Now may not be the right time to buy a house, but with property values continuing to rise, this may be the perfect time to tap into your home’s equity for the money you need. At least, that’s what responders to our Consumer Confidence Index believe. Only 26% say that now is a good time to buy a house while the vast majority agree that it’s not, but 56% expect home prices to rise in their area. And as home values rise, so does your home’s equity.
With so many lenders competing for your business, borrowers are in an ideal position to find a competitive fixed rate on a home equity loan — and in many cases, you may not have to pay closing costs or origination fees.
What’s the current average home equity rate?
Right now, interest rates on home equity loans are fluctuating between 7.84% to 9.84%, according to Bankrate, with an average rate of 8.54% as of August 2023. However, the rate your lender offers depends primarily on your credit score as well as the loan amount and term length.
Best home equity loans
Best for comparing multiple lenders: LendingTree
LendingTree is an online loan marketplace that partners with a range of home loan lenders across the U.S. Fill out the application and if you qualify, LendingTree matches you with lenders willing to work with your credit score and loan preferences.
We chose Lending Tree for its network of over 500 lenders, ensuring you'll get a variety of offers suited to your financing needs. LendingTree claims you may get a lower rate since lenders are competing for your business. But with your information out to such a wide pool, you may receive a large number of emails and phone calls, even after you've made your selection.
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Pros
- Receive multiple offers with a single application
- May get a lower rate due to lender competition
- Alerts you on better deals
Cons
- May get a high volume of calls, emails and spam
- No guarantee you're getting the lowest rate
- Shares your personal information with partners
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| Loan Amount | $10,000 to $360,000 |
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| APR | Starting at 6.88% |
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| Min. Credit Score | 620 |
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| State availability | Available in all states |
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| NMLS # | 1136 |
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| Loan Amount | $10,000 to $360,000 |
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| APR | Starting at 6.88% |
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| Min. Credit Score | 620 |
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Read review
Best for low rates: Regions Bank
We chose this Midwest- and Southeast-based lender because it doesn't charge closing costs on its home equity loans and offers fixed rates that start at 6.25% APR with autopay as of August 2023 — lower than what many other lenders are currently charging.
With Regions, you can borrow between $15,000 and $250,000 for 7, 10, 15 and 20 years with no prepayment penalty. But customer reviews for the bank aren't the greatest.
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Pros
- 0.25% autopay discount
- No closing costs or origination fees
- Offers a full suite of banking products
Cons
- Negative customer reviews
- Only available in limited states
- Maximum borrowing limit is $250,000
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| Loan Amount | Not stated |
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| APR | HELOC: Introductory 0.99% APR for first 6 months, then 3.75% to 18%.
Home equity loans: 6.25% to 13.875% |
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| State availability | Only available in: AL, AR, FL, GA, IA, IL, IN, KY, LA, MO, MS, NC, SC, TN, TX |
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| Loan Amount | Not stated |
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| APR | HELOC: Introductory 0.99% APR for first 6 months, then 3.75% to 18%.
Home equity loans: 6.25% to 13.875% |
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Read review
Best for flexible lending requirements: U.S. Bank
We chose U.S. Bank because it considers the borrower's full credit history rather than their FICO score only when underwriting loans. Its rates start higher than lenders like Regions Bank, and it only offers two terms on its home equity loans: 10 and 15 years. But its greater flexibility could be helpful if you're rebuilding your credit, and it offers higher borrowing amounts than other lenders.
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Cons
- Not the most competitive rates
- Prepayment penalty if you pay off the loan within 30 months
- Maximum 15-year term length
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| Loan Amount | Home equity loan: $15,000 to $750,000 (up to $1 million in California); HELOC: $15,000 to $750,000 ($100,000 maximum in NY) |
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| APR | 8.95% to 13.10% |
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| Min. Credit Score | 660 |
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| State availability | Not available in: DE, SC, TX |
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| NMLS # | 402761 |
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| Loan Amount | Home equity loan: $15,000 to $750,000 (up to $1 million in California); HELOC: $15,000 to $750,000 ($100,000 maximum in NY) |
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| APR | 8.95% to 13.10% |
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| Min. Credit Score | 660 |
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Read review
Best for military members: Navy Federal Credit Union
Navy Federal Credit Union
If you're a homeowner who's affiliated with the armed forces, Navy Federal has some benefits you might not find elsewhere. In addition to competitive rates, Navy Federal Credit Union offers a maximum combined loan-to-value ratio (CLTV) of 100%, which is uncommon with home equity loans. With Navy Federal you can borrow up to $500,000 and pay your loan back over 5, 10, 15, or 20 years.
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Pros
- Competitive interest rates
- No origination or application fees
- No closing costs on loans over $250,000
Cons
- Closing costs on loans under $250,000
- Must be affiliated with the military to qualify
- Loans under $25,000 are subject to a 1% rate increase
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| Loan Amount | Up to $500,000 |
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| APR | 6.640% to 18% |
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| State availability | Available in all states |
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| NMLS # | 399807 |
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| Loan Amount | Up to $500,000 |
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| APR | 6.640% to 18% |
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Read review
Best for faster funding: Spring EQ
If you're looking for a lender that has technology to make it easier and faster to get a home equity loan, Spring EQ gets high marks from customers for its reduced paperwork application process.
The lender offers home equity loans up to $500,000 and lends to eligible borrowers at a combined LTV of 97.5% — higher than many other lenders — with repayment terms ranging from five to 30 years.
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Pros
- Get prequalified online with no hard credit check
- Digital application process may speed up loan processing
- Buy points to lower your rate
Cons
- Rates aren't the most competitive
- Online payments may not be available
- Not available in all states
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| Loan Amount | Up to $500,000 |
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| APR | Not stated |
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| Min. Credit Score | 640 |
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| Loan Amount | Up to $500,000 |
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| APR | Not stated |
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| Min. Credit Score | 640 |
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Methodology: How we choose the best home equity loan lenders
Finder’s lending experts analyze more than 25 home equity loan lenders to choose and update our top picks.
Each lender is weighed across 10 key metrics:
- Origination fees
- Loan amounts
- Credit limits
- Minimum and maximum APR
- Discounts
- Closing costs
- Customer reviews
- Requirements
- Turnaround
- Regional footprint
We regularly update our best picks as home equity products change, disappear or emerge in the market and to reflect the most competitive products available.
Compare current home equity loan rates
Use our tool to get personalized estimated rates from top lenders based on your location and financial details. Select Home Equity Loan, enter your ZIP code, credit score and information about your current home to see your personalized rates.
How to get the best home equity rate
The interest rate you get is largely determined by your FICO score, the loan term length and the amount borrowed.
Here are four tips to getting the best rate on your home equity loan:
- Increase your credit score. The best home equity loan rates are available for borrowers with FICO scores of 740 and up and debt-to-income ratios of under 43%. The higher your credit score and the lower your DTI, the better the rate you can potentially get.
- Choose a shorter loan term. Some lenders offer more competitive rates on short-term loans like seven or 10 years.
- Choose a higher loan amount. You can often get a better rate if you borrow a larger amount, but this only makes sense if you need it or you can pay the loan off early without penalty. If you’d prefer a revolving credit line or varying amounts, a HELOC may be more suitable.
- Compare multiple lenders. Every lender has different offerings, and simply comparing loans could mean significant savings. Remember to add any closing costs and origination fees into your calculation, as these affect your APR.
4 more factors to consider
When choosing a home equity loan, consider factors beyond just the advertised interest rate. Here are a 4 things to keep in mind:
- APR. The APR is the annualized interest rate you pay once all costs and fees are factored into a loan. If your loan has closing costs or origination fees, this pushes the APR up.
- Prepayment penalties. Ask if the loan carries any prepayment penalties in case you want to pay your loan off early and save on interest.
- Term length. The longer the term repayment period you choose, the lower your monthly payment will be, but the more interest you’ll pay over the loan’s life.
- Relationship discounts. You can often get 0.25% or 0.50% off your rate If you set up autopay on your loan or open a checking account, but this doesn’t guarantee you’re getting the lowest rate.
Is a home equity loan the best option?
A home equity loan isn’t the only way to tap into your home’s equity. Here are some more options for accessing cash:
- Home equity line of credit (HELOC). This is a revolving line of credit with a variable interest rate that you draw from for 10 years making interest-only payments, and repay over 20 years. Compare top HELOC lenders.
- Cash-out refinance. A cash-out refinance mortgage replaces your current mortgage with one for a greater amount, so you can “cash out” the difference. Learn more about how cash-out refis work.
- Personal loan. Personal loans typically offer borrowing amounts from $500 to $100,000 and have no collateral requirements — but interest rates will likely be higher than for a home equity loan. Compare some of the best personal loans.
Bottom line
The home equity loan market is competitive, so shop around and compare multiple lenders to get the best deal on rates, closing costs and fees. But because you’re taking on more debt with this type of product, understand the risks and benefits of home equity loans. To learn more, see our guide to home equity loans.
