Best Home Equity Loan Rates March 2024
- TD Bank: Best for Home Equity Loan Rate Overall
- Navy Federal Credit Union: Best for Highest Home Equity Borrowing Limit
- BMO Harris: Best for Loan Amounts
- Connexus Credit Union: Best for Fastest Closing Time
- Discover: Best for Borrowers With Low Credit Scores
- Fifth Third Bank: Best for Customer Friendly Home Equity Loan Products
- U.S. Bank: Best for Real-Time Rate Estimates
Best For Home Equity Loan Rate Overall
TD Bank
5.0
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
7.99%
CLTV
89.99%
Min. credit score
740
Compare rates from participating lenders in your area via Bankrate.com
7.99%
89.99%
740
Why We Picked It
TD Bank has among the lowest interest rates that are not just an initial teaser rate—it’s for the life of the loan. The 7.99% starting APR is specifically for its 10-year home equity loan. However, loan terms range from five to 30 years with a minimum amount of $10,000. Additionally,TD’s home equity loans aren’t available in all states.
Pros & Cons
- Rates are much lower than the national average
- CLTV of 89.99% better than some lenders
- High credit score of at least 740 to qualify
Extra Details
Loan Terms
The rate quoted above is good for a 10-year loan term, though you can borrow for terms of five to 30 years. The lower rate also requires automatic withdrawals from a TD Bank checking or savings account. Without automatic withdrawals, the rate increases by 0.25%. It also requires a $99 origination fee.
Not Available Nationwide
TD Bank home equity loans are only available in 15 states and Washington D.C.
How to Apply
Borrowers can apply online. Customer support by phone is available 24/7.
Best for Highest Home Equity Borrowing Limit
Navy Federal Credit Union
4.0
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
6.64%
CLTV
100%
Min. credit score
Did not disclose
Compare rates from participating lenders in your area via Bankrate.com
6.64%
100%
Did not disclose
Why We Picked It
Navy Federal Credit Union’s starting rate is below the national average. You must be a credit union member to qualify for a home equity loan, which means you must be an active member of the armed forces, a veteran, an employee of the Department of Defense or a family member of someone in one of those categories. The credit union also allows you to borrow up to 100% of your CLTV for a first and second home, which is higher than most competitors.
Pros & Cons
- Rates are lower than the national average
- You can tap up to 100% of your home’s equity after current debt is deducted
- Must be a member of the credit union, which has eligibility requirements
- Long closing times
Extra Details
Loan Terms
The starting APR is for a five-year loan term and up to 70% CLTV. Depending on the loan term, you can borrow as little as $10,000 and as much as $500,000. Loan timelines range from five years to 20 years. Navy Federal does not charge an application or origination fee, but there may be closing costs depending on factors like the property location and how much you’re borrowing. For loans up to $250,000, closing costs are typically between $300 and $2,000.
Available Nationwide
Navy Federal home equity loans are available in all states.
How to Apply
Borrowers can start the application process online. Customer support by phone is available Monday through Saturday from 7 a.m. to midnight ET and Sunday from 9 a.m. to midnight.
Best For Loan Amounts
BMO Harris
3.5
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
8.19%
CLTV
89.99%
Min. credit score
700
Compare rates from participating lenders in your area via Bankrate.com
8.19%
89.99%
700
Why We Picked It
BMO’s home equity loans have a higher APR than the national average, but the bank offers a slightly speedier timeline with about 30 days to close. BMO also has a slightly higher CLTV and offers loans as small as $5,000, all of which might put it in the sweet spot for some borrowers.
Pros & Cons
- 30-day closing timeline is faster than most lenders
- Higher CLTV of 89.99% than some lenders
- Higher APR than average
- You’ll need a credit score of at least 700 to qualify
Extra Details
Loan Terms
BMO offers home equity loans from five to 20 years, with loan amounts starting at $5,000. While there are no closing costs, if you pay your loan in full within 36 months, you may incur a fee for the bank to cover the costs of closing the loan initially.
Available Nationwide
BMO home equity loans are available in all states.
How to Apply
Borrowers can apply online. Customer support is available by phone Monday through Friday from 8 a.m. to 8 p.m. CST and on Saturday from 8 a.m. to 6 p.m. CST.
Fastest Closing Time
Connexus Credit Union
3.5
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
7.20%
CLTV
90%
Min. credit score
640
Compare rates from participating lenders in your area via Bankrate.com
7.20%
90%
640
Why We Picked It
Connexus has the fastest closing timelines among the lenders we surveyed, with about 25 days to close. It also has a lower required credit score and a higher CLTV than some lenders.
Pros & Cons
- Fast closing time
- You can tap up to 90% of your CLTV
- Rates are higher than the national average
- Closing costs can be high
Extra Details
Loan Terms
The APR quoted is for a loan terms of 15 years and a minimum borrowing of $5,000, but terms can be as short as five years. There are closing costs, however, which can range from $175 to $2,000.
Not Available Nationwide
Connexus home equity loans are not available in Maryland, Texas, Hawaii and Alaska.
How to Apply
Borrowers can apply online. Customer support by phone is available 24/7.
Best For Low Borrowers With Credit Scores
Discover
3.0
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
Compare rates from participating lenders in your area via Bankrate.com
8.49%
90%
620
Why We Picked It
Discover makes its home equity loans available to borrowers with the lowest credit scores among the national lenders surveyed. The interest rate is slightly higher than some competitors, however.
Pros & Cons
- Can qualify with a credit score as low as 620
- Can tap up to 90% of your home’s equity
- Slightly longer closing times than some of the speediest lenders
- Rates slightly higher than competitors
Extra Details
Loan Terms
Discover says its best APRs are available to borrowers with “the best credit and other factors.” Loan amounts can be as low as $35,000 and as high as $300,000, but the best APRs start at the $80,000 level. Loan terms range from 10 to 30 years, and there are no origination fees or closing costs.
Not Available Nationwide
Home equity loans are not available in Iowa or Maryland.
How to Apply
Borrowers can start the application process online. Customer support by phone is available on weekdays from 8 a.m. to midnight ET and on weekends from 10 a.m. to 6 p.m. ET.
Best Mid-Tier Home Equity Loan Product
Fifth Third Bank
3.0
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
8.50%
CLTV
90%
Min. credit score
660
Compare rates from participating lenders in your area via Bankrate.com
8.50%
90%
660
Why We Picked It
Fifth Third Bank offers among the most customer-friendly home equity loans with the ability to tap more of your home’s equity and a lower credit score requirement than most competitors. The lender has a starting rate of 8.50% for a good-quality borrower. This places Fifth Third’s rates in the middle of its peers.
Pros & Cons
- Higher CLTV than most lenders
- Lower credit score than many lenders
- APR slightly higher than best rates
- Available only in Fifth Third’s 11-state footprint
Extra Details
Loan Terms
The APR that Fifth Third advertises is offered to borrowers with the highest credit scores and qualifications. The lowest rate also includes a 0.25% discount for borrowers who set up automatic payments from an eligible Fifth Third account.
Not Available Nationwide
Fifth Third operates in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and South Carolina.
How to Apply
Borrowers can apply online. Customer support by phone is available Monday through Friday from 8 a.m. to 6 p.m. ET and Saturday from 10 a.m. to 4 p.m. ET.
Best For Real-time Rate Estimates
U.S. Bank
3.0
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
APRs starting at
8.40%
CLTV
80%
Min. credit score
Did not disclose
Compare rates from participating lenders in your area via Bankrate.com
8.40%
80%
Did not disclose
Why We Picked It
U.S. Bank’s starting APR is similar to the national average. The bank allows you to get a “loan estimate” in real time, which would include the estimated interest rate, monthly payment and total closing costs. Other details—such as the minimum credit score required and average time to close a loan—are not readily available, and the bank did not respond to requests for information.
Pros & Cons
- Rates are lower than the national average
- No closing costs
- Closing timeline not disclosed
- Minimum credit score not disclosed
Extra Details
Loan Terms
The rates shown above are for loans from $50,000 to $99,999 for a borrower with a credit score of at least 730 and up to 60% loan-to-value (LTV) ratio. To get the lowest rate, the bank also requires customers to make automatic payments from a U.S. Bank personal checking or savings account.
Available Nationwide
U.S. Bank home equity loans are available in all states.
How to Apply
Borrowers can apply online. Customer support by phone is available 24/7.
The interest rates are reflected as annual percentage rates (APRs) compared to the recent national average. We also considered each lender’s combined loan-to-value (CLTV) ratio requirement, which is calculated by dividing the sum of all the loans on the property by its current value. Most lenders require owners to retain a CLTV ratio of 80% or less, but some are willing to go higher.
Summary: Best Home Equity Loan Rates
| Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating | APRs starting at | CLTV | Min. credit score | Learn More CTA text | Learn more CTA below text | Learn More |
|---|---|---|---|---|---|---|---|---|---|
| TD Bank |  | 5.0 |  | 7.99% | 89.99% | 740 | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| Navy Federal Credit Union |  | 4.0 |  | 6.64% | 100% | Did not disclose | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| BMO Harris |  | 3.5 |  | 8.19% | 89.99% | 700 | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| Connexus |  | 3.5 | | 7.20% | 90% | 640 | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| Discover |  | 3.0 |  | 8.49% | 90% | 620 | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| Fifth Third Bank |  | 3.0 |  | 8.50% | 90% | 660 | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com | |
| US Bank |  | 3.0 | | 8.40% | 80% | Did not disclose | Compare Rates | Compare rates from participating lenders in your area via Bankrate.com |
Current Home Equity Loan Rates
How Does a Home Equity Loan Work?
You can generally borrow up to 80%—sometimes 85%—of your home’s value, depending on the lender and your financial profile.
Home equity loan rates are fixed, meaning your interest rate won’t change over the course of your loan; you’re expected to repay both principal and interest in monthly installments. Repayment terms typically range from five to 30 years, but lenders tend to offer better rates to borrowers who choose shorter terms and have higher credit scores.
You’ll have to pay fees and closing costs between 2% and 5% of the total loan amount. Some lenders might waive these additional costs.
FEATURED PARTNER OFFER
Discover Home Equity
3.5
Our star ratings are based on a range of criteria and are determined solely by our editorial team. See our methodology for more information.
Interest Rate:
Above national average
Minimum Credit Score:
620
Compare rates from participating lenders in your area via Bankrate.com
Above national average
620
Pros & Cons
- No application fees, loan origination fees, appraisal fees or closing costs
- Offers cash-out refinancing up to $300,000
- Allows you to borrow against almost 90% of your equity
- Can complete all or nearly all of the application process online
- Only offers refinancing and home equity loans
- Doesn’t offer home equity products in certain states or in any U.S. territories
- Might charge prepayment penalties up to $500 if you repay your loan early
- Takes an average of 6 to 8 weeks to close on a loan
What Can I Use a Home Equity Loan For?
If you’re approved, you’ll receive a lump sum to use how you wish. Many people use home equity loans to fund:
- Home improvements
- Debt consolidation
- College tuition
- Medical bills
- Emergency expenses
- Major purchases (such as a new car or wedding)
- Vacations
How To Apply for a Home Equity Loan
- Understand your current financial situation. Like with most loans, you’ll need good to excellent credit (a credit score of at least 680) as well as a stable income and a low debt-to-income (DTI) ratio to qualify.
- Determine how much home equity you have. You must have enough equity in your home—typically at least 20%—to be eligible for a home equity loan. Take your remaining mortgage balance and subtract it from your home’s estimated market value to get a rough idea of how much equity you have.
- Compare lenders and interest rates. Once you have an idea of how much you want to borrow and the amount of equity you have in your home, start looking at several different lenders. Compare at least three to five lenders before settling on a single loan to get the best deal.
- Submit your application. When applying for a home equity loan, you’ll need to supply your lender with several key documents and pieces of information. This includes your Social Security number, current mortgage statement, two years’ worth of W-2s, bank statements and tax returns.
- Get your home appraised. Your lender will likely order an appraisal to confirm your home’s value. This helps them determine how much you can borrow.
- Sign your closing documents. Once you’ve had your home appraised and your loan approved, you’ll review and sign all the closing documents with your lender. You’ll also pay any closing costs—although some lenders waive closing fees on home equity loans. The lender will then finalize your loan, and you’ll receive your funds once the three-day right of rescission period ends.
Alternatives to a Home Equity Loan
Home equity can be a powerful tool for homeowners needing to finance significant expenses. However, a traditional home equity loan might not always be the best or available option. These are some popular alternatives to home equity loans.
- Cash-out refinancing. Cash-out refinancing involves refinancing a mortgage for more than the outstanding balance and taking the difference in cash. This is best for borrowers who can secure a lower interest rate than their current mortgage and want to consolidate debt.
- Personal loans. Personal loans are unsecured loans that don’t require home equity and are based on creditworthiness. This option is typically best for borrowers with strong credit who need funds quickly and don’t want to use their home as collateral.
- Credit cards. Credit cards offer revolving credit that borrowers can use for various purchases, with some providing 0% introductory annual percentage rate (APR) offers. These are ideal for those who prefer short-term borrowing and can take advantage of promotional interest rates.
- Retirement account loans. Certain retirement accounts allow individuals to take loans against their saved retirement funds. A 401(k) loan is one popular example. These are suitable for borrowers with substantial retirement savings and who are confident in their ability to replenish the funds.
- Life insurance loans. A life insurance loan is a type of financing taken out against the cash value of a life insurance policy. This form of financing is suitable for policyholders with a whole-life policy that has built up cash value, offering a low-interest option without a credit check.
- Peer-to-peer lending. Unlike traditional financial institutions, peer-to-peer (P2P) lending connects borrowers directly with investors through online platforms. P2P lending is a good option for borrowers with good credit who want a more personal borrowing experience and competitive interest rates.
Methodology
We reviewed a dozenhome equity loan lendersfor customers across the nation. Lenders that do not display their interest rates online or decline to respond to emails or calls from reporters are not eligible for the list.
We scored lenders primarily on the basis of their interest rates but also included additional information that’s important to borrowers, such as time to close and amount you can borrow as well as offered discounts or promotional rates.
The score is weighted among the following loan and lender features:
- Interest Rate:50%
- Maximum Combined Loan-to-value Ratio:20%
- Closing timelines:20%
- Credit Score:10%
Bonus points:Lenders who offer some kind of discount (usually for a banking relationship) are eligible for five bonus points.
To learn more about our rating and review methodology and editorial process, check out our guide onHow Forbes Advisor Reviews Mortgage Lenders.
Frequently Asked Questions (FAQs)
What is a home equity loan?
Home equity loans allow homeowners to borrow against the equity in their homes. Equity is the difference between your home’s value minus what you owe on your mortgage. Tapping your equity through a home equity loan is just one way to access it, and unlike some types of loans, it will allow you to get the full amount upfront. But to make sure it’s worth the cost to finance, it’s important to first calculate how much you will pay in interest.
Home equity loans are popular among borrowers who want to use the funds to cover large expenses, such as home improvement projects or high-interest debt consolidation.
How do I calculate how much equity is in my home?
A rough rule of thumb is that the amount of equity you have in your home is the home’s value minus any outstanding loans on the property, like your mortgage. You can use our home equity loan calculator for a more precise calculation.
How does a home equity loan differ from a home equity line of credit (HELOC)?
Home equity loans and HELOCs are both technically second mortgages on your home. A home equity loan allows you to get a lump sum of money all at once and then repay it over time, while a line of credit gives you access to a revolving credit line that you can tap into, repay and tap again over a period of years.
Home equity loans are often a better option if you know the amount you need already—say for a child’s education or a home construction project. That’s because when you get the money all at once, you repay it according to a fixed interest rate. In contrast, a home equity line of credit offers a lot more flexibility and the ability to take some or all of the money over time—but you pay for that flexibility by agreeing to a variable interest rate that could rise, in some cases substantially, over the life of the credit line.
How do I calculate my combined loan-to-value ratio?
Your CLTV ratio is the sum of anything you owe on the house—say a mortgage and a home equity loan—divided by the value of the property. Most lenders prefer you to borrow no more than 80% of your CLTV, but some will go up to 90%.
How long does it take to get a home equity loan?
The more organized you are, the faster you will be able to get a home equity loan. So make sure you have all the required documents before applying. There will be factors, such as the timing of the home appraisal and underwriting process, that might not be under your control.
In a best case scenario, you could close on your home equity loan in a couple of weeks. However, it’s not uncommon for this process to take up to two months.
Next Up in Home Equity
- Is A Home Equity Loan A Good Idea?
- How Does A Home Equity Loan Work?
- How Much HELOC Money Can I Get?
- Best Ways To Tap Your Home Equity
- Interest-Only HELOC Ultimate Guide
- What Is A Home Equity Line Of Credit?
- Ways To Get The Best HELOC Rates
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