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A home equity loan is a type of second mortgage that lets you take equity out of your home to use for things like home renovations, debt consolidation, or other major expenses.
The Best Home Equity Loan Lenders
- U.S. Bank Home Equity Loan: Best overall
- Navy Federal Credit Union Home Equity Loan: Best overall, runner-up
- Discover Home Equity Loan: Best for lower credit scores
- Flagstar Home Equity Loan: Best for large loan amounts
- Connexus Home Equity Loan: Best for small loan amounts
Keep reading for details on our picks for the top home equity loan companies.
Compare the Best Home Equity Loan Lenders
Best Home Equity Loan Lenders Frequently Asked Questions
A home equity loan is a second mortgage that borrows from the equity you have in your home.
Equity is what your home is worth minus any outstanding mortgages you have on the property. For example, if your home is worth $300,000 and you still owe $100,000 on your mortgage, you have $200,000 in equity. With a home equity loan, you could borrow from that $200,000 to do things like make repairs or upgrade your home.
Home equity loans are installment loans, meaning you'll receive your funds in one lump sum at closing and then pay it back over a specified period of time in regular, equal payments. Home equity loans come with fixed interest rates, so your rate and payment amount will remain the same throughout the life of the loan.
Because a home equity loan is a mortgage, the lender can foreclose on your home if you stop making payments. This is what makes these loans risky. If you default on a personal loan or credit card, for example, your credit will take a big hit, but you won't have to worry about losing your home.
If you use your home equity loan 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.
We've gathered our top picks for the best home equity loan lenders here, but the best one for you depends on your needs and current financial situation. It's generally a good idea to shop around with a few lenders to see which offers you the best deal in terms of rates and fees.
Lenders often look for scores of at least 680, though some may have requirements that are higher or lower than this.
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U.S. Bank Home Equity Loan
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Navy Federal Credit Union Home Equity Loan
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Discover Home Equity Loan
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Flagstar Home Equity Loan
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Connexus Home Equity Loan
Home Equity Loan Lender Reviews
Best Overall
U.S. Bank
U.S. Bank is a strong lender overall for home equity loans, with no closing costs, a wide range of loan amounts, and a discount for existing customers.
This lender offers home equity loan amounts from $15,000 to $750,000, which is a wider range than what many other lenders offer. You can get a loan with a term up to 30 years.
If you have a U.S. Bank checking or savings account, you could get a 0.5% rate discount if you set up automatic payments.
What to look out for: U.S. Bank home equity loans aren't available in Delaware, South Carolina, or Texas
Best Overall, Runner-up
Navy Federal Credit Union
Navy Federal Credit Union is a great home equity loan lender for those who qualify for a Navy Federal membership. It offers competitive rates, a good selection of term lengths, and no fees.
This lender is a strong option for VA loan borrowers, who might not have a ton of equity built up if they put 0% down on their home when they purchased it. It also has good online customer reviews.
What to look out for: Navy Federal is our "best overall" runner-up because, while it's a very strong lender overall, you have to be a member of Navy Federal Credit Union to get a loan with this lender. To qualify, 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.
The BBB gives Navy Federal an NR (No Rating) because it's currently responding to complaints that were previously closed.
Best for Lower Credit Scores
Discover
Discover is an affordable home equity loan lender that accepts borrowers with scores of at least 620, which is lower than what many other lenders require. Typically, lenders look for scores of at least 680, though some require scores above 700.
Discover offers home equity loans with 10-, 15-, 20-, and 30-year terms and loan amounts from $35,000 to $300,000.
Discover doesn't charge any closing costs, and it will also pay any third-party costs you incur.
What to look out for: If you pay off your loan within three years, you'll have to reimburse Discover for some of the closing costs, up to $500. This fee doesn't apply if you live in Connecticut, Minnesota, North Carolina, New York, Oklahoma, or Texas.
Best for Large Loan Amounts
Flagstar Bank
Flagstar Bank is a good option for borrowers who need larger loan amounts, since you can get a home equity loan for up to $1 million.
If you qualify, you can get a home equity loan from Flagstar for any amount between $10,000 and $1 million. It also charges no lender fees, though you still may need to pay some third-party fees at closing.
If you have a bank account with Flagstar, you could potentially get a 0.25% rate discount if you set up automatic loan payments from your account.
What to look out for: Flagstar home equity loans aren't available in Texas.
Best for Small Loan Amounts
Connexus Credit Union
Connexus Credit Union offers smaller loan amounts, shorter terms, and a higher max CLTV, making it an affordable choice for borrowers looking to fund smaller projects or keep their interest costs down.
With Connexus Credit Union, borrowers can get a home equity loan with a term of just five years with loan amounts as low as $5,000. If you want to limit your overall interest costs, a shorter term is often a good choice because you'll spend less time paying back the loan.
What to look out for: Connexus doesn't disclose whether it charges its own closing fees, but says borrower closing costs can range from $175 to $2,000. Connexus home equity loans aren't available in Maryland, Texas, Hawaii, or Alaska.
How to Choose a Home Equity Loan Lender
As you search for the right home equity loan lender for you, consider the loan amounts a lender offers as well as the amount of equity it will let you take out of your home. You want to make sure the lenders you're considering can meet your needs.
Reach out to at least two or three different lenders to get quotes so you can compare costs. Be sure to consider both the rates you're offered as well as any fees the lender charges.
Other Home Equity Loan Lenders We Considered
- Northpointe Home Equity Loan: 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.
- Rocket Mortgage Home Equity Loan: Rocket Mortgage is our favorite lender for refinancing, but it doesn't disclose rates or other information for its home equity loans.
- TD Bank Home Equity Loan: This lender's home equity loan offerings aren't available in most states.
- New American Funding HELOC: Regions is a solid home equity loan lender, but it's only available in certain states.
Why You Should Trust Us: How Did We Choose the Best Home Equity Loan Lenders?
We looked at the top mortgage lenders in the US that offer home equity loans to find our favorites. We then evaluated them based on four main criteria:
- Affordability. We evaluated home equity loan affordability based on rates, fees, and max CLTV. When looking at rates, we looked at both the lender's current advertised APR and, where available, its minimum and maximum APR. For fees, we looked at whether the lender charges any application or closing fees. Home equity loans typically come with some third-party closing costs, but some lenders will also charge their own fees, as well. All of our top picks say they don't charge lender closing costs, with the exception of Connexus, which doesn't disclose whether it charges any additional fees.
- Customer satisfaction. We looked at online customer reviews to gauge how satisfied customers are with each lender.
- Trustworthiness. Most of our top picks have an A- or better rating from the BBB. We also considered any recent public scandals from the last three years.
- Availability. Some lenders only offer home equity loans in certain states, so we looked at where each lender offers home equity loans. All of our picks lend in most states, and typically only have one or two states where they don't lend.