With so many lenders competing for your business, borrowers are in a great position when it comes to taking out a home equity loan. Beyond offering fixed interest rates, these lenders caught our attention for their lending criteria, loan amounts and rates.
Best home equity loan lenders
These lenders tailor their home equity loans to specific kinds of borrowers.
Best for a broader view of credit: CitiMortgage
Citibank’s mortgage division offers home equity loans between $25,000 and $300,000, with repayment terms from five to 30 years. If you’re an existing customer who meets the income requirements, you could access interest rates or score closing cost credits. But for many people, the major perk of choosing Citi is its flexibility with credit.
Features:
Considers nontraditional sources of credit, such as rent and child support payments.
Flexible loan lengths — pay back your loan in 5, 10, 15, 20, 25 or 30 years.
Some borrowers can take out a loan of up to 80% of their home’s value.
Accepts a debt-to-income ratio of 43% or less.
Reserves its best rates for CitiGold and CitiPriority customers.
Best for military members: Navy Federal Credit Union
If you’re a homeowner who’s affiliated with the armed forces, Navy Federal is a solid choice. The credit union focuses on helping military members and their families and offers a maximum loan-to-value ratio (LTV) of 100% — which means qualifying borrowers can borrow for the entire value of their home.
Features:
Pays the majority of closing costs for its members.
Choose a repayment term of 5, 10, 15, or 20 years.
Earn a rate discount for setting up auto payments.
Caps its loans at $500,000, which is much higher than most lenders.
Personalized service from a team who understands your needs as an active duty servicemember or retired veteran.
With this lending giant, you can borrow as little as $15,000 or as much as $750,000 — or $1 million if you live in California. Most lenders limit their home equity loans to $250,000, so U.S. Bank stands out in a saturated market. If you’re already a customer with a checking account, you could knock 0.05% off your interest rate.
Features:
Lends up to 90% of a home’s value to qualifying borrowers.
Allows second homes as collateral in some cases.
Healthy loan lengths, so you can pay off your loan in 10, 15, 20 or 30 years.
Waives the closing costs for customers with a debt-to-income ratio of 43% or less.
Offers a 0.05% rate discount to banking customers who opt into automatic payments.
This online lender doesn’t charge closing costs or fees, and offers fixed rates that start at 4.99% — significantly below the national average. It has lower loan limits than many traditional lenders, so it’s best for those who only need to borrow $200,000 or less.
Features:
Waives the typical application, valuation and origination fees, as well as closing costs.
Willing to lend 70% to 95% of your home’s value.
You can borrow between $35,000 and $200,000.
Offers a range of repayment terms: 10, 12, 15, 20 and 30 years.
You’ll be assigned a personal banker, who will be your main point of contact for your application and any questions you have.
With this bank, if you set up auto pay, you might be privy to interest rates starting at an aggressive 4.125%. Along with competitive rates, the bank also has a maximum LTV of 89% for primary residences, 75% for secondary residences, and 70% for investment residences, which is handy if you haven’t built up a lot of equity in your home. But like other regional banks, Regions only lends to borrowers in states with a brick-and-mortar location.
Features:
Borrow between $10,000 and $250,000 depending on your property type, lien position and LTV.
Pay back your loan in 7, 10 or 15 years.
Apply by visiting one of the 1,700 branch locations across the country, mostly in the Midwest and Northeast.
To create our list of the best home equity loans, we started by confirming each lender’s legitimacy, business practices and site security. We also scanned reviews from trade and consumer forums like the Better Business Bureau and TrustPilot to get an idea of their customer service and engagement.
We weighed each lender’s rates, fees, discounts and loan limits, plus unique features such as offering home equity loans on second homes and accepting alternative forms of credit. We narrowed down a list of lenders that met multiple criteria, then further refined that list by thinking about what matters most to our readers.
While we make money from the partners we feature on finder.com, every lender had to meet our strict editorial standards to land on the list.
When you’re researching home equity lenders, work your way through these questions:
Are the APRs competitive?
What are the minimum and maximum loan amounts?
What’s the acceptable debt-to-income ratio?
What’s the maximum LTV?
What credit score do I need to apply?
Are there any closing costs or fees to consider?
Are there prepayment penalties?
Are home equity loans available in my state?
How can I contact the lender, and what level of service should I expect?
Compare home equity loan and HELOC options
Compare these lenders and lender marketplaces by the type of home equity product you're searching for, state availability and minimum credit score. Select See rates to provide the company with basic property and financial details for personalized rates.
Bottom line
The home equity loan market is competitive, so there are plenty of providers to choose from. In this roundup, we’ve honed in on the lenders that tailor their products to particular borrowers — including those who are hoping to skip closing costs, score the lowest possible rates or borrow large amounts against their home.
Home equity loan rates are calculated in a similar way to other secured personal loans. When you apply, you’ll need to provide details about your financial position and mortgage and explain why you want to take out the loan. Your lender will assess the application, and offer a loan based on your financial obligations and how much equity you have in your home.
While both types of financing use your home as collateral, a home equity line of credit (HELOC) functions more like a credit card. Rather than receiving a lump-sum payment, you withdraw funds from your line of credit as needed during the loan period, which usually lasts from five to 15 years.
The other major difference is the way you repay your lender. With the home equity loan, you’ll pay interest on the entire lump sum. But with a HELOC, you only pay interest on the amount you borrow.
Yes, if you meet your lenders’ minimum loan-to-value (LTV) requirements. Generally, you have two options: a cash-out refinance, or refinancing to a new home equity loan.
Katia Iervasi is a staff writer who hails from Australia and now calls New York home. Her writing and analysis has been featured on sites like Forbes, Best Company and Financial Advisor around the world. Armed with a BA in Communication and a journalistic eye for detail, she navigates insurance and finance topics for Finder, so you can splash your cash smartly (and be a pro when the subject pops up at dinner parties).
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