Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. By refinancing your mortgage, total finance charges may be higher over the life of the loan.
Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."
The best home equity line of credit (HELOC) lenders offer a wide range of loan amounts, competitive interest rates, and flexible repayment. While you can’t use Credible to find a HELOC, we’ve identified six companies that do offer these loans and reviewed the pros and cons of each one.
Here are the best lenders for a HELOC:
- Bank of America
- Flagstar Bank
- U.S. Bank
- Pentagon Federal Credit Union
- State Employees Credit Union
- Northpointe Bank
Best home equity line of credit (HELOC) lenders
Every HELOC lender has its strengths and weaknesses. You may have to compromise in some areas, but you should be able to find a loan that’s right for you by shopping around.
The following six lenders are not Credible partners, so you won’t be able to easily compare your rates with them on the Credible platform. But they may be worth considering if you’re looking for a home equity line of credit.
Bank of America
Best for: HELOC with a fixed-rate option
Bank of America is a traditional bank with a long history. It’s trying to stay competitive in a world where borrowers can often get everything they need online. Like all large institutions, its size can be both an asset and a liability.
- Convert part or all of your variable-rate HELOC balance to a fixed-rate loan with no fee ($5,000 minimum applies)
- Apply, check application status, and upload documents online
- No closing costs
- Can’t apply online if you want a line smaller than $25,000
- Doesn’t disclose maximum combined loan-to-value (CLTV) ratio
- Maximum line amount is $500,000 instead of $1 million in some locations
Best for: Borrowers seeking a midsize bank
Flagstar Bank is one of the country’s largest mortgage lenders. It offers home and personal loans nationwide as well as banking and investment services, and has 150 branches across five states.
- No closing costs if you keep your HELOC open for at least 36 months
- Lines up to $1 million
- Lines as small as $10,000
- $75 annual fee after the first year
- Max CLTV is 80%
- Can’t apply online
Best for: Borrowers seeking a national bank
U.S. Bank is one of the country’s largest banks, offering loans in all 50 states. You can also do your checking, savings, and other financial activities with U.S. Bank, which may get you a discount of up to 0.5% on a HELOC.
- No application fees or closing costs
- Lock in a fixed rate on up to three balances
- Apply online, by phone, or in person
- $90 annual fee after the first year unless you have a U.S. Bank Platinum checking account (which has a $24.95 monthly fee unless you meet certain requirements)
- Must qualify for a $100,000 line with less than 70% CLTV to be eligible for the best rates
- Maximum HELOC is $750,000 in all states except California, where the limit rises to $1 million
Pentagon Federal Credit Union
Best for: Best for borrowers seeking a national credit union
If you’re looking for a bank alternative, PenFed is a nationwide credit union that anyone can join by opening a savings account with $5. PenFed offers a full range of financial products, from certificates of deposit to HELOCs.
- Transparent about borrower requirements and APRs for different borrower scenarios
- Intro APR as low as 0.99%
- Lock in a fixed rate on part of what you borrow for up to 240 months (20 years)
- Smallest credit line is $25,000
- Max CLTV is only 80% on condos
- Smallest fixed-rate option is $10,000
State Employees Credit Union (SECU)
Best for: Borrowers seeking a midsize credit union
This member-owned, not-for-profit cooperative is an example of how smaller credit unions can fill unique needs, such as allowing teachers to skip loan payments during the summer when they aren’t earning paychecks. Along with HELOCs, it offers a full range of financial services, from insurance to financial planning.
- No application, credit report, or origination fees
- 15-year draw period instead of the standard 10
- CLTV up to 90%
- Membership is limited to certain North Carolina public employees and immediate family
- Only available for properties in North Carolina, South Carolina, Virginia, or Georgia, and members must reside in North Carolina or bordering states
- Third-party fees to open the HELOC typically cost $300 to $1,600
Best for: Competitive interest rates
Based in Grand Rapids, Michigan, Northpointe Bank offers banking, home lending, and insurance services. The bank has 64 branches across the U.S.
- Competitive interest rates relative to other big-name lenders
- Line amounts from $10,000 to $500,000
- Claims a 97% customer satisfaction rate based on its own survey
- Best rates require CLTV below 70% and autopay with a Northpointe Bank checking or savings account
- Doesn’t disclose maximum CLTV, terms, or closing costs
- Doesn’t provide as much loan information on its website as you might want
|Closing costs||Minimum line amount||Maximum line amount||Maximum CLTV|
|Bank of America||None||$15,000||$1 million||Not disclosed|
|U.S. Bank||None||$15,000||$750,000||Not disclosed|
|SECU||$300 to $1,600||Not disclosed||Not disclosed||90%|
|Northpointe Bank||Not disclosed||$10,000||$500,000||Not disclosed|
To identify the best companies for home equity lines of credit, Credible looked at data points in the following categories:
- Loan minimums and maximums
- Loan terms
- Maximum CLTV
Credible started with a list of 26 major lenders and ruled out 18 because they didn’t offer a home equity line of credit product. Credible then gathered as much information as possible from the remaining lenders’ websites to evaluate their HELOCs.
If you can’t find what you need from these six lenders’ offerings, or just want to shop around more, Credible recommends checking out local and regional credit unions and banks for more HELOC options. Or, shop with Credible to find a great rate on a cash-out refinance or personal loan.
Home equity line of credit (HELOC) FAQs
Here are the answers to some of the most commonly asked questions about HELOCs.
What is a home equity line of credit (HELOC)?
A HELOC allows you to borrow as needed against a percentage of your home equity. Since a HELOC is a secured loan, it’ll usually have a lower interest rate than unsecured forms of lending, such as credit cards and some personal loans.
You can access your line of credit to borrow money for any purpose, whether it’s related to your home or not. Your home is collateral for the loan, so you’ll want to use your HELOC carefully to avoid the possibility of foreclosure.
You might use the money to get a new air conditioning system, remodel your kitchen, or pay off a high-interest credit card. You can borrow as much or as little as you need (up to your credit limit) and pay it back with interest on flexible terms.
What is a good HELOC rate?
A traditional HELOC has a variable interest rate. In other words, the rate you pay when you first open your HELOC is subject to change. Many HELOCs have low introductory rates, which means your rate will usually go up once the introductory period ends.
The best introductory HELOC rates for highly qualified borrowers will often be one to two percentage points below prevailing rates for a 30-year, fixed-rate mortgage. For less-well-qualified borrowers, rates will be substantially higher.
What are the HELOC requirements?
Every lender has its own requirements, but these are the qualifications you’ll usually need to meet:
- Credit score: At least 680
- Debt-to-income (DTI) ratio: No higher than 43%
- Home equity: At least 20%
Lenders might adjust certain requirements up or down depending on other aspects of your finances, allowing you to compensate for a weakness in one area with a strength in another area.
What’s the difference between a home equity loan and a HELOC?
Home equity loans and HELOCs allow you to access your home equity, but the loans have several key differences:
|Home equity loan||Home equity line of credit (HELOC)|
|Disbursement||Cash up front in one lump sum||Draw cash as needed, up to limit|
|Repayment||Fixed monthly payments||Open-ended. Interest-only payments often allowed during draw period|
|Interest rate||Typically fixed||Usually variable|
|Interest charges||Interest charges apply to entire loan balance||Only pay interest on amount you draw|
|Points, closing costs, and fees||Lender may charge points, closing costs and fees||No points, closing costs may be lower|
What’s the difference between a HELOC and a cash-out refinance?
A cash-out refinance is another way to borrow from your home equity. With a cash-out refinance, you’ll take out a mortgage with a larger balance and use it to pay off your existing mortgage balance, pocketing the difference in cash. To determine if a cash-out refinance is right for you, use Credible’s cash-out refinance calculator.
Here’s how cash-out refinances compare to HELOCs:
|Cash-out refinance||Home equity line of credit (HELOC)|
|Disbursement||Cash in one lump sum||Draw cash as needed, up to the limit|
|Repayment||Fixed monthly payments||Variable monthly payments|
|Interest rate||Typically fixed||Usually variable|
|Interest charges||Interest charges apply to entire loan balance||Only pay interest on the amount you draw|
|Points, closing costs, and fees||Lender may charge points, closing costs, and fees||No points, and closing costs may be lower|
While Credible doesn’t offer home equity lines of credit, we can help you find a great rate on a cash-out refinance. With a cash-out refinance, you can access your equity and potentially lower your interest rate, all with the same loan.