Lower Home Equity Review

View Rates

LendEDU editorial rating: 3.8 out of 5

• Up to 95% loan-to-value
• Refi for Life program waives fees to refinance your Lower loan with Lower
• Not available in all 50 states

Lower’s home equity line of credit (HELOC) can give you access to a revolving line of credit that lets you borrow against the equity in your home. Think of it like a credit card but with your home as collateral. 

Lower brings notable features to the table, such as its high 95% loan-to-value ratio (LTV), but it doesn’t earn a best-for designation. With an editorial rating of 3.8, Lower trails several competitors. Our “best for” HELOCs all boast ratings between 4.2 and 4.9. This indicates that although Lower is a solid option, it may not excel in particular areas that would make it the best choice for a specific group of borrowers. 

And what does an editorial rating of 3.8 mean for you? It’s a signal that Lower offers a decent, but not exceptional, HELOC product. It might lack certain perks or advantages its top-rated competitors offer, but it brings several worthwhile benefits for prospective borrowers to consider. Read this Lower HELOC review because it unpacks the essential details you’ll want before tapping into your home’s equity.

About Lower

Founded in 2018, Lower is a newer entrant in the home equity space. The company focuses on providing flexible financing solutions, aiming to simplify the process of unlocking your home’s value. 

One of its standout products is a home equity line of credit (HELOC) that allows homeowners to tap into up to 95% of their home’s value—higher than many competitors.

Lower targets homeowners with substantial equity in their homes who are seeking flexible repayment options. With the high LTV and a “Refi for Life” program that waives certain fees on future refinances, Lower might be appropriate for borrowers who plan on long-term home ownership or multiple refinances.

Our take on Lower’s HELOC
Best for	No best-for designation
Editorial rating	3.8 out of 5
Check your rate without affecting your credit.

Lower HELOC at a glance

Here’s a snapshot of what Lower’s HELOC offers. We’ll dive deeper into each of these terms in more detail below.

Terms	Details
Eligible properties	Primary home, secondary home, investment property
Eligible states	42 states plus Washington, D.C. (exclusions listed below)
Rates (APR)	Starting at 8.75% variable
Rate discounts	Not specified
Loan amounts	$15,000 – $350,000
Draw period	10 years
Repayment period	20 years
Repayment assistance	Not specified
Fees	No annual fee 1% origination fee
Unique features	High LTV ratio of 95% Refi for Life program waives fees any time you refinance with Lower

Ineligible states: Alaska, Hawaii, Nevada, New York, Rhode Island, South Dakota, Vermont, and Wyoming

How does a Lower HELOC work?

Thinking of taking out a home equity line of credit with Lower? Here’s more about Lower’s HELOC terms:

• Repayment: You get a draw period of 10 years. During this time, you can withdraw funds as many times as you like, up to your credit line, and opt for interest-only payments or start chipping away at the principal as well. 
  • Afterward, you enter a 20-year repayment period where you can no longer withdraw funds and must begin to make full interest-and-principal payments.
• Loan amounts: You can borrow between $15,000 and $350,000, depending on your home’s market value and your eligibility.
• Rates and fees: Variable APR starts at 8.75%, and Lower charges a 1% origination fee. Lower doesn’t charge an annual fee, but it doesn’t specify any discounts either.
• Refi for Life: Buy or refinance once with Lower, and it will cover the lending fees on your refinances for life, including origination, underwriting, processing, and administrative fees.

Why your home’s market value matters

Your home’s value is crucial here. Lower allows you to borrow up to 95% of your home’s market value, setting it apart from many lenders that cap out at an 80% LTV. 

Lenders use LTV to compare the amount of your loan to the value of the asset you’re using as collateral—in this case, your home. 

How to calculate LTV

If your home appraises for $200,000, and your mortgage balance is $150,000, your LTV is 75%. Get this by dividing the loan amount by the property value and then multiplying by 100: 

($150,000 / $200,000) x 100 = 75%

Lower will likely require an appraisal to establish your home’s market value, but it doesn’t specify the type of appraisal used. The amount you can borrow ties to this value, so it’s an important step in the process.

Who’s eligible for a Lower HELOC?

Ready to see whether a Lower HELOC is in your future? Check out the eligibility criteria in the table below.

Requirement	Details
Eligibility requirements	Primary home, secondary home, investment property
State of residence	Eligible in 42 states and Washington, D.C. (ineligible states listed below)
Maximum loan-to-value	95%
Maximum debt-to-income	Not specified
Minimum credit score	700
Minimum income	Not specified

Ineligible states: Alaska, Hawaii, Nevada, New York, Rhode Island, South Dakota, Vermont, and Wyoming

What are the costs and fees of a Lower HELOC?

A major factor in the overall cost of a HELOC is the APR. Lower’s starts at 8.75%. Rates also affect your monthly payments. 

Lower imposes no annual fees, but it charges a 1% origination fee. You can roll this into your loan amount rather than paying out of pocket upfront.

Lower’s rates are in line with many other lenders, including the best HELOC rates we identified. The origination fee is standard. A high LTV of 95% sets Lower apart, but a higher LTV may lead to higher rates.

Example of HELOC costs

Imagine you borrow $50,000 from Lower at 8.75% APR. 

Note: For simplicity, we used a fixed 8.75% APR for the entire term. But Lower’s rates are variable, so real-life costs could differ based on rate fluctuations.

Example only	Cost details
Borrowed amount	$50,000
APR	8.75%
Monthly interest-only payment (10-year draw)	$364
Total interest paid during draw period	$43,680
Monthly principal + interest payment (20-year repayment period)	$438
Total repayment cost during 20-year repayment period	$105,120
Total repayment cost (estimate)	$148,800

How do you repay a HELOC from Lower?

Lower’s HELOC comes with a draw period and a repayment period. 

• During the 10-year draw period, you have the option to make interest-only payments. You can also choose to make interest-and-principal payments. Interest-only payments will lead to higher total interest payments over the life of the loan.
• After the draw period ends, a 20-year repayment period kicks in, requiring you to pay interest plus principal.

Unlike a home equity loan, where you get a lump sum and repay it in fixed installments, a HELOC gives you more flexibility. You can draw from it as needed, up to your credit limit. Drawing the full approved amount doesn’t change your repayment terms, but it means you’ll accrue interest on the entire amount. This will make your monthly payments higher.

To illustrate what this means, let’s consider a $50,000 HELOC with a variable APR starting at 8.75%.

• Partial draw: Say you draw just $20,000 from your $50,000 credit line. With an 8.75% APR, you would accrue interest on the $20,000 you withdrew, not the full $50,000.
• Full draw: Now, let’s say you draw the full $50,000. The interest accrues on the entire $50,000. Given the 8.75% APR, you’re looking at much higher interest costs than if you just drew $20,000.

Comparison points	Partial draw ($20,000)	Full draw ($50,000)	Difference
APR	8.75%	8.75%	—
Annual interest	$1,750	$4,375	$2,625
Monthly interest	$145.83	$364.58	$218.75

Note: Similar to the example above, these payments assume the interest rate doesn’t change. However, Lower’s rates are variable. The rate wouldn’t change based on how much you withdraw after you’re approved for a certain credit line, so your APR would be the same in both scenarios, and you’d pay more interest on the full draw than the partial.

Drawing the full approved amount doesn’t alter your repayment terms, but it means your monthly payments will be higher due to interest on the full $50,000. In this example, your monthly interest would more than double if you drew the full amount.

Lower doesn’t specify any early repayment penalties, giving you the flexibility to pay off the loan sooner and save on interest.

How does your home’s value affect your terms?

The value of your home plays a pivotal role when applying for a HELOC with Lower. Because HELOCs are secured loans, your home serves as collateral.

Lower offers a high LTV of up to 95%, which means you can borrow a significant portion of your home’s value. A higher home value may enable you to borrow more, while a lower value can limit the amount you’re eligible for. If your home’s value fluctuates while you have the HELOC, it could affect your borrowing power and even risk putting you underwater on your loan.

What does Lower’s appraisal process look like?

Lower may require an appraisal to determine your home’s value. The company doesn’t specify whether the appraisal is in-person or virtual. You’ll likely need to provide documentation about your property for the appraisal. 

Pros and cons of Lower

Pros

• High LTV

  Lower offers an impressive 95% LTV, which is higher than many other lenders.

• Interest-only repayments

  During the draw period, you have the option to make interest-only payments, providing financial flexibility.

• Fee waivers for refinancing

  If you decide to refinance your Lower loan with the same lender, Lower will waive your origination, underwriting, processing, and administrative fees.

• Strong customer reviews

  Lower boasts excellent customer reviews, which can be a reliable indicator of a lender’s service quality.

Cons

• No advertised rate discounts

  Many competitors offer rate discounts, but Lower doesn’t mention any.

• Minimum $15,000 draw

  The minimum draw amount could be excessive, depending on your needs.

• Limited transparency

  The website lacks clarity on loan terms and potential discounts.

• Geographical limitations

  Not all states have access to Lower’s HELOC product.

Lower stands out with its high LTV ratio and flexibility in repayment options. Its strong customer reviews also speak volumes about its services. 

However, it falls short in terms of transparency and rate discounts. We found several HELOC lenders that are more transparent—and they offer rate discounts: 

Lender	LendEDU editorial rating	Best-for designation
Figure	4.9 out of 5	Best overall
LendingTree	4.7 out of 5	Best marketplace
Hitch	4.4 out of 5	Best for fast funding

Is Lower a reputable lender?

Customer reviews serve as real-world testimonials where you can find valuable insights into a company’s reliability and service. 

By considering multiple sources of customer feedback, you can form a more balanced view of whether Lower is a lender you’d want to do business with.

Source	Customer rating	Number of reviews
Trustpilot	4.8 out of 5	2,534
Better Business Bureau (BBB)	4.84 out of 5	1,223
Google	4.9 out of 5	4,356

Ratings collected on September 27, 2023.

Lower’s ratings across multiple platforms are stellar.

On Trustpilot and Google, the company earns nearly perfect scores—along with an A+ rating from the Better Business Bureau. Customer testimonials praise the company’s service quality, helpful agents, and ease of application and closing.

However, no company is without flaws. Lower has had its share of complaints, such as last-minute loan cancellations and criticisms about customer service. 

We’re fans of all three of these websites to get a well-rounded view of companies’ reputations. The BBB independently verifies complaints and ensures companies address them. That Lower has resolved 53 complaints in the past three years on this platform shows how serious it is about customer feedback.

Does Lower have a customer service team?

Lower’s customer service team is based in New Albany, Ohio. The team assists with a range of issues, from answering questions about loan terms to guiding you through the application process. The aim is to make your experience as smooth as possible.

Contact Lower:

• Email: [email protected] 
• Phone: 833-920-2273 (Monday – Thursday, 9 a.m. – 6 p.m. and Friday, 9 a.m. – 4 p.m. Eastern)
• Text: 855-293-1776 (Monday – Thursday, 9 a.m. – 6 p.m. and Friday, 9 a.m. – 4 p.m.)
• You can also use the contact form on Lower’s website

How to apply for a Lower HELOC

Applying for a HELOC with Lower is streamlined and straightforward. The initial steps involve a soft credit check, which won’t affect your credit score. You can prequalify before going through the full application process, giving you an idea of your eligibility without much hassle.

Here’s how to apply for a Lower HELOC:

1. Visit Lower’s website: Click the “Apply now” button.
2. Property details: Input information about the property you’re using for the HELOC.

Source: Lower

3. Contact and financial information: Provide your contact info and additional financial details.

Source: Lower

4. Soft credit check: Lower performs a soft credit pull at this stage that won’t affect your credit.
5. Further steps: If you pass the soft credit check, a representative will contact you. This stage includes a hard credit check and document submission.

The time each step takes can vary based on your circumstances.

What if I’m denied a HELOC from Lower?

If Lower denies your application, it should inform you of its reasons. 

You can reapply, but first, it’s crucial to address the factors that led to the initial denial.

Common reasons for denial and next steps:

• Low credit score: If your credit score is the issue, consider credit repair strategies, including paying down debt and disputing inaccuracies on your credit report.
• High debt-to-income ratio: Reducing debts or increasing income could make you more favorable to lenders.
• Insufficient home equity: You might need to wait for your home value to increase or pay down your mortgage further.
• Unstable employment: Lenders prefer applicants with stable income, so securing long-term employment could help.

These points offer a path for reapplying successfully with Lower or another home equity company.

How do other home equity products compare to Lower’s HELOC?

When weighing your options for tapping into your home’s equity, Lower’s HELOC isn’t the only route. 

HELOCs are similar to home equity loans but are more flexible. Here’s a brief overview:

Feature	HELOC from Lower	Home equity loan
Type of credit	Revolving	Lump sum
Interest rate	Variable	Fixed
Draw period?	✔️	❌
Minimum draw	$15,000	Varies
Repayment options	Interest only during draw period	Fixed monthly payments

Reverse mortgages and cash-out refinances are viable alternatives. 

A reverse mortgage might be suitable for older homeowners who want to turn their home’s equity into cash without monthly repayments. However, it comes with its set of complexities and costs. 

A cash-out refinance replaces your mortgage with a new, larger loan, giving you the difference in cash. This option could be ideal if you want to take advantage of lower interest rates, but it means restarting your mortgage term

Here’s a quick look at major differences between the three:

Feature	HELOC from Lower	Reverse mortgage	Cash-out refinance
Type of credit	Revolving	Lump sum or monthly	Lump sum
Age requirement	None	62 and older	None
Interest rate	Variable	Variable or fixed	Fixed or variable
Monthly repayment?	✔️	❌	✔️
Affects current mortgage?	❌	✔️	✔️

Lower FAQ

How long does it take to receive funds from Lower?

Lower doesn’t disclose its specific timeline for disbursing funds after approving your HELOC. But it’s normal to wait around 30 to 45 days from application to funding. The process includes an appraisal and a hard credit check, which take time.

Do you need to tell Lower what the funds are used for?

Lower doesn’t require you to specify how you plan to use the HELOC funds. You can use them as you see fit, whether for home improvements, debt consolidation, or other personal needs.

Does Lower have any insurance requirements?

According to Lower’s website, you’ll need property insurance. If your home is in a flood-prone area, flood insurance is also a must.

Can you back out of a HELOC contract?

Lower doesn’t disclose this information, but in general, you can back out of a HELOC during various stages of the process. If you’re still in the application phase, no problem. 

Once approved but before fund disbursement, you usually have a three-day right of rescission to cancel without penalties. After funds are disbursed, it gets complicated, and you might incur charges.

Can you close your HELOC account at any time?

Lower doesn’t offer public information about early account closure penalties or conditions. Reach out to Lower for specifics if you think you might need to close your account early.

How we rated Lower

We designed LendEDU’s editorial rating system to help consumers identify companies that offer the best financial products. Our experts spend hours researching these companies each year to ensure our ratings are fresh and accurate.

Our most recent evaluation compared Lower to several HELOC lenders across a number of factors, including rates, loan amounts, customer reviews, repayment details, and eligibility requirements. We weighted, scored, and combined these factors to produce a final editorial rating. This rating is expressed on a scale from 1 to 5, with 5 being the highest possible score. We round all ratings to the nearest tenth decimal place.

Product	Best for	Our rating
HELOC	No best-for designation	3.8 out of 5	View rates