Best Home Equity Loan Rates

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Utilizing one of the top home equity loans can save you money while giving you access to more capital. 

Home equity is a valuable resource for homeowners. Building home equity gets them closer to becoming debt-free and allows them to build wealth. However, you can also borrow against the equity you have accumulated in your property. 

Financial institutions have various fees and rates, but comparing the best home equity loans increases the likelihood of finding a good deal. The list in this article is a good starting point. It’s based on each lender’s interest rates, fees, requirements and other details. I also drew from more than five years of writing about real estate and mortgages to compile this list.

5 Best Home Equity Loans

• Best for High LTV Ratios: Navy Federal Union
• Best Online Lender: Rocket Mortgage
• Best for Traditional Financing: CrossCountry Mortgage
• Best for No Closing Costs: Discover
• Best for Rate Comparison: Credible Mortgage

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Best for High LTV Ratios: Navy Federal Credit Union

Pros: 

• Up to 100% LTV ratio across home loans
• No closing costs or origination fees
• Choose from 5- to 20-year terms
• Competitive interest rates

Cons: 

• No 30-year term
• You must become a credit union member to get a loan
• Maximum loan amount is $500,000

Navy Federal Credit Union is one of the few mortgage lenders that lets you tap into your entire home equity. While some lenders cap you at an 80% LTV, Navy Federal Credit Union offers a 100% LTV ratio. They can also borrow anywhere from $10,000 to $500,000 for a home equity loan.

The credit union has 5-year loans available for people who want to pay off debt quickly. The maximum term is 20 years, which may be unfavorable for borrowers looking for lower monthly payments. If you can stick with the shorter term, you can currently get a rate as low as 7.34% APR.

You won’t have to pay closing costs, origination fees or application costs. However, you must be a credit union member to receive this loan. You or someone in your family must have ties to the armed forces, DoD or National Guard to be eligible for membership.

Best Online Lender: Rocket Mortgage

Pros:

• Choose loan terms that range from 10 to 30 years
• You can submit financial documents online during the application process
• RateShield secures your rate for up to 90 days
• The application process only takes a few minutes

Cons:

• A 680 FICO score is required
• 2%-6% closing cost fees

Rocket Mortgage makes it easy for people to get financing online. The company has a quick application process while offering competitive home equity loans and HELOC rates. You can borrow $45,000 to $500,000 in home equity for any purchase.

However, this lender has high standards. You must have a 680 FICO score, while other lenders may give you some wiggle room if you have a 620 FICO score. Furthermore, you will have closing costs that range from 2% to 6% of the loan amount.

Rocket Mortgage offers simple online quotes and a fast online application process. It also has a rate lock program, which locks rates for certain loan types for up to 90 days, giving you time to compare rates.

Best for Traditional Financing: CrossCountry Mortgage

Pros:

• The lender has first-time homebuyer programs
• The lender works in all 50 states
• Good customer service
• You only need a 620 credit score

Cons:

• You have to get on the phone with a loan officer
• No information about APRs on its website

CrossCountry Mortgage is a large lender with mortgage offerings in all 50 states. In addition to participating in many first-time homebuyer programs, CrossCountry Mortgage has excellent educational resources on its website. 

On the downside, you cannot get an online quote. You’ll have to speak with a loan officer. However, they have good customer service, a Better Business Bureau Rating of A+, and can give you a fast quote after you take a few minutes to speak with the loan officer. You'll usually need an appraisal for a home equity loan from CrossCountry Mortgage. 

CrossCountry Mortgage's traditional application process lets you speak with a loan officer and get prequalified. You'll gain all the benefits of a home equity loan, including the flexibility to use funds for your needs. 

Best for No Closing Costs: Discover

Pros:

• No closing costs
• You only need a 620 credit score
• Terms range from 10-30 years
• Competitive rates, which currently start at 7.05% APR

Cons:

• The maximum loan amount is lower than other lenders
• The minimum loan amount is $35,000

Discover is known for its credit card reward programs, but the company also offers home equity loans at competitive rates. Discover can be a choice worth considering for your home equity loan if you’re looking for a lender with low upfront fees. Unlike some competitors, Discover’s home equity loans require $0 in cash at closing, and you won’t need to worry about appraisal, application or origination fees.

APRs on Discover home equity loans vary by credit score and qualification requirements. You will need a credit score of at least 620 points and a DTI ratio of no more than 43%. 

Discover loans are available with balances as low as $35,000 and as high as $300,000. However, you must already have at least 10% equity in your property. Terms vary between 10 and 30 years. 

Best for Rate Comparisons: Credible Mortgage

Pros:

• Compare rates from several mortgage lenders in one place
• You can easily see the eligibility requirements for each lender
• It’s a fee-free service
• Your information is kept private from lenders on the platform

Cons:

• Rates may be higher on Credible Mortgage compared to direct lenders
• You have to create an account to check rates and terms

Ready to start shopping for the best home equity loan? Credible Mortgage offers access to a wide range of products from various lenders, including major banks, credit unions and online lenders. 

This extensive network allows you to compare rates, fees and loan terms, increasing your chances of finding a great deal. 

Even more useful, Credible Mortgage provides detailed information on each lender's requirements, eligibility criteria and application processes so you can focus on lenders whose criteria you comfortably meet.

The platform also offers educational resources, such as guides and calculators, to help you make informed decisions about home equity loans.

What is a Home Equity Loan?

A home equity loan is a financial product that lets you borrow money against the equity you have accrued in your home. Melanie Musson, a finance expert with Clearsurance, explains how home equity grows over time.

“After someone buys a home, the home typically increases in value over the years,” Musson explains. “That increases their equity. Also, the owner pays mortgage payments, which decreases what they owe and increases equity. For example, if you bought a house for $500,000 10 years ago and it’s worth $750,000 now, plus you’ve paid down your mortgage balance to $400,000, you would have the difference between $750,000 and the $400,000 you owe. That means you would have $350,000 in home equity.”

You can take out a home equity loan for a primary residence, vacation home or real estate investment. You receive a lump sum and they have to make monthly payments until the term ends. Most home equity loans have terms that range from 5 to 30 years.

How Does a Home-Equity Loan Work?

You can apply for a home equity loan online, in person at banks or credit unions or by speaking to a loan officer over the phone. They will ask for basic information like your income, debt and outstanding mortgage principal balance and will verify financial information, including your credit score. Lenders will require an appraisal for the home equity loan, except for USDA, FHA or VA streamline refinance loans.

How to Calculate Your Home Equity 

To calculate home equity, compare your outstanding mortgage balance against the home’s principal value. If your home’s appraised value has increased significantly, that will affect your current equity in the home. 

What Can You Use a Home-Equity Loan For?

One of the great advantages of a home equity loan is that you can use it for nearly anything. You can use a home equity loan for:

• Remodeling
• Buying another house
• Performing major repairs
• Paying for emergency medical expenses
• Paying for car repairs
• New furniture
• Investments 
• Retirement expenses
• Vacations, weddings or other major expenses
• Consolidate credit card debt with lower interest rates
• Nearly anything else you want, except gambling

Pros and Cons of Home Equity Loans

There are pros and cons to a home-equity loan, including:

Pros

• Access funds when you need them
• Lower interest rates than other unsecured loan or credit options
• Easy to apply and qualify for, as long as you have the necessary equity in the home (minimum 20% for most lenders)

Cons

• It will take longer to pay off your home
• Taking out home equity can put you at additional financial risk of losing your home
• You'll still need to qualify for the 
• Closing costs such as a home appraisal can add to the total costs of the loan

Alternatives to a Home-Equity Loan

Here are several alternatives to a home-equity loan you can consider, including: 

• Cash-out refinancing: With a cash-out refinance vs. a home equity loan, you'll get a new mortgage and take out cash from your home equity. Find some of the best cash-out refinancing lenders here. 
• Home equity line of credit (HELOC): A HELOC works more like a revolving line with a draw and repayment period. While a home equity loan is a lump-sum payment, usually with a fixed interest rate, you can access equity with a HELOC as needed, usually with a variable interest rate. 
• Reverse mortgage: If you're over 65 and need to access equity in your home, a reverse mortgage allows you to take out cash without obligation to repay it until you move out of the home. You can find the best reverse mortgage lenders here. 

How to Choose a Home Equity Loan

You should compare multiple home equity loans before choosing the right one for your financial situation. However, there are a few details you should compare when reviewing multiple loans:

• Rates: Home equity loans with lower rates and fees will save you more money in the long run.
• Term length: While home equity loans range from 5 to 30 years, some mortgage lenders have different minimum and maximum term durations.
• Fixed or variable rate: Most lenders let you choose between fixed-rate and variable-rate home equity loans. Fixed-rate loans have the same monthly payments, while variable-rate loans have fluctuating monthly payments based on changes to interest rates.
• Requirements: Check if you fulfill the FICO score and debt-to-income ratio requirements. A 680 FICO score will boost your chances of getting approved, but some mortgage lenders accept applicants with 620 credit scores.

Should You Take Out a Home Equity Loan?

Home equity loans are crucial in providing financial assistance to homeowners who need extra cash. A home equity loan can secure more competitive interest rates and terms than other loan options. You'll want to build your credit score, check your DTI and understand your home equity to get the best rates. Regardless of your qualifications, remember to compare lenders' total rates and fees to find the best available offer! 

Why You Should Trust Us

Benzinga has guided readers on their financial journeys for over 15 years and brings on experts who know real estate and finance intricacies. 

Additionally, I am a Certified Personal Finance Counselor (CPFC) and have been a writer for Benzinga since 2021. I have also contributed to other finance publications, such as U.S. News & World Report, Business Insider and Newsweek.

Methodology 

When comparing home equity loan providers, we reviewed credit score requirements, APRs, fees and other details. A lender’s customer support and application process are also part of our methodology. You can read the full methodology here.

Benzinga Partner

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Frequently Asked Questions

Sources

Musson, Melanie. Personal interview with the author. 24 Feb. 2025.

Streamlined Refinancing. Mortgage Calculator. https://www.mortgagecalculator.org/helpful-advice/streamline-refinancing.php