Our experts answer readers' home-buying questions and write unbiased product reviews (here's how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.
A home equity line of credit (HELOC) is a type of second mortgage that can be a beneficial tool for homeowners in need of cash to fund home improvement projects, debt consolidation, or other financial goals. It works similarly to a credit card, but the money you're borrowing comes from your home's equity.
The Best HELOC Lenders
- Bank of America: Best overall
- New American Funding: Best for high loan-to-value ratios
- Navy Federal Credit Union: Best for no fees
- Flagstar Bank: Best for large loan amounts
- Citizens Bank: Best for small loan amounts
- Alliant Credit Union: Best credit union
Compare the Best HELOC Lenders
Best HELOC Lenders Frequently Asked Questions
A HELOC is a line of credit that borrows from your home's equity. You'll be able to borrow money against this line of credit during the draw period.
Then, during the repayment period, you'll no longer have access to the line of credit, and you'll make regular payments to pay back what you borrowed. The term lengths can vary, but typically you'll have a 10-year draw period and a 20-year repayment period.
The minimum credit score you'll need varies from lender to lender, but you'll likely need a higher score than what was required for your first mortgage. Some lenders require scores of 660 or 680, while others require scores above 700. A few lenders allow scores as low as 620.
If you use your HELOC funds to "buy, build or substantially improve your home," the interest is tax deductible, according to the IRS. But if you use it for personal expenses, you won't be able to deduct it.
Because the amount you can borrow with a HELOC is based on the value of your property, you'll likely need to get an appraisal.
Yes, many banks are still offering HELOCs. Every lender on this list is currently offering HELOCs to qualified borrowers.
Some banks stopped offerings HELOCs at the beginning of the COVID pandemic due to economic uncertainty. Though that uncertainty has passed, some lenders never resumed their HELOC programs.
To find good HELOC rates, you'll need to shop around with different lenders and see what each individual lender offers based on both the index it uses and your individual credit profile.
The lender that gave you your first mortgage could be a good option for a HELOC, but be sure to get quotes from multiple HELOC lenders so you can compare offers and ensure you're getting the best deal.
As you shop around for a HELOC, you'll find that lenders offer a variety of different features on their loans. Which HELOC is best for you depends on what your needs are. If you're looking to avoid fees, for example, Navy Federal Credit Union might be a great choice for you. Or if you only need to borrow a small amount, you might like Citizens' GoalBuilder HELOC.
HELOCs typically require borrowers to have good credit. You may be able to get a HELOC with a credit score of 620, but many lenders have higher minimum score requirements.
HELOCs usually come with variable rates, though some lenders offer the ability for borrowers to lock in a portion of their balance at a fixed rate.
Like other types of loans, a HELOC can be a useful financial tool. But because you're using your home to secure the loan, getting a HELOC can be risky. In general, homeowners should only get a HELOC if they plan to use it to improve their overall financial situation. Some common examples are using the HELOC to consolidate high-interest debt or pay for value-boosting home improvements.
HELOC Lender Reviews
Best Overall
Bank of America
Bank of America is an overall solid option for borrowers, with a max CLTV on the more affordable end, no fees, and the ability to explore rates by state on its website.
Current Bank of America customers may be able to get a small rate discount if they set up auto payments from their checking or savings account, or if they're a Preferred Rewards member. You may also be able to receive a 0.10% discount for each $10,000 withdrawal you make.
Bank of America offers the option to convert some or all of your balance to a fixed rate. HELOCs almost always come with variable rates, though some lenders offer this option to convert some of your balance to a fixed rate after you've started making withdrawals.
What to look out for: Bank of America doesn't disclose the minimum credit score you'll need to get a HELOC, but HELOC lenders typically look for scores in the high 600s.
Best for High Loan-to-value Ratios
New American Funding
New American Funding is a good choice if you have little equity or a lower credit score.
Typically, lenders want borrowers to have higher credit scores, sometimes above 700. But New American Funding offers HELOCs to borrowers with credit scores as low as 620, which makes it a good option if you can't get approved for a HELOC elsewhere.
If you have a score above 700, you may be able to get a HELOC with this lender with a CLTV as high as 97.5% Otherwise, the max CLTV is 90%.
What to look out for: New American Funding doesn't disclose its rates online, so it's difficult to compare its overall affordability to other lenders.
Best for No Fees
Navy Federal Credit Union
Navy Federal Credit Union charges no lender fees, no annual fee, and no inactivity fee, making it an affordable option for borrowers.
With a HELOC from Navy Federal Credit Union, you can borrow up to 95% of your home's value, minus what you currently owe on your first mortgage. This is particularly beneficial for VA loan borrowers who put 0% down at closing, since they may not have a ton of equity built up in their home yet.
What to look out for: To get a HELOC with this lender, you must be a member of Navy Federal. You need to be a member of the military, a veteran, a family member of someone who has served, or a Department of Defense civilian to become a member.
The BBB gives Navy Federal an NR (No Rating) because it's currently responding to complaints that were previously closed.
Best for Large Loan Amounts
Flagstar Bank
Flagstar Bank is a good choice if you want to take out a lot of equity. Flagstar Bank offers HELOC loan amounts up to $1 million, making it a strong choice if you have a lot of equity and are funding a high-cost project.
You may also be able to get a customer discount if you have a Flagstar checking or savings account. And you won't pay lender closing fees if you keep your HELOC account open for at least three years.
What to look out for: Flagstar isn't as affordable as some of the other lenders on this list. It charges a $75 annual fee (this is waived your first year) and APRs can go up to 21%.
Best for Small Loan Amounts
Citizens Bank
Citizens Bank offers both a traditional HELOC and its GoalBuilder HELOC. Its GoalBuilder HELOC offers loan amounts as low as $5,000, making it a solid option for borrowers who only need a small line of credit.
Citizens Bank's advertised rates are relatively low, and you may be able to get a discount by setting up auto payments from your Citizens checking account.
This lender doesn't charge an application or closing fee, though you will pay a $50 annual fee (this is waived your first year).
What to look out for: Availability is limited compared to other lenders on this list, as you can't get a Citizens HELOC in most states.
Best Credit Union
Alliant Credit Union
Alliant Credit Union is an affordable choice for borrowers looking to keep their out-of-pocket costs to a minimum. It charges no lender fees at closing (for loans up to $250,000) and no annual fee on its standard HELOC. Its interest-only HELOC has an annual fee of $50 that's waived the first year.
With Alliant Credit Union, you can either get its standard HELOC or its interest-only HELOC, which allows you to make interest-only payments for the first 10 years you have the loan.
What to look out for: If you close your Alliant HELOC within a year of getting it, you'll be charged a $200 cancellation fee. Interest-only borrowers may pay slightly higher rates than standard borrowers.
How to Choose a HELOC Lender
When choosing a HELOC lender, it's important to consider how much equity you have in your home, and how much you want to borrow. Each lender has its own requirements for how much equity they'll let you take out, and different lenders may be better for smaller or larger loan amounts.
Once you've narrowed down your search to a few lenders that work for you, get quotes from each lender. Pay attention to fees they charge, and how much you could end up paying if your rate increases.
Other Lenders We Considered
- Northpointe Bank HELOC: Northpointe is one of our best mortgage lenders, but it doesn't provide information on the requirements or features that come with its home equity options.
- NBKC Bank HELOC: NBKC Bank is another strong lender overall, but its HELOCs are only available to Kansas City residents.
- Pentagon Federal Credit Union HELOC: PenFed's advertised rates were relatively high compared to the lenders that made our list.
- Truist Bank HELOC: Truist also had relatively high rates, and its availability is fairly limited.
- Guaranteed Rate HELOC: Guaranteed Rate's HELOC offering has some features that could make it expensive for borrowers.
Is There a Downside to Opening a HELOC?
HELOCs can be useful if you need to tap into your home's equity to cover certain costs, but they also put your home at risk in a way that unsecured loans, like personal loans or credit cards, don't.
"The first risk, and the most important one — you can lose your house," says Consra Rosales, a financial advisor and growth and development director for Northwestern Mutual.
Because you're borrowing from your home's equity, if you end up defaulting, the lender could ultimately foreclose on your home.
But there are some potential benefits to getting a HELOC over other loan options, such as a home equity loan, cash-out refinance, a personal loan, or a credit card.
HELOCs have the benefit of only charging interest on what you borrow, so you don't have to worry about inadvertently taking out more than you need and paying interest on a lump sum amount.
Rosales gives an example of a borrower needing $50,000 for a home upgrade but then finding they can complete the upgrade for just $25,000.
"So even though you have the $50,000 available, you can tap into the $25,000," Rosales says. "So that means, of course, you can manage that money, but you don't have to get into debt for the $50,000."
With a home equity loan, on the other hand, you'd get that $50,000 as a lump sum and you'd pay interest on all of it, regardless of how much your project actually ends up costing.
HELOCs also often have lower rates than some alternatives, like credit cards or personal loans.
Why You Should Trust Us: How Did We Choose the Best HELOC Lenders?
We looked at the top mortgage lenders in the US that offer home equity lines of credit to find the lenders that stand out. We then evaluated them based on four main criteria:
- Affordability. We evaluated affordability based on rates, fees, and max CLTV. When looking at rates, we looked at both the lender's current advertised APR and its minimum and maximum APR. We looked at whether the lender charges any fees at closing or an annual fee. HELOCs typically come with some third-party closing costs, but some lenders will also add other charges as well, such as an application or origination fee. Many of the lenders on this list don't have these costs, though some charge a small annual fee.
- Customer satisfaction. We looked at online customer reviews to gauge how satisfied customers are with each lender.
- Trustworthiness. Almost all of our top picks earned an A+ rating from the BBB, with the exception of Navy Federal Credit Union, which has an NR ("No Rating"). We also considered any recent public scandals from the last three years.
- Availability. Many lenders only offer HELOCs in certain states. Most of our picks lend nationwide with the exception of one or two states. Citizens Bank and Alliant Credit Union have a slightly more limited reach, but we felt they were still strong options for borrowers in states where they're available.