Best HELOC Rates for August 2022

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Your home is your most valuable asset, as the saying goes. And right now, it may be worth more than ever.

Bolstered by rising home prices amid a competitive housing market, the total equity of American homeowners increased by $3.8 trillion year-over-year in the first quarter of 2022, for an annual increase of 32.2%, according to data analytics firm CoreLogic. The average homeowner gained $63,600 in equity over the same period. This increase in home equity, along with a decline in demand for cash-out refinances as mortgage rates surged, has sparked a resurgence of HELOC offerings among lenders, many of whom had dialed back on home equity lending during the COVID-19 pandemic.

If you want to tap into your home equity for cash, a home equity line of credit (HELOC) is a great way to do it. HELOCs have relatively low interest rates compared to credit cards and personal loans, making them ideal for financing large expenses like home improvements, or consolidating high-interest debt. As an open line of credit you can continuously draw upon, HELOCs also provide additional flexibility.

If you want to see how a HELOC can fit into your financial plans, here’s everything you need to get started.

Best HELOC Rates for August 2022

LenderAPRIntroductory APRLine Amount RangeHELOC TermsMax LTV
U.S. Bank5.70% – 18%N/A$15,000 to $750,000, up to $1 million for properties in California10-year draw period, unspecified repayment period80%
TD Bank5.59% – 18% (0.25% TD checking discount included)N/AStarting from $25,00010-year draw period, 20-year repayment period89.99%
Connexus Credit Union4.58% – 15.9%3.57% for 6 months$5,000 – $200,00015-year draw period, 15-year repayment periodNot specified for HELOCs
Spring EQFill out application for personalized ratesN/A$50,000 – $500,00010-year draw period, 20-year repayment period 97.5%
KeyBank4.75% – 18% (0.25% KeyBank client discount included)N/AStarting from $10,00015-year draw period, 15-year repayment period90%
Third Federal Savings & Loan4.74% – 18%N/A$10,000 – $200,00010-year draw period, 20-year repayment period80%
PNC BankFill out application for personalized ratesN/A$10,000 – $1,000,00010-year draw period, 30-year repayment period89.90%
Frost Bank3.74% – 18% (0.25% AutoPay discount included)N/AStarting from $8,00010-year draw period, 20-year repayment period80%
Regions Bank5.75% – 18% (Regions relationship discount included)0.99% for 6 months$10,000 – $500,00010-year draw period, 20-year repayment period80%
Citizens Bank (honorable mention)5.00% – 21% (0.25% AutoPay discount included)N/AStarting from  $17,50010-year draw period, 15-year repayment periodNot specified
BMO Harris Bank (honorable mention)5.69% – 18% (0.50% AutoPay discount included)N/AStarting from $10,000 10-year draw period, 20-year repayment period85%
Flagstar Bank (honorable mention)5.74% – 21.00% (0.5% AutoPay discount included)N/A$10,000 – $1,000,00010-year draw period, 20-year repayment period80%
Truist (honorable mention)Starting from 7.05%N/AStarting from $10,00010-year draw period, 20-year repayment period89.90%
Figure (honorable mention)Starting from 3.99% (0.50% credit union membership discount and 0.25% autopay discount included)N/A$15,000 – $400,0005, 10, 15, or 30 years95%
PenFed Credit Union (honorable mention)5.75% – 18%N/A$25,000 – $1,000,00010-year draw period, 20-year repayment period90%

The APRs shown above are accurate as of August 4, 2022. The NextAdvisor editorial team updates this information regularly, though it is possible the APRs and exact terms of these HELOC offerings have changed since this page was last updated. 

Read more about these HELOC lenders and why we recommend them

What Is a Good HELOC Rate?

The current average HELOC rate for a $30,000 line of credit with a FICO score of 700 and a combined loan-to-value ratio of 80% is 8.54% as of August 4, 2022, according to a survey of lenders by Bankrate (which, like NextAdvisor, is owned by Red Ventures). 

While market HELOC rates may fluctuate based on market conditions and the current broader interest rate environment, the specific HELOC rates you can get will largely depend on your loan-to-value ratio, creditworthiness, and other personal factors. 

The rate you get will usually be given as the prime rate — which can fluctuate — plus a margin, which is set by the lender based on your credit profile. If you have a high credit score and low loan-to-value ratio, you’ll have a better chance of getting a rate on the lower side of a particular lender’s rate range. 

Pro Tip

If you’re looking to borrow against your home equity but want a fixed interest rate and a fixed monthly payment, consider a home equity loan. Home equity loans typically have higher starting interest rates than HELOCs, but the interest rate is fixed for the duration of the loan, giving the borrower more stability. 

What Experts Are Saying About HELOCs in 2022

During the height of the COVID-19 pandemic and the ensuing period of economic uncertainty, it became more difficult to get a HELOC as many lenders tightened their credit requirements or stopped offering home equity lending at all. But now, more than two years after the beginning of the pandemic, lenders are offering HELOCs again. “Credit is much more available on home equity than was the case at the onset of the pandemic,” says Greg McBride, chief financial analyst at Bankrate. 

Lenders are more willing to accept HELOC applications now for two main reasons, McBride explains. “Homeowners have a lot more equity, and there’s a lot less risk for lenders with delinquencies and defaults being low.”

Low mortgage rates, rising demand, and low supply drove up home prices in 2020 and 2021, leaving many homeowners with increased home equity. The average annual gain in home equity per borrower in the first quarter of 2022 was $64,000, according to CoreLogic. Meanwhile, the share of mortgages with negative equity — meaning the loan amount is larger than the amount the house is worth — fell to record lows. 

Aside from increased home equity, there’s another factor that homeowners should take into consideration when deciding whether to get a HELOC this year: rising interest rates.

Mortgage rates reached historic lows during the height of the pandemic, prompting many homeowners to refinance their mortgage to a lower rate or get a cash-out refinance to tap into their home equity. But mortgage rates have steadily increased since the beginning of 2022 due in part to inflation and lenders’ anticipation of the Federal Reserve raising interest rates. Mortgage rates are now higher than they’ve been in more than a decade. “That’s why you are seeing — and will see — a renewed interest in home equity lines of credit,” McBride says. “Because if you’ve already refinanced your mortgage, you’re not going to refinance it again at a higher rate just to get at the equity. You’ll look instead to that second lien, that home equity line of credit, as a way to tap equity.”

It’s important to remember that the broader rate environment will affect HELOC rates as well. Since HELOCs are variable-rate products, it’s important to keep in mind how a rising rate environment like the one we’re currently in could affect your future payments. Before opening a HELOC, make sure your budget is prepared for potential rate increases over the life of your HELOC. Also be sure you know whether your lender has a maximum rate cap, and what it is.  

What’s Happening with HELOC Rates?

Experts expect interest rates to climb through the end of 2022. For HELOCs with variable rates based on the prime rate, an index published by the Wall Street Journal, those changes are fairly easy to predict as the prime rate tends to follow changes in short-term interest rates by the Federal Reserve. Economists expect the Fed to keep raising its benchmark rate to combat the highest inflation in 40 years.

“We’re in a rising rate environment,” Vikram Gupta, head of home equity for PNC Bank, told us. “It’s tied to an index that is going up, ergo the rate will go up.”

The Consumer Price Index, a key measure of inflation, was 9.1% year-over-year in June. Some experts say price growth could start to slow soon. “There are signs that some of the main drivers of inflation are easing, such as lower oil and other commodity prices in July, slower wage growth, and declining supply chain pressures,” Dawit Kebede, senior economist for the Credit Union National Association, said in a statement. “However, service price increases led by housing and pent-up demand for vehicles will keep inflation elevated in the coming months.”

How Does a HELOC Work?

A home equity line of credit (HELOC) lets you borrow against the available equity in your home — just like a home equity loan. Your home is used as collateral, meaning if you default on your payments, the lender can seize your home. 

A HELOC is a type of revolving credit, similar to a credit card. This means you’ll be able to access funds from your HELOC as you need them, instead of taking out a set amount at the onset like an installment loan. There’s usually a minimum withdrawal amount based on the total amount of your credit line. 

HELOCs typically are divided into two periods: a draw period and a repayment period. During the draw period, you may take funds from your HELOC up to the amount of your credit line. On interest-only HELOCs, you’re only required to make monthly payments toward the accrued interest, not the principal, during the draw period. 

Once the draw period is over, you can no longer withdraw money and you enter the repayment period, where you begin paying back both principal and interest. While terms may vary by lender, the draw period typically lasts five to 10 years, while the repayment period usually lasts 10 to 20 years. 

HELOCs traditionally have variable-rate APRs, meaning your interest rate adjusts over time based on the benchmark U.S. prime rate. The prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks, according to the Wall Street Journal

Common HELOC Uses

The funds from a HELOC can be used for virtually any purpose, but some uses are better than others. Some of the most common uses for a HELOC include:

  • Home improvements: Due to their large loan amounts and relatively low interest rates, HELOCs are a popular option to finance home improvements. You can deduct any interest paid on a HELOC (or home equity loan) if it is used to buy, build, or substantially improve the home that secures the loan. 
  • College expenses: HELOCs can be a way to pay for your or your children’s college expenses, but experts recommend maxing out grants and federal student loans — which have much stronger borrower protections — before turning to any private option, including HELOCs. Keep in mind that unlike a student loan, a HELOC is secured by your house, meaning that if you default, you could lose your home. Be sure to weigh the pros and cons carefully before taking this option. 
  • Debt consolidation: If you have high-interest debt, such as credit card debt or high-interest personal loans, you may be able to save on interest if you use a HELOC — which typically has a lower interest rate — to consolidate that debt. Depending on your personal situation, a balance transfer credit card or debt consolidation personal loan may be a better fit for your goals.
  • Other ongoing expenses: If you have other long-term ongoing expenses, such as medical expenses, a HELOC can be a way to finance them. However, depending on the specific need, other options may be able to give you the funding you need without needing to put up your home as collateral. 

Pros and Cons of HELOCS

Pros

  • Usually have lower interest rates than other financing methods like personal loans or credit cards

  • You can withdraw money anytime during the draw period and you only have to pay for the amount of money you actually use, plus interest

  • There are few restrictions on what the money can be used for

  • There are often discounted rate offers for an introductory period

Cons

  • HELOCs can come with a minimum withdrawal amount

  • The interest rate is variable, meaning your interest rate and monthly payment could increase unexpectedly

  • There can be fees associated with a HELOC: annual fees, application fees, appraisal fees, and other closing costs

  • HELOCs are secured by your house, meaning you could lose your home if you default

How to Apply for a HELOC

  1. Know your financial situation. Before you apply for a HELOC, be sure you have a plan for how you’ll use the funds and how you’ll pay it back. You’ll also want to get an idea of your credit score and current loan-to-value ratio, as those factors can influence whether you qualify for a HELOC and what rates you could get.
  2. Research lenders and compare rates. First, narrow your search down to a list of lenders who meet your needs in aspects other than rates — whether that means they have good customer service, in-person branches near you, or simply offer the specific product you’re interested in. Then, compare quotes from the lenders who meet your basic criteria to find the best rate.
  3. Fill out an application. Most lenders offer an online application for a HELOC, although some may require you to visit an in-person branch or apply over the phone. In the application, you’ll typically need to fill out some information about yourself, the house you’re using to secure the HELOC, and your desired credit line amount. 
  4. Complete the verification process. Depending on what information you fill out in your application, you may need to supply additional verification — such as proof of employment or proof of income — to the lender. The lender may also pull your credit score from the credit bureaus as part of your application, which could temporarily lower your credit score by a few points. Some lenders may also require an appraisal of the home you’re using as collateral to assess its value. 
  5. Wait for the HELOC to be approved. After you’ve submitted your application and all supporting documents, you’ll need to wait for the lender to process and approve your application. This typically takes a few weeks to a month. After you close on your HELOC, your line of credit will be open and you can begin withdrawing funds. 

How to Get the Best HELOC Rate

There are several factors you should consider when searching for a HELOC, to ensure you get the best rate: 

  • Your credit score and history: Lenders will pull your credit score to determine your creditworthiness, just as they would for any other type of credit application. Having good credit, or improving your credit before you apply, can increase your chances of getting a more favorable rate.
  • Your home equity: The more home equity you have, the more it will positively affect your loan-to-value ratio (LTV). LTV is a metric used to measure the relationship between how much you owe on your mortgage and the market value of your home. The more equity you have, the lower your LTV will be and the better you’ll look to lenders. 
  • The lender: Different lenders offer different rates. Make sure to shop around and consider all of the options for HELOC rates, and don’t discount local credit unions or banks.

HELOC vs. Home Equity Loan

Home equity loans are another popular type of home equity financing. With a home equity loan, you take out a one-time loan with a set loan amount, loan term, and interest rate, then pay it back in monthly installments. The disbursement and payment structure works much the same as a personal loan, except a home equity loan is secured by your house while a personal loan is unsecured.

Home equity loans can be good if you want to borrow a single, lump sum of cash and you want a fixed monthly payment that won’t change based on market rate changes. 

Here are some other key differences between a HELOC and a home equity loan:

HELOCHome Equity Loan
Revolving credit lineFixed-term loan 
Variable APR (usually) Fixed APR
Pay only what you spendPay full loan amount
Set draw periodFunds for as long as they last
Ongoing cashLump sum at onset of loan

HELOC vs. Cash-Out Refinance

Cash-out refinances are also a common way to tap into your home equity for cash, but they work a bit differently than home equity loans or HELOCs. While home equity loans and HELOCs act as a second mortgage on your home, a cash-out refinance replaces your current mortgage with a new one. With a cash-out refinance, you’ll take out a mortgage with a larger loan amount than what you currently owe, use it to pay off your current mortgage, and pocket the difference as cash.

When mortgage rates were low during 2020 and 2021, cash-out refinancing was the best option for most people to access their home equity. But with mortgage rates now on the rise, cash-out refinances are becoming less advantageous, especially if you’ve already refinanced recently and don’t want to give up your current mortgage rate. But, they can still be a good option in certain situations, so be sure to crunch the numbers to see what’s best for you. 

Here are some other key differences between a HELOC and a cash-out refinance:

HELOCCash-Out Refinance
A second loan on top of your current mortgageReplaces your current mortgage
Variable APR (usually) Fixed APR (except in the case of an adjustable-rate mortgage)
Two monthly payments: one to your HELOC lender, one to your primary mortgage lenderOne monthly payment to your mortgage lender
Does not affect your primary mortgage’s loan termChanges your primary mortgage’s interest rate and resets the loan term
Ongoing cashLump sum at onset of loan

Best HELOC Lenders of August 2022

Editorial Independence

As with all of our home equity loan and home equity line of credit (HELOC) lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.

Good for wide nationwide availability
U.S. Bank
U.S. Bank
Editor’s Score: (4.4/5)
Good for wide nationwide availability
U.S. Bank
Editor’s Score: (4.4/5)
  • Products offered:
    Home equity loan, HELOC, rate-lock HELOC
  • Home equity loan terms:
    Up to 30 years
  • HELOC terms:
    10-year draw period, unspecified repayment period
  • Maximum LTV allowed:
    80%

NextAdvisor’s Take

Pros
  • Rate discount for setting up autopay from a U.S. Bank checking or savings account (home equity loans only)
  • Extensive availability nationwide (47 states for both home equity loans and HELOCs)
  • Can apply online, over the phone, or in person at a branch
  • Good price transparency
  • Many customer support options
Cons
  • There may be an annual fee for HELOCs if you don’t have a U.S. Bank Platinum Checking Package
  • Not available in TX, DE, SC
  • Potential early closure fee if you close your HELOC within 30 months of opening
The Bottom Line

Based in Minneapolis, Minnesota, U.S. Bank is the fifth largest banking institution in the U.S. It offers both home equity loans and HELOCs in 47 states, with the option of interest-only HELOCs  available to qualified borrowers. You also have the option to lock all or part of your outstanding HELOC balance into a fix-rate option during your draw period. Available loan amounts for HELOCs and home equity loans range from $15,000 to $750,000, and up to $1 million for properties in California.

There are no closing costs on home equity loans or HELOCs from U.S. Bank, but you’ll be charged an early closure fee of 1% of the line amount ($500 max) if you close your HELOC within 30 months of opening. In addition, HELOC borrowers may be charged an annual fee of up to $90, which can be waived with a U.S. Bank Platinum Checking Package. U.S. Bank offers a rate discount of 0.5% for home equity loan borrowers who set up automatic payments from a U.S. Bank personal checking or savings account.

You can apply for a home equity loan or HELOC through an online application, by phone, or by visiting a U.S. Bank branch in person. If you want a loan estimate for a home equity loan — which includes the estimated interest rate, monthly payment, and total closing costs — without completing a full application, you can get one by speaking with a banker over the phone. 

We like U.S. Bank because of its extensive nationwide availability, many customer support options, and excellent price transparency — meaning you can get a personalized rate quote and fee information just by filling out some basic information, no credit check required. 

Good for price transparency
TD Bank
TD Bank
Editor’s Score: (4.1/5)
Good for price transparency
TD Bank
Editor’s Score: (4.1/5)
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC, rate-lock HELOC
  • Home equity loan terms:
    5, 10, 15, 20, or 30 years
  • HELOC loan terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    89.99%

NextAdvisor’s Take

Pros
  • Options to apply in person, on the phone, or online
  • 0.25% rate discount if you set up auto-pay from a TD account
  • No credit check required to see personalized rates and fees
  • Many products and options available
Cons
  • Only offered in 15 states
  • $99 origination fee for both home equity loans and HELOCs
The Bottom Line

Primarily operating on the East Coast,  TD Bank is one of the 10 largest banks in the U.S. and serves more than 9.7 million customers. TD Bank offers Home Equity Loans and HELOCs in 15 states, with the option for interest-only and rate-lock HELOCs. Loan amounts for home equity loans start at $10,000, while line amounts for HELOCs start at $25,000.

For a home equity loan or HELOC with TD Bank, closing costs only exist on loan amounts greater than $500,000, but you will be required to pay a $99 origination fee at closing regardless of your loan amount. There is also an annual fee of $50 on HELOCs unless your loan amount is less than $50,000. You’ll be charged an early termination fee of 2% of the outstanding balance if your HELOC is closed within 24 months from opening. Additionally, you’ll receive a 0.25% rate discount if you set up auto-pay from a TD personal checking or savings account. 

If you decide to apply for a TD Bank home equity loan or HELOC, you can do so online, by phone, or by visiting a TD Bank in person. The online application includes a calculator that will tell you the maximum amount you can borrow based on the information you input, but you can also see a full breakdown of rates, fees, and monthly payments by entering some basic information online. No credit check is required for this service. 

Though its nationwide availability is limited, we like TD Bank because it has a wide variety of product offerings — including interest-only and rate-lock options on its HELOCs. The bank’s good online user experience and price transparency make it easy to work with this lender,  and the customer service is very accessible.

Good for wide range of customer service options
Connexus Credit Union
Connexus Credit Union
Editor’s Score: (4/5)
Good for wide range of customer service options
Connexus Credit Union
Editor’s Score: (4/5)
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC
  • Home equity loan terms:
    5 to 15 years
  • HELOC terms:
    15-year draw period, 15-year repayment period
  • Maximum LTV:
    90% for home equity loans

NextAdvisor’s Take

Pros
  • No annual fee
  • Available in 46 states
  • Excellent customer service options
  • Membership requirements are relatively easy to meet
Cons
  • Credit check required to get a personalized rate quote and product terms
  • Not available in Alaska, Hawaii, Maryland, and Texas
  • Potential for high closing costs
  • Must be a member of the credit union to get a loan
The Bottom Line

With over 420,000 members in all 50 states, Connexus Credit Union has a far reach in the United States. The credit union offers home equity loans and HELOCs in 46 states (excluding Alaska, Hawaii, Maryland, and Texas). Loan amounts for home equity loans and HELOCs range from $5,000 to $200,000. Within its HELOC product offerings is an interest-only HELOC which may allow you to pay a lower monthly payment. Since Connexus is a credit union, its products are only available to members. But, membership eligibility is open to most people: you (or a family member) just need to be a member of one of Connexus’s partner groups, reside in one of the communities or counties on Connexus’s list, or become a member of the Connexus Association with a $5 donation to Connexus’s partner nonprofit. 

Connexus does not specify any rate discounts, but it does offer an introductory rate for the first six months of your loan term. You won’t have to pay an annual fee for a home equity loan or HELOC with Connexus, but closing costs can range from $175 to $2,000 depending on your loan terms and property location. 

To apply for a home equity loan or HELOC with Connexus, you can fill out a 3-step application online. Though the application process is quick, you won’t be able to see a personalized rate or product terms without a credit check.

Connexus offers expansive nationwide availability and has several product offerings, part of the reason this lender ranked highly for us. Its straightforward application process is another bonus that makes applying for a home equity loan or HELOC easy.

Good for online application user experience
Spring EQ
Spring EQ
Editor’s Score: (4/5)
Good for online application user experience
Spring EQ
Editor’s Score: (4/5)
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC
  • Home equity loan terms:
    5 to 30 years
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    90% for home equity loans, 97.5% for HELOCs

NextAdvisor’s Take

Pros
  • No credit check required to see personalized rates
  • Available in 38 states
Cons
  • Origination fee of $995
  • Minimum credit score of 620 required
  • No specified rate discounts
The Bottom Line

Spring EQ may be a relatively new bank founded in 2016, but it has already earned a positive reputation from customers across the 38 states it serves. Spring EQ offers home equity loans, HELOCs, and interest-only HELOCs, providing borrowers with flexible loan options. Home equity loan amounts range from $5,000 to $500,000, while HELOC line amounts range from $50,000 to $500,000.

Spring EQ loans may be subject to an origination fee of $995 and an annual fee of $99 in some states. Spring EQ does not specify any rate discounts.

The Spring EQ loan application process is transparent and easy to understand. Customers can see an extensive breakdown of their loan term and rate options without needing to undergo a credit check or provide their social security number. To be eligible for a home equity loan or HELOC with Spring EQ, you’ll need a credit score of 620 or higher, along with a debt-to-income ratio of 45% or less.

We ranked Spring EQ highly because of the lender’s price transparency, which allows potential borrowers to get pre-qualified for a loan with only basic information. This makes it easy to compare rates without needing to provide sensitive personal information or undergo a hard credit check. Additionally, the online experience is user-friendly and the application’s breakdown of rates, fees, and terms is easily digestible for customers.

Good for wide range of product offerings
KeyBank
KeyBank
Editor’s Score: (4/5)
Good for wide range of product offerings
KeyBank
Editor’s Score: (4/5)
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC, rate-lock HELOC
  • Home equity loan terms:
    5 to 30 years
  • HELOC terms:
    15-year draw period, 15-year repayment period
  • Maximum LTV:
    80% for standard home equity loans and HELOCs, 90% for high-value home equity loans and HELOCs

NextAdvisor’s Take

Pros
  • Interest-only and rate-lock HELOC options
  • Streamlined application process for existing KeyBank customers
  • Smooth online user experience and website
Cons
  • High closing costs if you plan to use a closing agent
  • Annual fee for HELOCs
  • Origination fee for home equity loans
The Bottom Line

Based in Cleveland, Ohio, KeyBank has been around for nearly 190 years. KeyBank offers home equity loans to customers in 15 states and HELOCs to customers in 44 states. Aside from a standard HELOC, KeyBank also offers interest-only and rate-lock options. Home equity loan amounts of $25,000 and up are available, while HELOCs have line amounts of $10,000 and up. 

KeyBank HELOCs come with an annual fee of $50, but no closing costs unless your closing is performed by a closing agent. In that case, your closing fee could be up to $400. KeyBank offers a 0.25% rate discount for clients who have eligible checking and savings accounts with KeyBank. Additionally, home equity loans have an origination fee of $295.

The KeyBank application allows you to apply for multiple products at one time. If you’re not sure whether KeyBank loans are available in your area, the application will tell you once you input your zip code. If you’re an existing KeyBank customer, you’ll have the option to skim through the application and import your personal information from your account. 

We like KeyBank because of its extensive product offerings. The streamlined application process for existing customers is helpful, but both existing and new customers will likely be pleased with the online user experience and availability of customer service that KeyBank offers.

Good for rate match guarantee
Third Federal Savings & Loan
Third Federal Savings & Loan
Editor’s Score: (3.9/5)
Good for rate match guarantee
Third Federal Savings & Loan
Editor’s Score: (3.9/5)
  • Products offered:
    Home equity loan, 5/1 home equity loan, HELOC
  • Home equity loan terms:
    5 year, 10 year, 5/1 adjustable rate (6-30 years)
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    80%

NextAdvisor’s Take

Pros
  • No application, closing, or origination fees
  • Lowest rate guarantee
  • Smooth online application process
Cons
  • Limited geographic availability for home equity loans
  • $65 annual fee on HELOCs (waived the first year)
The Bottom Line

Opened in the midst of the Great Depression in 1938, Third Federal Savings & Loan sought to help unemployed and underemployed Ohio residents achieve home ownership. Since its opening, Third Federal has expanded significantly, now offering HELOCs in 26 states and home equity loans in eight states. Home equity loans and HELOCs are available in amounts from $10,000 to $200,000.

Home equity loans and HELOCs with Third Federal come with an annual fee of $65 (waived the first year) but no application fees, closing fees, or origination fees. If you set up autopay from an existing Third Federal account before closing, you’ll be eligible for a 0.25% rate discount. Additionally, Third Federal offers a lowest rate guarantee on its HELOCs and home equity loans, meaning Third Federal will offer you the lowest interest rate relative to other similar lenders or pay you $1,000.

You can apply for a home equity loan or HELOC on the Third Federal website. Both applications are included on the same page along with multiple rate and term options, allowing the customer to assess what will be best for them. Third Federal also provides helpful tools and tips on its application page to answer questions that borrowers may have. You won’t have to register an account to apply, but you’ll still be able to save your application and return to it later.

We like Third Federal’s application process and the lender’s price transparency. If you’re not sure what kind of home equity product you’re looking for, the website provides useful information to help you decide. Third Federal also offers a unique product not commonly found among other lenders: a 5/1 adjustable-rate home equity loan, where the rate is fixed for the first five year and then adjusts annually, much like how an adjustable-rate mortgage works. However, you won’t be eligible for this product unless you live in one of the eight states in which Third Federal offers home equity loans.

Good for HELOCs with longer repayment periods
PNC Bank
PNC Bank
Editor’s Score: (3.8/5)
Good for HELOCs with longer repayment periods
PNC Bank
Editor’s Score: (3.8/5)
  • Products offered:
    HELOC, rate-lock HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    10-year draw period, 30-year repayment period
  • Maximum LTV:
    89.90%

NextAdvisor’s Take

Pros
  • Variable and fixed-rate HELOC options
  • 30-year repayment period on HELOC
  • Option to choose a custom loan term
  • User-friendly website
Cons
  • Don’t offer home equity loans
  • $50 annual fee on HELOCs
The Bottom Line

PNC Bank is the sixth-largest bank in the U.S. by consolidated assets, according to the Federal Reserve. Headquartered in Pittsburgh, PA, PNC serves 44 states. Though the bank does not offer home equity loans, it offers both variable-rate HELOCs and fixed-rate HELOCs. You can even switch between variable and fixed-rate interest over the course of your draw period. Another benefit of a PNC HELOC is that the repayment period is 30 years, unlike most other lenders who have 20 year terms. A longer payment period generally means lower monthly payments (but more interest paid in the long run), which can be beneficial to those who want to borrow large amounts. Line amounts from $10,000 to $1,000,000 are available on a PNC HELOC.

PNC offers a 0.25% interest rate discount to borrowers who set up and maintain automatic payments from a qualifying PNC checking account. There is a $50 annual fee for HELOC borrowers, except in Texas. 

The PNC website is user-friendly, giving customers the ability to estimate their home equity with an easy-to-use calculator. It also provides several useful graphics and videos to help borrowers better understand how their HELOCs work. PNC allows potential borrowers to see their rate and term options early on in the application process, indicating good price transparency. PNC also gives customers the option to choose a custom loan term. 

We like PNC Bank because its application is straightforward and the bank is very transparent about its rates, fees, and terms without requiring a credit check. Though PNC doesn’t don’t offer home equity loans at all, its wide nationwide availability for HELOCs is noteworthy.

Good for Texas borrowers
Frost Bank
Frost Bank
Editor’s Score: (3.7/5)
Good for Texas borrowers
Frost Bank
Editor’s Score: (3.7/5)
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC
  • Home equity loan terms:
    7 to 20 years for a second lien, 10 to 20 years for a first lien
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    80%

NextAdvisor’s Take

Pros
  • No application fee or annual fee
  • Benefits for new and existing Frost Bank customers
  • Quick, 15-minute application process
Cons
  • Only available in Texas
  • Have to create an account to apply
The Bottom Line

Headquartered in San Antonio, Texas, Frost Bank’s products are only available to Texas residents. Among the products offered are home equity loans, HELOCs, and interest-only HELOCs. If you’re not sure which one of these products is best for you, the Frost Bank website provides a loan product selection tool to help you consider your options. Home equity loans come with loan amounts of $2,000 and up, while HELOCs come with line amounts of $8,000 and up. 

Frost Bank does not require an application fee or an annual fee. Additionally, there are no closing costs for the borrower. If you have automatic payments set up from a Frost Bank checking or savings account, you’ll be eligible for a 0.25% rate discount. 

You can apply for a home equity loan or HELOC on the Frost Bank website, but first you’ll need to create an account. According to the website, the application will only take you about 15 minutes. If you’re not located in Texas, you won’t be able to apply. 

Though Frost Bank’s nationwide availability is very limited, the bank has a helpful product selection tool, easy application process, and good price transparency. Frost Bank’s customer service is very accessible – another reason for its high rating.

Good for rate discounts
Regions Bank
Regions Bank
Editor’s Score: (3.5/5)
Good for rate discounts
Regions Bank
Editor’s Score: (3.5/5)
  • Products offered:
    Home equity loan, HELOC, rate-lock HELOC
  • Home equity loan terms:
    7,10, 15, or 20 years
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    80%

NextAdvisor’s Take

Pros
  • No closing costs for home equity loans
  • Options to apply online, in-person, or over the phone
  • Accessible customer service options
Cons
  • Closing costs for HELOCs
  • Limited nationwide availability (15 states)
The Bottom Line

As one of the nation’s largest banking, mortgage, and wealth management service providers, Regions Bank serves customers across the South, Midwest, and Texas.  Regions offers home equity loans and HELOCs in 15 states. Its HELOC offerings also come with a rate-lock option for customers who want it. Home equity loans have loan amounts of $10,000 to $250,000 and HELOCs have line amounts ranging from $10,000 to $500,000.

For home equity loans and HELOCs, Regions offers rate discounts between 0.25% and 0.5% to those who elect to have their monthly payments automatically debited from a Regions checking account. For home equity loans, there are no closing costs. HELOCs, however, can have closing costs between $150 and $2,000, but Regions will pay these costs if the HELOC amount is $250,000 or less. 

You can apply for a Regions home equity loan or HELOC online, in-person, or over the phone. You’ll have to create an account with Regions to apply. Before you create an account, though, you can use the bank’s own rate calculator to estimate your rate and monthly payment amount. 

We like Regions because of the variety of application options it offers and the ease of applying online. Regions provides several ways to contact customer service, ensuring that customers can get questions answered quickly. Though Regions only offers its products in 15 states, it gives customers in these states the flexibility to choose between home equity loans, HELOCs, and rate-lock HELOCs.

Honorable mentions

Good for existing Citizens Bank customers
Citizens Bank
Citizens Bank
Editor’s Score: (3.4/5)
Good for existing Citizens Bank customers
Citizens Bank
Editor’s Score: (3.4/5)
  • Products offered:
    HELOC, interest-only HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    10-year draw period, 15-year repayment period
  • Maximum LTV:
    Not specified

NextAdvisor’s Take

Pros
  • Rate discount options for existing and new customers
  • No application or closing fees
  • Good online user experience
Cons
  • Does not offer home equity loans
  • Limited nationwide availability
The Bottom Line

Based in Providence, Rhode Island, Citizens Bank is a regional bank that serves 19 states across New England, the Mid-Atlantic, and Midwest regions. Citizens offers standard and interest-only HELOCs to borrowers in 19 states. However, the bank does not offer home equity loans at all. HELOC line amounts start from $17,500. 

Opening a HELOC with Citizens Bank won’t require any application fees or closing costs, but you will have to pay a $50 annual fee every year except the first during the draw period. According to Citizen Bank’s website, obtaining the best rate requires having a Citizens consumer checking account with automatic monthly payments set up. In states where Citizens does not offer checking accounts, customers can get the same discount with automatic payments set up from any checking account. 

You can apply for a HELOC on the Citizens Bank website, but you also have the option to speak to a loan specialist on the phone. You’ll need to sign up with a phone number and email to access the application. 

Citizens has good price transparency and responsive customer service, but its products are limited to 19 states. In addition, though Citizens offers multiple HELOC options, it does not offer home equity loans at all.

Good for high loan-to-value ratio options
BMO Harris Bank
BMO Harris Bank
Editor’s Score: (3.4/5)
Good for high loan-to-value ratio options
BMO Harris Bank
Editor’s Score: (3.4/5)
  • Products offered:
    Home equity loan, HELOC, interest-only HELOC, rate-lock HELOC
  • Home equity loan terms:
    5 to 20 years
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    85% for HELOCs; 89.99% for most home equity loans

NextAdvisor’s Take

Pros
  • Available in 48 states
  • No hard credit check required
  • Flexible product offerings
  • Option for 100% CLTV for borrowers who meet certain qualifications
Cons
  • Limited customer service options
  • Can only receive personalized rates on the phone
  • $75 annual fee for HELOCs
The Bottom Line

As the 8th largest bank by assets in North America, BMO Harris Bank (a subsidiary of the Canadian financial services company Bank of Montreal) serves more than 12 million customers globally.  Currently, BMO Harris products and services are available in 48 states (all but New York and Texas). BMO Harris offers home equity loans and three variations of a HELOC. Loan amounts for home equity loans start at $5,000 and up while HELOC lines start at $10,000 and up. 

The normal maximum combined loan-to-value ratio allowed is 85% for HELOCs and 89.99% for home equity loans, but a 100% max CLTV option is available for low-to-moderate income borrowers or Low to Moderate Income Census Tract customers who need to make home improvements.

There is no application fee for a home equity loan or line of credit with BMO Harris. In addition, BMO Harris will pay closing costs for loans secured by an owner-occupied 1 to 4-family residence, but borrowers will have to pay a $75 annual fee for a HELOC. If you authorize auto pay from a BMO Harris checking account, you’ll be eligible to receive a 0.50% rate discount.

You can apply for a home equity loan or HELOC online or in-person, but in order to get personalized rates, you’ll have to speak with a representative on the phone. Getting personalized rates does not require a hard credit check. 

We like that BMO Harris offers both home equity loans and three types of HELOCs almost nationwide, but the lender fell short because of its low price transparency. Additionally, the online application requires your social security number and has some elements that could be confusing for customers. 

Good for 24-hour customer support
Flagstar Bank
Flagstar Bank
Editor’s Score: (3.1/5)
Good for 24-hour customer support
Flagstar Bank
Editor’s Score: (3.1/5)
  • Products offered:
    Home equity loan (in some areas), HELOC, interest-only HELOC
  • Home equity loan terms:
    10, 15, or 20 years
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    80%

NextAdvisor’s Take

Pros
  • Available in 49 states
  • Accessible customer service, including 24-hour phone support
  • Flexible product offerings
Cons
  • No online application (can only request a phone call)
  • Unable to get personalized rate quote through website
The Bottom Line

Flagstar Bank has the highest nationwide availability yet, offering home equity loans and HELOCs in 49 states (all but Texas). Though both products are offered in 49 states, the availability of home equity loans may be limited depending on your area. Available loan amounts for home equity loans and HELOCs are $10,000 to $1,000,000.

HELOCs with Flagstar require a $75 annual fee, but it is waived the first year. To avoid closing fees, you’ll have to keep your HELOC open for at least 36 months. Additionally, there is a 0.50% rate discount for borrowers who have monthly automatic payments set up from a Flagstar Bank deposit account.

Flagstar doesn’t have a full online application, only a form where you can submit your information to be contacted by a representative later.  Flagstar does not provide rates on its website, you can get a custom rate based on a soft credit check and some additional information. 

While its nationwide availability for HELOCs is strong, Flagstar’s tedious application process and lack of transparency may be frustrating for customers seeking a quick, easy process. The lender does offer several customer service options, including 24-hour loan support via phone, so this may be appealing to those who enjoy accessible communication with customer service. 

Good for fast funding among traditional banks
Truist
Truist
Editor’s Score: (2.9/5)
Good for fast funding among traditional banks
Truist
Editor’s Score: (2.9/5)
  • Products offered:
    HELOC, interest-only HELOC, rate-lock HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    89.90%

NextAdvisor’s Take

Pros
  • No account needed to apply for a HELOC
  • Option to forego closing costs
  • Option to autofill the application for existing Truist customers
  • Wide variety of HELOC options
Cons
  • No rate discounts
  • Credit check required to get personalized rates
  • Does not offer home equity loans
The Bottom Line

Headquartered in Charlotte, NC, Truist offers standard, interest-only, and rate-lock HELOCs to borrowers in 15, primarily Southeastern, states. HELOC line amounts range from $10,000 upward. Truist does not offer home equity loans at all.

Truist does not specify any rate discounts. When closing, the borrower will have the option to pay closing costs themselves or have Truist advance them. If you choose the latter, you won’t have to reimburse Truist-paid closing costs if you keep your account open for at least three years. There is a $50 annual fee in some states. 

You can apply for a HELOC with Truist on Truist’s website. Before you get started applying, the Truist website tells you which documents you’ll need. You won’t be required to sign up for an account, but if you already have an account set up with Truist, you’ll be able to quickly auto-fill your application. Truist advertises that the turnaround time between application to closing averages 30 to 35 days, which is one of the fastest times among its bank peers (not including newer, non-traditional start-up companies like Figure).

Unfortunately, Truist ranked low on price transparency, meaning it may be difficult to get personalized rates. The rate advertised on the website is based on one particular scenario. You’ll have to submit an application and undergo a credit check to get personalized rates. 

Good for unique product offering
Figure
Figure
Editor’s Score: (2.8/5)
Good for unique product offering
Figure
Editor’s Score: (2.8/5)
  • Products offered:
    Non-traditional HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    5, 10, 15, or 30 years
  • Maximum LTV:
    95%

NextAdvisor’s Take

Pros
  • Wide nationwide availability
  • Good online user experience
  • 0.75% discount for qualifying customers
  • Flexibility of a home equity loan/HELOC hybrid
Cons
  • Only one product offered
  • Limited price transparency
  • Potentially high origination fee
The Bottom Line

At only three years old, Figure uses a unique combination of technology and banking to provide customers in 41 states with HELOCs. Though officially called a home equity line of credit, Figure’s HELOC product has characteristics of both a traditional HELOC and a home equity loan. Borrowers will withdraw the full line amount (minus the origination fee) at the time of origination. Once they repay the initial balance at a fixed rate, they will be able to make additional draws over a specified draw period. Available line amounts range from $15,000 to $400,000.

A HELOC with Figure has no closing costs, but the borrower will be responsible for an origination fee of up to 4.99% of the initial draw, depending on the state the property is located in and the borrower’s credit profile. You may also have to pay a recording fee if your county requires it. Borrowers may receive a rate discount of up to 0.75%; 0.50% for opting into a credit union membership and 0.25% for enrolling in autopay. 

You can apply for a Figure HELOC 100% online, in only a few minutes, according to the website. You’ll be prompted to fill out some basic personal information, but you may have to wait for your application to be reviewed before you can continue with the application process.

Figure’s main draws are its fast funding — it advertises funding in as few as 5 days — and easy-to-navigate website with an accompanying chatbot. However, its downsides include the fact that you can only fill out the first part of the application before you’re told you must wait for your information to be reviewed before you can continue. In addition, Figure only offers a single product which might not be right for everyone. If you don’t want a unique HELOC/home equity loan hybrid and want to go with a traditional HELOC or home equity loan, you’ll need to find another lender. 

Good for borrowers outside the continental U.S.
PenFed Credit Union
PenFed Credit Union
Editor’s Score: (2.4/5)
Good for borrowers outside the continental U.S.
PenFed Credit Union
Editor’s Score: (2.4/5)
  • Products offered:
    HELOC, interest-only HELOC, rate-lock HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    10-year draw period, 20-year repayment period
  • Maximum LTV:
    90%

NextAdvisor’s Take

Pros
  • Offered in all 50 states as well as Guam, Puerto Rico, and Okinawa
  • Flexible HELOC product offerings
  • Credit union membership easy to obtain
Cons
  • No online application
  • Poor price transparency
  • Does not offer home equity loans
The Bottom Line

Established in 1935, Pentagon Federal Credit Union (widely known as PenFed) offers HELOCs in all 50 states as well as Guam, Puerto Rico, and Okinawa. PenFed is a credit union so its products are only available to members, but you can easily become a member by opening a PenFed savings account and funding it with at least $5. With PenFed, you’ll have the flexibility to choose between a standard, interest only, or rate lock HELOC with line amounts ranging from $25,000 to $1,000,000. But, the lender does not offer home equity loans at all.  

HELOCs with PenFed will have an annual fee of $99 unless you have paid $99 in interest during the preceding year. PenFed will pay most closing costs, but for credit lines greater than $500,000, the borrower will likely be responsible for closing costs. No rate discounts are specified. 

If you’re interested in applying for a HELOC with PenFed, you’ll have to request a callback over the phone or online. This feature may be a major drawback for customers who prefer online services and applications.

While PenFed may be a good option for borrowers in U.S. territories who don’t have many other alternatives when it comes to home equity lenders, the lender’s lack of an online application and lack of price transparency earned it a low score in our ratings. If you prefer communication via telephone, however, PenFed may be a good option for you.

How We Chose These Lenders

NextAdvisor developed a framework to evaluate home equity lenders using a weighted average score between 1 and 5 based on the following criteria. A higher weight was given to the criteria we determined to be most important:

  1. Nationwide availability: We rated lenders on a scale of 1 to 5 based on how many states their home equity products were offered in. For lenders that only offered either home equity loans or HELOCs, we looked at how many states offered that specific product. For lenders that offered both home equity loans and HELOCs, we looked at how many states each individual product was offered in, and then took the average. A lender scored a 5 if it offered home equity products in at least 45 states which equates to 90% of U.S. states. Nationwide availability counted for 10% of the composite score.
  2. Online user experience: We rated lenders on a scale of 1 to 5 based on the user experience of their online application process. A 5 was given to lenders who had a clear, easy-to-navigate online application process with no technical issues or confusing instructions. A score of 1 was given to lenders who did not offer an online application at all, instead requiring customers to apply in person at a branch or over the phone. Online user experience counted for 20% of the composite score.
  3. Products offered: We rated lenders on a scale of 1 to 5 based on how many types of home equity products they offered. Product offerings were categorized into the following types: home equity loans; standard variable-rate, interest-and-principal HELOCs, interest-only HELOCs, HELOCs with fixed-rate or rate-lock options, and miscellaneous products that did not fall into any of the previous categories. Lenders who offered at least 4 types of products received a 5. Products offered counted for 20% of the composite score.
  4. Price transparency: We rated lenders on a scale of 1 to 5 based on their price transparency, which we defined as how much information you could get about rates and fees without a hard credit check. Comparing rates and fees from multiple lenders is one of the best ways to ensure you’re getting the best deal, and we gave high scores to lenders who made it easy to do so. On the other hand, lenders who kept detailed rate and fee information behind a hard credit check — which can slightly lower your credit score and should only be done when you’re serious about moving forward with a particular lender — scored lower. Lenders who provided personalized quotes for rates, fees, and important loan information with only basic information (and no hard credit check) required received a 5. Price transparency counted for 30% of the composite score.
  5. Customer service options: We rated lenders on a scale of 1 to 5 based on how many different customer service options were available to consumers needing help with their loan application or loan servicing. Examples of customer service options we counted included, but were not limited to, online live chat, phone, email, visiting an in-person branch, in-person or virtual appointments with dedicated loan officers, and social media direct messaging. Lenders who had five or more customer service options received a 5. For each option that was available only to existing customers (and thus would not be available to new customers needing help with the application process), we deducted 0.5 from the score. For any lender that had a 24/7 customer service option, regardless of what form that option took, we added 1 to the score. We did not evaluate the quality of the customer service itself, as that can be subjective and highly dependent on the specific customer service representative a borrower is working with. Customer service options counted for 20% of the composite score. 

What We Did Not Evaluate In Our Scoring

When comparing lenders, we did not evaluate factors like pricing (interest rates and fees) and borrower requirements (like minimum credit scores). Home equity rates and fees can change often and are based on each borrower’s specific credit profile. Each lender also has its own unique underwriting requirements and process, which are often not publicly available. Therefore, we don’t believe it’s possible to accurately evaluate rates, fees, and credit score requirements from lender to lender. It’s important to note that lower rates may not actually lower the total cost of borrowing if they’re offset by higher fees.  

If a company offered both home equity loans and HELOCs, we evaluated its home equity lending as a whole rather than any specific product. 

To find the best deal, get personalized rate and fee quotes from multiple lenders, then use NextAdvisor’s loan calculator to calculate the total cost of borrowing and monthly payment to accurately compare lenders. 

Home Equity Line of Credit FAQs

How does a HELOC work?

A home equity line of credit (HELOC) lets you borrow against the available equity in your home — similar to a credit card. Your home is used as collateral, meaning if you default on your payments the lender can seize your home.

Like a credit card, you’ll be able to access funds from your HELOC as you need them, instead of like a loan where you take out a predetermined lump sum amount at the onset. However, there’s usually a minimum withdrawal amount based on the total amount of your credit line. This means you’ll be required to spend up to a certain amount.

What can you use a HELOC for?

HELOCs can be useful for large expenses, like home renovations or paying for your child’s college. They’re particularly good for ongoing expenses, like projects or tuition, since you only have to pay back what you spend.

How do you apply for a HELOC?

You can apply for most HELOCs online. After you’ve done your research and selected a lender, go to their website and start an application.

You’ll need to have some personal information ready to enter into your application: name, address, estimated credit score, and how much you want your credit line to be. You can rarely open a line of credit for less than $10,000, and the maximum amount you can get will also depend on your credit score and home equity.

What’s the difference between a HELOC vs. a home equity loan?

HELOCs are different from another common type of home equity financing — home equity loans.

While HELOCs are variable-rate, revolving lines of credit, home equity loans are fixed-rate installment loans. With a home equity loan, you get a sum of money when you take out the loan and pay it back (with interest) in fixed monthly payments. With a HELOC, you can draw from a line of credit as much as you want, whenever you want during the draw period and pay it back with interest during the repayment period. Your monthly payment will depend on how much you draw and the current interest rate on your HELOC.

The interest rates you’ll get for each are determined by your credit score, home equity, where you live, the value of your property, and other factors.