As mortgage rates have moved up in recent years, home equity lines of credit have emerged as a smart option for homeowners who need funds for renovations. A HELOC is a variable-rate home equity product that works like a credit card — you have access to a credit line that you can draw from and pay back as needed.
If you’re in the market for a HELOC, Bankrate has done the homework. We’ve rated dozens of HELOC lenders to find the best deals.
| Lender | Bankrate Score | Current APR | Line of Credit Amount | Best for |
|---|---|---|---|---|
| 4.5/5 | 6.99% (fixed) / 7.75% (variable) | Up to $500,000 | Fixed-rate options | |
| 4.5/5 | 7.67% (fixed) / 8.23% (variable) | $25,000-$1,000,000 | Affordability | |
| 4.5/5 | Starting at 7.625% | $25,000-$500,000 | Flexible membership requirements | |
| 4.5/5 | Starting at 7.24% | $10,000-$300,000 | Rate guarantee | |
| 4.3/5 | Starting at 7.70% | $15,000-$400,000 | Fast funding | |
| 4.2/5 | Starting at 8.20% | $15,000-$750,000 | Low fees at a large bank | |
| 4.2/5 | Starting at 7.49% | Up to $250,000 | Cashback | |
| 4.1/5 | Starting at 7.50% | $10,000-$1 million | Investors |
Note: The above APRs are current as of December 4, 2024. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.
Bethpage is a credit union that serves over 400,000 members. The credit union offers mortgage loans, refinance loans and HELOCs.
BMO is the eighth-largest bank in North America by assets and serves 13 million customers. A sizable financial services institution operating in personal banking, business lending, and capital markets, it recently grew even larger with the acquisition of Bank of the West.
Pentagon Federal Credit Union, or PenFed, serves 2 million members in all 50 states, Washington, D.C., and military bases in Guam, Puerto Rico and Okinawa. This credit union offers competitive rates on its HELOCs, along with other financial services, including credit cards, checking accounts, savings accounts, mortgages and auto loans.
Founded in 1938, Third Federal is still headquartered in its home town of Cleveland, from which it operates throughout half the U.S. Once a traditional thrift, it now offers checking and retirement accounts, as well as real estate loans and savings accounts.
Figure is an online lender that offers HELOCs in 41 states and Washington, D.C. Its rates include an origination fee of up to 4.99 percent and discounts for enrolling in autopay and joining one of its partner credit unions. Its HELOC works a bit like a home equity loan in the beginning: You get the full loan amount (minus the origination fee) with a fixed rate. As you pay off the line of credit, you can borrow funds again up to the limit. These draws will get a different interest rate.
With roots that trace back to 1863, U.S. Bank is now the fifth-largest bank by assets in the country, with about 3,000 branch locations in 27 states. It’s a solid option for low fees at a nationwide lender.
Aven's product isn’t a typical home equity line of credit (HELOC) or loan; it’s a credit card that leverages your home’s equity while rewarding you with cash back on spending. You’ll get a line of credit based on your tappable equity, like a HELOC, and receive unlimited 2 percent cash back on purchases, like a cash back credit card. Aven HELOC borrowers are issued a Visa card backed by Coastal Community Bank, an FDIC-insured institution.
Quorum Federal Credit Union is an online-only credit union, though it does offer shared service centers for in-person transactions. Based in Purchase, New York, it offers a wide range of CDs, checking and savings accounts, along with fee-free access to ATMs.
The 9 lenders featured here rank as “the best” because they had the highest Bankrate Scores, among home equity institutions offering HELOCs.
To determine a home equity lender's Bankrate Score, Bankrate rates lenders on a scale of one (1) to five (5) stars — with five (5) the highest rating — based on a variety of factors relating to the lender's products and services. To assign our ratings, we assessed each mortgage lender across three core areas:
Learn more about our methodology.
HELOC rates are tied to a benchmark interest rate. As the prime rate moves up or down, so does your HELOC rate. Payments vary depending on the interest rate and how much money you have used.
With a HELOC, you take a line of credit that’s available for a set time frame (known as the draw period), usually up to 10 years. While most HELOCs have an interest-only draw period, you can make both interest and principal payments to pay off the line of credit faster.
When the line of credit’s draw period expires, you enter the repayment period, which can last up to 20 years. You’ll pay back the outstanding balance that you borrowed, as well as any interest owed. A lender may allow you to renew the credit line.
When you’re shopping for a lender, you should consider a variety of factors. Among them:
Yes, this is a key part of HELOC underwriting. The lender orders an appraisal of your home to determine its current value. The appraiser’s assessment determines how much equity you have available, which in turn establishes the size of your line of credit. Your lender might get back to you with a preapproval or an initial decision within days; others require you to wait until the whole underwriting process is done.
You typically need a credit score of 620 or higher to tap into your home equity through a HELOC. If you own a home and pay a mortgage, you’re likely well above that threshold. In addition, most lenders also require a combined loan-to-value ratio (CLTV) of 85 percent or less and a debt-to-income (DTI) ratio below 43 percent to approve you for a home equity line of credit.
At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure our content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.
Bankrate analyzes loans to compare interest rates, fees, accessibility, online tools, repayment terms and funding speed to help readers feel confident in their financial decisions. Our meticulous research done by loan experts identifies both advantages and disadvantages to the best lenders.
When shopping for a home equity loan, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date. Check the lenders’ websites to see if there is more recent information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.
