Discover: 2025 Home Equity Review

Discover overview

Discover is probably best known as one of the largest card issuers in the U.S., cementing its position as a cash rewards pioneer when it launched its namesake credit card in 1986. In addition to the Discover card, parent company Discover Financial Services offers a variety of financial products, including home equity loans, which it launched in 2013.

Pros and cons of Discover

How Bankrate scored Discover

Affordability: 5/5

• APR: Discover's website provides a range of possible APR rates for home equity loans. At the time of this review, Discover’s minimum quoted APR was below the national average.
• Fees: Discover doesn't require cash at closing or origination, nor a prepayment penalty, application or appraisal fees. as well as application and appraisal fees. Also, be prepared to be charged if your payment is late or sent back due to insufficient funds. 

Discover earns a 5 out of 5 for affordability due to its competitive APR and the absence of closing, origination, appraisal and application fees.

Availability: 4.2/5

• Credit score: Discover’s minimum 680 credit score is 40 points higher than the minimum most lenders require; six-figure loans require an even higher score, of at least 700.
• Loan minimum: Discover’s home equity loans start at $35,000, a bit high compared to the $5,000-$20,000 minimums other lenders set. Homeowners can also borrow up to 90 percent of the equity in their home.
• Loan products: Discover offers first-lien and second-lien home equity loans with 10-, 15-, 20-, and 30-year terms — a pleasantly wide array of options. However, loans are the only product Discover carries (it does not offer home equity lines of credit, or HELOCS). 
• Where to find: Discover’s home equity loans are available in every U.S. state except Maryland and Iowa.  

Discover offers flexible home equity loan term lengths and the ability to tap almost all of one’s home equity, but these strengths are offset by a high loan minimum and the absence of HELOCs, which pull it down to a 4.2 out of 5 for availability. 

Borrower experience: 2.9/5

• Transparency: Discover posts a range of possible home equity loan rates on its website. Once starting the application process, you will be given a personalized quote.  
• Convenience: Discover doesn’t have any branch locations, so you will have to apply for a home equity loan online or on the phone.  
• Customer service: Discover’s customer service team is available online or by phone every day of the week, even on weekends. 

You can reach Discover’s customer service team online or on the phone every day. However, the company’s inability to offer in-person service or a dedicated loan officer (see “What consumers say,” below) pulls down its score to 2.9 out of 5.

Discover’s reputation

Discover Bank has an A+ rating from the Better Business Bureau. For the second year in a row, the company ranked second in J.D. Power’s 2024 U.S. Consumer Lending Satisfaction Study, which measures customer satisfaction with consumer loan companies. 

What consumers say about Discover

On Bankrate, customers say applying for a Discover loan was “as easy as it could be,” their rates were competitive and the customer reps were top-notch. However, some customers expressed frustration at the lack of an assigned loan officer: “Be prepared to speak to a different person just about every time you call in.”

Discover home equity products offered  

Discover offers home equity loans between $35,000 and $300,000 with 10, 15, 20 and 30-year repayment terms.

How to qualify for a home equity loan with Discover 

Discover requires borrowers to have a FICO credit score of at least 680 to qualify for a home equity loan, as well as a history of responsible credit use and verifiable employment and income. There’s also a maximum debt-to-income (DTI) ratio — your monthly debt payments divided by your monthly gross income — of 43 percent.

Between your first mortgage and a Discover home equity loan, you can have a combined loan-to-value (CLTV) ratio of up to 90 percent (although the loan amount with that ratio is capped at $200,000). There are no minimum assets needed to close on the loan.

How to apply for a home equity loan with Discover

You can apply for a home equity loan with Discover online or by phone at 855-361-3435. Its customer service team is available Monday through Friday from 8 a.m. to midnight ET or Saturday or Sunday, 10 a.m. to 6 p.m. ET.

Discover requires borrowers to have a FICO credit score of at least 680 to qualify for a home equity loan, as well as a history of responsible credit use and verifiable employment and income. There’s also a maximum debt-to-income (DTI) ratio — your monthly debt payments divided by your monthly gross income — of 43 percent.

Between your first mortgage and a Discover home equity loan, you can have a combined loan-to-value (CLTV) ratio of up to 90 percent (although the loan amount with that ratio is capped at $200,000). There are no minimum assets needed to close on the loan.

• Methodology

  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:

  • Affordability: Annual percentage rate (APR) - 80%; introductory APR - 20%
  • Availability: Licensing - 50%; credit score - 20%; loan minimum - 10%; draw requirement - 10%; loan products - 10% 
  • Borrower experience: Rate transparency - Rate transparency - 35%; convenience - 35%; customer service - 20%; fixed-rate options - 10%

  Learn more about our methodology.