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Written by Jeff Ostrowski Jeff Ostrowski
Edited by Troy Segal Troy Segal
Edited by Troy Segal Troy Segal
Updated March 12, 2024
On this page
- HELOC lenders
- How does a heloc work?
- What to consider when choosing a lender
- Do you need a home appraised for a HELOC?
- Check your credit score
The higher yourcredit score, the better your rates and the more likely you are to be approved. If you have a credit score in the mid-600s or below, work to pay off existing debt and make timely payments on your credit cards toimprove your score. - Shop Around
To make sure you're getting the best rate and terms possible, research a few lenders and take advantage of any prequalification offers available. - Gather your application materials
Many lenders will ask for your Social Security number or other identification, salary, employment information and estimated home value. Now is also a good time to collect details about your home's outstanding mortgage balance. After you apply, lenders should reach out within a few days, although some online lenders offer same-day approval. - Complete the verification process
Once you've accepted a line of credit offer, you'll have to provide verification documents, which may include pay stubs, W-2s or tax returns. You may also have to get an appraisal on your home. At this time, lenders will perform a hard credit check, which will temporarily ding your credit score. - Receive funds
The time between offer acceptance and funds disbursem*nt varies by lender, but some may make HELOC funds available in as little as one week. From there, you can use your funds as needed and begin making payments.
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On This Page
On This Page
- HELOC lenders
- How does a heloc work?
- What to consider when choosing a lender
- Do you need a home appraised for a HELOC?
Best home equity line of credit (HELOC) lenders in March 2024
As mortgage rates have moved up in recent years, home equity lines of credit have emerged as a smart option for homeowners who need funds for renovations. A HELOC is a variable-rate home equity product that works like a credit card — you have access to a credit line that you can draw from and pay back as needed.
If you’re in the market for a HELOC, Bankrate has done the homework. We’ve rated dozens of HELOC lenders to find the best deals.
| Lender | Bankrate Score | Current APR | Line of Credit Amount | Best for |
|---|---|---|---|---|
Bethpage Federal Credit Union | 4.5/5 | 6.99% | Up to $500,000 | Fixed-rate options |
BMO Harris | 4.5/5 | 7.74% | $25,000-$150,000 | Affordability |
PenFed Credit Union | 4.5/5 | Starting at 8.625% | $25,000-$500,000 | Flexible membership requirements |
Third Federal Savings and Loan | 4.5/5 | Starting at 7.49% | $10,000-$200,000 | Rate guarantee |
Figure | 4.3/5 | Not Specified | $15,000-$400,000 | Fast funding |
U.S. Bank | 4.2/5 | Starting at 8.95% | $15,000-$750,000 | Low fees at a large bank |
Aven | 4.2/5 | Starting at 7.99% | Up to $250,000 | Cashback |
Quorum Federal Credit Union | 4.1/5 | Starting at 9% | $10,000-$1 million | Investors |
Note: The above APRs are current as of January 11, 2024. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.
Bethpage Federal Credit Union: Best home equity line of credit with a fixed-rate option
Bethpage Federal Credit Union: Best home equity line of credit with a fixed-rate option
Rating: 4.5 stars out of 5
4.5
Bankrate Score
Bankrate Rating = 4.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
Bethpage is a credit union that serves over 400,000 members. The credit union offers mortgage loans, refinance loans and HELOCs.
BMO Harris Bank: Best home equity line of credit for affordability
BMO Harris Bank: Best home equity line of credit for affordability
Rating: 4.5 stars out of 5
4.5
Bankrate Score
Bankrate Rating = 4.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
BMO Harris is the eighth-largest bank in North America by assets and serves 13 million customers. A sizable financial services institution, operating in personal banking, business lending and capital markets, they recently grew even larger with their acquisition of Bank of the West.
PenFed Credit Union: Best home equity line of credit with flexible membership requirements
PenFed Credit Union: Best home equity line of credit with flexible membership requirements
Rating: 4.5 stars out of 5
4.5
Bankrate Score
Bankrate Rating = 4.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
Pentagon Federal Credit Union, or PenFed, serves 2 million members in all 50 states, Washington, D.C., and military bases in Guam, Puerto Rico and Okinawa. This credit union offers competitive rates on its HELOCs, along with other financial services, including credit cards, checking accounts, savings accounts, mortgages and auto loans.
Third Federal Savings and Loan: Best home equity line of credit with rate guarantees
Third Federal Savings and Loan: Best home equity line of credit with rate guarantees
Rating: 4.5 stars out of 5
4.5
Bankrate Score
Bankrate Rating = 4.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
Founded in 1938, Third Federal is still headquartered in its home town of Cleveland, from which it operates throughout half the U.S. Once a traditional thrift, it now offers checking and retirement accounts, as well as real estate loans and savings accounts.
Figure: Best home equity line of credit for fast funding
Figure: Best home equity line of credit for fast funding
Rating: 4.3 stars out of 5
4.3
Bankrate Score
Bankrate Rating = 4.3/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
Figure is an online lender that offers HELOCs in 41 states and Washington, D.C. Its rates include an origination fee of up to 4.99 percent and discounts for enrolling in autopay and joining one of its partner credit unions. Its HELOC works a bit like a home equity loan in the beginning: You get the full loan amount (minus the origination fee) with a fixed rate. As you pay off the line of credit, you can borrow funds again up to the limit. These draws will get a different interest rate.
U.S. Bank: Best home equity line of credit for low fees at a national bank
U.S. Bank: Best home equity line of credit for low fees at a national bank
Rating: 4.2 stars out of 5
4.2
Bankrate Score
Bankrate Rating = 4.2/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
With roots that trace back to 1863, U.S. Bank is now the fifth-largest bank by assets in the country, with about 3,000 branch locations in 27 states. It’s a solid option for low fees at a nationwide lender.
Aven: Best home equity line of credit for cash back on spending
Aven: Best home equity line of credit for cash back on spending
Rating: 4.2 stars out of 5
4.2
Bankrate Score
Bankrate Rating = 4.2/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
Aven's product isn’t a typical home equity line of credit (HELOC) or loan; it’s a credit card that leverages your home’s equity while rewarding you with cash back on spending. You’ll get a line of credit based on your tappable equity, like a HELOC, and receive unlimited 2 percent cash back on purchases, like a cash back credit card. Aven HELOC borrowers are issued a Visa card and backed by Coastal Community Bank, an FDIC-insured institution.
Quorum Federal Credit Union: Best home equity line of credit for investors
Quorum Federal Credit Union: Best home equity line of credit for investors
Rating: 4.1 stars out of 5
4.1
Bankrate Score
Bankrate Rating = 4.1/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
Quorum Federal Credit Union is an online-only credit union, though it does offer shared service centers for in-person transactions. Based in Purchase, New York, it offers a wide range of CDs, checking and savings accounts, along with fee-free access to ATMs.
Bankrate’s methodology for choosing the best home equity line of credit lenders
The 9 lenders featured here rank as “the best” because they had the highest Bankrate Scores, among home equity institutions offering HELOCs.
To determine a home equity lender's Bankrate Score, Bankrate rates lenders on a scale of one (1) to five (5) stars — with five (5) the highest rating — based on a variety of factors relating to the lender's products and services. To assign our ratings, we assessed each mortgage lender across three core areas:
- Affordability: Annual percentage rate (APR) - 80%; introductory APR - 20%
- Availability: Licensing - 50%; credit score - 20%; loan minimum - 10%; draw requirement - 10%; loan products - 10%
- Borrower experience: Rate transparency - 45%; convenience - 35%; customer service - 10%; fixed-rate options - 10%
Learn more about our methodology.
How does a HELOC work?
HELOC rates are tied to a benchmark interest rate. As the prime rate moves up or down, so does your HELOC rate. Payments vary depending on the interest rate and how much money you have used.
With a HELOC, you take a line of credit that’s available for a set time frame (known as the draw period), usually up to 10 years. While most HELOCs have an interest-only draw period, you can make both interest and principal payments to pay off the line of credit faster.
When the line of credit’s draw period expires, you enter the repayment period, which can last up to 20 years. You’ll pay back the outstanding balance that you borrowed, as well as any interest owed. A lender may allow you to renew the credit line.
Explore more:What is a HELOC?
What to consider when choosing a HELOC
When you’re shopping for a lender, you should consider a variety of factors. Among them:
- Rate. Many lenders win business by dangling attractive promotional rates that might be as much as 2 percentage points lower than the average HELOC rate.
- Qualifying requirements. Does the lender’s requirements around loan-to-value and credit score fit your financial profile?
- Availability. One obvious factor is whether the lender does business where you live. Another question to ask yourself: Do you prefer doing business with a brick-and-mortar lender or an online company?
- Flexibility. What are the lender’s policies concerning prepayment, refinancing and adjusting the credit line limit?
- Reputation: Check out the lender’s consumer reviews.
Do you have to have your home appraised in order to qualify for a HELOC?
Yes, this is a key part of HELOC underwriting. The lender orders an appraisal of your home to determine its current value. The appraiser’s assessment determines how much equity you have available, which in turn establishes the size of your line of credit. Your lender might get back to you with a preapproval or an initial decision within days; others require you to wait until the whole underwriting process is done.
What is the credit score typically required to qualify for a HELOC?
You typically need a credit score of 620 or higher to tap into your home equity through a HELOC. If you own a home and pay a mortgage, you’re likely well above that threshold. In addition, most lenders also require a combined loan-to-value ratio (CLTV) of 85 percent or less and a debt-to-income (DTI) ratio below 43 percent to approve you for a home equity line of credit.
Home equity lenders reviewed by Bankrate
- Amerant
- Amplify
- Bank of America
- Bethpage Federal Credit Union
- BMO Harris
- Chase
- Citibank
- Citizens
- Connexus Credit Union
- Credit Union of Texas
- Discover
- Fifth Third Bank
- Figure
- Flagstar Bank
- Frost Bank
- Homeside
- HSBC
- KeyBank
- Lower
- Northpointe
- PenFed Credit Union
- PNC Bank
- Police and Fire Federal Credit Union
- Prosper
- Quorum
- Republic Bank and Trust
- Regions Bank
- Rockland Trust Bank
- Spring EQ
- TD Bank
- U.S. Bank
Why trust Bankrate?
At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure our content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.
Bankrate analyzes loans to compare interest rates, fees, accessibility, online tools, repayment terms and funding speed to help readers feel confident in their financial decisions. Our meticulous research done by loan experts identifies both advantages and disadvantages to the best lenders.
When shopping for a home equity loan, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date. Check the lenders’ websites to see if there is more recent information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.
