Best Home Equity Loan Lenders of 2024

Best if you don’t have much equity: Discover
Discover® Home Equity Loan Learn More Annual Percentage Rate (APR) Apply online for personalized rates
Loan minimum and maximum $35,000 minimum, $300,000 maximum
Terms available 10,15, 20, 30 years
Credit needed 680
Minimum equity required 10% Pros Accepts combined loan-to-value ratio of 90%.
No origination fees, appraisal fees or prepayment penalty
Mortgage refinancing available Cons No purchase mortgages or HELOCs
No in-person branches
$35,000 loan minimum is higher than most
$300,000 loan maximum is lower than most Learn More View More
Who’s this for? Discover only requires borrowers to have 10% equity in their home, much less than most lenders. Standout benefits: Discover has lower-than-average interest rates on home equity loans and doesn’t charge a lender fee or closing costs. [ Jump to more details ]
Best for low interest rate: Third Federal Savings and Loan
Third Federal Savings & Loan Learn More Annual Percentage Rate (APR) Apply online for personalized rates
Types of loans Conventional loan, jumbo loan, refinancing, HELOC
Terms 10-30 years
Credit needed Not disclosed
Minimum down payment 3% for conventional loan Terms apply. Pros Guarantees lowest rate or will give borrower rate reduction or up to $1,000.
Offers low closing cost options.
No closing fees for HELOC Cons Doesn’t offer USDA, FHA or VA loans
Available in only half of U.S. states Learn More View More
Who’s this for? If Third Federal is unable to provide you with a lower mortgage rate, it will
pay you $1,000 after you close with its competitor on the quoted terms and time frame.
Standout benefits: Unlike many lenders, Third Federal offers both fixed- and adjustable-rate loans and allows borrowers to use a vacation home as collateral.
Best for a credit score below 680: TD Bank
TD Bank Home Equity Loan Learn More Annual Percentage Rate (APR) Apply online for personalized rates
Loan minimum and maximum Minimum: $10,000; Maximum: $500,000 without additional requirements
Terms available 5 to 30 years
Credit needed 660
Minimum equity required 10% Pros Higher-than-average combined loan-to-value ratio at 90%
Online application available
Many brick-and-mortar locations
High maximum loan total
Low minimum loan total Cons Several one-time and yearly fees
Only available in 15 states Learn More View More
Who’s this for? TD Bank accepts home equity loan applicants with scores as low as 660, compared to the 680 most lenders require. Standout benefits: TD Bank is also great for small loans. You can take out as little as $10,000 (or as much as $500,000). Its origination fee is $99, less than most lenders. [ Jump to more details ]
Best for rate discount: Flagstar Bank
Flagstar Bank Home Equity Loan Learn More Annual Percentage Rate (APR) Apply online for personalized rates
Loan minimum and maximum Minimum: $10,000; Maximum: $1 million
Terms available 10, 15 or 20 years
Credit needed 680
Minimum equity required 20% Pros No closing or prepayment costs
High maximum
Low minimum Cons Minimum equity is higher than most other lenders Learn More View More
Who’s this for? Existing customers can receive a rate discount of 0.25% when they set up autopay with a Flagstar bank account. Standout benefits: Flagstar doesn’t charge closing fees and approves home equity loans for as little as $10,000 and as much as $1 million, compared to a range of $35,000 to $300,000 with many lenders. [ Jump to more details ]
Best for no loan-to-value ratio: Rocket Mortgage
Rocket Mortgage Home Equity Loan Learn More Annual Percentage Rate (APR) Apply online for personalized rates
Loan minimum and maximum Minimum: $45,000; Maximum: $500,000
Terms available 10, 20 years
Credit needed 680
Minimum equity required 10% Pros Higher-than-average combined loan-to-value ratio at 90%
High customer satisfaction reviews
Excellent online user experience Cons High minimum loan total at $45,000
No brick-and-mortar locations
Only provides two term options: 10 years and 20 years
Minimum is relatively high Learn More View More
Who’s this for? While most lenders cap loans at 85% of your home equity, Rocket Mortgage will go as high as 90%. Standout benefits: Rocket’s website provides clear rate and term information, and its mobile app is easy to use. The lender is known for exceptional customer service and is highly rated by JD Power and the Better Business Bureau. [ Jump to more details ]
More on our top home equity loan lenders
Discover
Discover Bank started in 1985, when big box retailer Sears added financial services. Today, Discover issues credit cards, checking and savings accounts, loans and other financial products. In February 2024, Capital One announced its plan to acquire Discover. Minimum/maximum loan amount
$35,000 to $300,000 Repayment terms
10, 15, 20 or 30 years Loan-to-value ratio
90% [ Return to summary ]
Third Federal Savings and Loan
Founded in Cleveland in 1938, Third Federal went public in 2007. It operates in 20 U.S. states but only issues home equity loans in California, Florida, Kentucky, New Jersey, North Carolina, Ohio, Pennsylvania and Virginia.
Minimum/maximum loan amount
$10,000 to $300,000 Repayment terms
Fixed-rate: 5 or 10 years, adjustable-rate: 30 years Loan-to-value ratio
79.99% [ Return to summary ]
TD Bank
Dating back to 1852, TD Bank is the tenth largest bank in the U.S. by consolidated assets, according to the Federal Reserve. It issues home equity loans in Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and Washington, D.C.. Minimum/maximum loan amount
$10,000 to $500,000 Repayment terms
5, 10, 15, 20 or 30 years Loan-to-value ratio
89.99% [ Return to summary ]
Flagstar Bank
Founded as First Security Savings Bank in 1987, Flagstar was acquired by New York Community Bank in 2022 and currently has 390 locations across 10 states. It earned an A- from the Better Business Bureau, but ranked below average on the J.D. Power 2024 U.S. Mortgage Servicer Satisfaction Study. Minimum/maximum loan amount
$10,000 to $1 million Repayment terms
10, 15 or 20 years Loan-to-value ratio
80% [ Return to summary ]
Rocket Mortgage
The second largest mortgage provider in the U.S., online lender Rocket Mortgage originated nearly 289,000 home loans in 2023, worth $78 billion. It was ranked second for customer satisfaction with mortgage origination by J.D. Power and came in first for mortgage servicing. Minimum/maximum loan amount
$45,000 to $500,000 Repayment terms
10 or 20 years Loan-to-value ratio
90% [ Return to summary ]
What is a home equity loan?
A home equity loan is a kind of second mortgage — a lump sum loan backed by your home’s value. Not all lenders offer home equity loans, but borrowers are attracted to them because they have lower interest rates than credit cards or personal loans. Most lenders approve home equity loans for 80% of the house’s value, but some go as high as 85% or even 90%. And while you typically need 20% equity for approval, some lenders accept 15%. A home equity loan can be a good option if you need to renovate, pay for education or have a medical emergency. Since your house is collateral, however, you could lose your home if you fail to make timely payments.
Some lenders are more flexible: For example, TD Bank approved home equity loans for borrowers with credit scores as low as 640, while Rocket Mortgage accepts applicants with as little as 10% home equity.
Alternatives to home equity’s
There are several alternatives to home equity loans, some of which won’t use home as collateral. Home equity line of credit (HELOC) HELOCs are secured lines of credit that use your home as collateral. There’s typically a 10-year draw period and a 20-year repayment period. Because a HELOC is backed by your home, the lender could force you into foreclosure. A HELOC might be better than a home equity loan if you have a large, ongoing project or renovation expense and are unsure how much you will need. During your draw period, you can withdraw as many times as you need up to your limit. Home equity sharing With home equity sharing, homeowners get cash in exchange for a slice of their home’s future value. Here’s how it works: An investor pays you for a portion of your home. That amount is due 30 years later or whenever you sell (whichever comes first). You won’t have to make payments until then and you won’t have to pay interest.
Instead, the investor uses a risk adjustment rate to levy an interest-like payment on the property. Depending on if and how much your house has appreciated, this amount could be far higher than what you’d pay on a home equity loan or HELOC. Home equity sharing agreements typically have laxer credit requirements, so they appeal to homeowners who are cash-poor or have weak credit. And the one-time repayment means that you won’t need to come up with extra money every month. But your investor can foreclose on your property if you fail to pay when the term is due. Cash-out refinance With a cash-out refinance, you get a new mortgage that replaces your original loan with a larger amount. After the original balance is paid off, you can take the remainder in cash. Unlike other forms of financing, you’ll only have one payment — and your rate will probably be lower. But you’ll typically need to have at least 20% equity and a 620 credit score to get a cash out refinance. Personal loan A personal loan is an unsecured debt, so your home isn’t at risk of foreclosure. In addition, the credit score requirements are usually more generous. Lenders usually cap personal loans at $50,000 or $100,000, however, and they typically have higher interest rates and shorter repayment terms. In addition, you won’t be able to deduct the interest on a personal loan even if you use it for home renovations.
Home equity loan: Pros and cons
Pros Lower rate than personal loans or credit cards
Larger limit than personal loans
If used for renovations, interest is tax deductible
Cons 15% to 20% home equity required
You could end up with negative equity
Missed payments could lead to foreclosure
FAQs How long are home equity loan terms? Lenders typically offer home equity loans with repayment terms of five to 30 years, which is considerably longer than a personal loan or credit card. Can I get a home equity loan on an inherited property? Yes, you can take out a home equity loan on an inherited property. The money could be used to buy out other heirs, make repairs, pay off the mortgage or cover legal fees relating to the estate, among other uses. Is a home equity loan the same as refinancing? Refinancing involves taking out a new mortgage that replaces your existing home loan. A home equity loan is a second mortgage with an interest rate and term. However, you can use a cash-out refinance to secure extra funds. Can you get a home equity loan with bad credit? While lenders typically require a minimum credit score of 680 for a home equity loan, some, like TD Bank, will approve borrowers with a score in the fair range (the low 600s), especially if you have a lower LTV. If you have poor credit, you may want to consider a co-signer to improve your chances. How much can you borrow with a home equity loan? Most lenders cap home equity loans at 80% of the equity you have in your property. Depending on your credit score and income, some will lend as much as 85% or 90%.
Subscribe to the CNBC Select Newsletter! Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance guide is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of personal finance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
Our methodology
CNBC Select analyzed dozens of U.S. lenders to determine which home equity lenders were the best. When narrowing down and ranking the best home equity loans, we focused on the following features: Fees: Common fees include origination fees, application fees, underwriting fees, processing fees, administrative fees and closing costs. We evaluate these fees in addition to other features when determining the overall offer from each lender.
Common fees include origination fees, application fees, underwriting fees, processing fees, administrative fees and closing costs. We evaluate these fees in addition to other features when determining the overall offer from each lender. Loan amounts/terms : To determine the best home equity lenders, we also considered a lender’s interest rate, maximum and minimum loan amounts and maximum loan-to-value ratio.
: To determine the best home equity lenders, we also considered a lender’s interest rate, maximum and minimum loan amounts and maximum loan-to-value ratio. Approval requirements: Lenders were eviewed based on maximum debt-to-income ratio, minimum home equity allowed and credit score needed, among other cited requirements.
Lenders were eviewed based on maximum debt-to-income ratio, minimum home equity allowed and credit score needed, among other cited requirements. Streamlined application process: We considered whether lenders offered an online application process and/or an in-person procedure at local branches.
We considered whether lenders offered an online application process and/or an in-person procedure at local branches. Customer support: Every mortgage lender on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances. We sorted our choices by best for low equity, for fair credit, for high loan-to-value ratio and for large and small loan amounts. We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools. Rates and fee structures cited for mortgages may fluctuate in accordance with the Fed rate and company policies.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.