10,000 to $400,000+
  • Loan repayment terms: 10 to 20 years
  • Maximum loan-to-value: 80%
  • Fees: None

How to Find the Best Home Equity Loan Rates

When shopping for a home equity loan, you should always take steps to try to find the best interest rate possible. This will keep your costs down. Some tips to find the best rates include the following:

  • Monitor changing interest rates: Interest rates can change over time, either because of economic conditions or because financial institutions change the special promotions they offer. Be sure to monitor trends in interest rates and see how rates change over time.
  • Improve your credit before applying: Borrowers with high credit scores are offered loans at more favorable interest rates. Work to improve your credit score by paying down debt, paying bills on time, correcting mistakes on your credit report, and avoiding opening too many new types of credit before getting your home equity loan. (Find out how to qualify for a home equity loan with bad credit)
  • Shop around: There’s often a lot of variation in rates from one lender to another. Compare rates from multiple lenders to find the best deal for your situation. Try to get at least three quotes, but look for lenders that do soft credit checks rather than putting a hard inquiry on your credit report. Too many hard inquiries could hurt your credit.

>> Read More: Home Equity Loan Requirements

Fixed vs. Variable Rates: Which is Better?

There’s no one right answer to whether you should opt for a fixed or variable rate home equity loan.

  • Variable-rate loans are loans with the interest rate tied to a financial index. The rate usually starts below what a fixed-rate loan charges, but could go up or down over time. As the rate changes, your interest payments will change.
  • Fixed-rate loans have the same rate over the life of the loan. While this may be higher than the starting rate on variable rate options, you don’t have to worry about it increasing over time. These loans provide stability and certainty as you’ll know the required monthly payments and other costs upfront.

If you think interest rates could go down in the future, you may opt for a variable rate loan—but you run the risk of your rate going up and payments potentially becoming unaffordable. Variable rate loans could also be a good option if you plan to sell your home soon after borrowing as you could benefit from the introductory low rate and sell before rates go up. However, if you aren’t able to sell the home, you could end up with unaffordable payments.

If you want certainty and to know your costs up front, a fixed rate loan is a safer option.

Home Equity Borrowing Limits

Most banks and lenders do not allow you to borrow 100% of the value of your home. Your combined loans against your home, including mortgages and home equity loans, typically can’t exceed 80% to 90% of the value of your home. This is known as your Loan-to-Value ratio (LTV).

To determine your current home value, banks will want a recent appraisal. You can then borrow a percentage of that market value. If your home appraises for $200,000 and you owe $140,000, the equity in your home is currently worth $60,000.

You can’t borrow the full $60,000, though. If you’re allowed to borrow up to 90% of your home’s value, your total combined loan balances can’t exceed $180,000 (90% of the home’s total value). Since you already owe $140,000, you could only borrow another $40,000.

Lenders may also have maximum or minimum loan balances for their home equity loans, which could limit the amount you’re allowed to borrow as well.

Additional Resources:

Ready to secure a home equity loan? Check out our partner Spring EQ

Spring EQLearn More

Interest Rates

6.51%+

Terms

10, 12, 15, 20, 30 years

Maximum LTV

95%

Author: Christy Rakoczy

Christy Rakoczy
Christy Rakoczy is an experienced personal finance and legal writer who has been writing full time since 2008. She earned her JD at UCLA and graduated from the University of Rochester with a degree in media and communications. Her work has been featured on CNN Money, MSN Money, Yahoo Finance, USA Today, and more.