Although most home equity lenders let you tap up to 85% of your home’s value, some lenders may offer high-LTV home equity loans that allow you to borrow more. Use our home equity loan calculator to estimate your home equity borrowing power.
LOAN AMOUNT | APR AS LOW AS
Rates are calculated based on conditional offers for both home equity loans and home equity lines of credit with 30-year repayment periods presented to consumers nationwide by LendingTree’s network partners in the past 30 days for each loan amount. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.
| MONTHLY PAYMENT |
|---|---|---|
$25,000 | 6.63% | $160.08 |
$50,000 | 6.63% | $320.16 |
$100,000 | 6.63% | $640.31 |
$150,000 | 6.50% | $948.10 |
Written by Rene Bermudez | Edited by Crissinda Ponder | Updated December 1, 2024Home equity loan rates are relatively high right now, especially compared to the low rates we saw before the pandemic. Rates began falling slowly in the second half of 2024, but are now starting to rise again.
Home equity rates tend to fall when the Federal Reserve cuts the federal funds rate, which it did most recently on November 7th. The Fed has one more opportunity to make an additional rate cut this year and, if they do, we can expect home equity loan rates to fall a bit further.
Senior economist |
“Home equity loan rates could see some declines, but they probably aren’t going to move down by the exact same amount as the Fed cuts its benchmark rate. In other words, would-be home equity loan borrowers might see some marginally lower rates this month, but they shouldn’t expect any major drops.” |
Ratings and reviews are from real consumers who have used the lending partner’s services.
Ratings and reviews are from real consumers who have used the lending partner’s services.
90%
$45K
680
$7,494
Rocket Mortgage offers a home equity loan for borrowers with credit scores as low as 680, though you’ll need at least a 760 score to borrow up to a 90% LTV. Rocket also offers the option to combine your first and second mortgage with a cash-out refinance.
You’ll have the best chance of qualifying for a mortgage with Rocket Mortgage if you have a 70% loan-to-value (LTV) ratio or better, according to nationwide data from 2022. That year, about 55% of approved borrowers had a debt-to-income (DTI) ratio under 40%.
5 to 30 years
100%
$500K
$4,962
Navy Federal Credit Union is the only lender we reviewed that allows qualified homeowners to borrow up to 100% of their home’s value. Military borrowers may be eligible for extra discounts and a streamlined approval process. Customer support can be contacted online, by phone or even on X (formerly Twitter). The website also provides a step-by-step guide to help you understand the timeline of your home equity loan.
You’ll have the best chance of qualifying for a mortgage with Navy Federal if you have a 77% loan-to-value (LTV) ratio or better, according to nationwide data from 2022. That year, about 51% of approved borrowers had a debt-to-income (DTI) ratio below 40%.
5 to 30 years
$10K/$500K
0.25% rate discount for eligible borrowers
$3,212
TD bank’s website is streamlined and easy to use, with a rate tool that customizes options based on your location. Terms range from five to 30 years and rate information is simple to find. TD Bank offers borrowers a 0.25% interest rate discount for its home equity loan products if you open a TD bank checking or savings account with automatic payment deductions. An added bonus: A TD Bank home equity loan can be secured by an investment property — most home equity lenders only allow you to borrow against your primary residence.
You’ll have the best chance of qualifying for a mortgage with TD Bank if you have a 64% loan-to-value (LTV) ratio or better, according to nationwide data from 2022. That year, about 56% of approved borrowers had a debt-to-income (DTI) ratio under 40%.
5 to 20 years
0.50% rate discount for eligible borrowers
$3,747
BMO Harris offers the highest discounts on home equity loan rates of any lender we reviewed. They offer loans with terms that range from five to 20 years. You can check rates online, browse detailed information about loan programs and even watch mortgage-related videos on their website. There’s also an online application and a guide to help you through the process.
You’ll have the best chance of qualifying for a mortgage with BMO Harris if you have a 64% loan-to-value (LTV) ratio or better, according to nationwide data from 2022. That year, about 55% of approved borrowers had a debt-to-income (DTI) ratio below 40%.
Ratings and reviews are from real consumers who have used the lending partner’s services.
Ratings and reviews are from real consumers who have used the lending partner’s services.
5 to 30 years
$500K
14 days
$963
Spring EQ is the only lender we reviewed that specializes exclusively in home equity loan products. You can also borrow up to 95% of your home’s value — much more than the max 85% LTV most lenders allow. Homeowners can convert equity to cash in as little as 14 days, although 21 days is the average, according to Spring EQ’s website.
You’ll have the best chance of qualifying for a mortgage with Spring EQ if you have a 74% loan-to-value (LTV) ratio or better, according to nationwide data from 2022. That year, about 52% of approved borrowers had a debt-to-income (DTI) ratio below 40%.
Every home equity offer comes with different loan terms and features. Of course you want a low interest rate, but don’t forget to evaluate the lender offering you that rate, too. Here are things to consider when shopping for a home equity loan lender:
→ Qualification requirements: Lenders can set their own requirements. If one lender is too strict, look for one with different requirements that better fit you.
→ Loan costs and fees: The lender you choose can affect your total costs and fees. Some costs are standard, but many are set by the lender.
→ Customer service: Choose a lender that offers services that work for you, like a brick-and-mortar network or digital-first capabilities.
There are many lenders to choose from, and each of them set their own home equity loan requirements. The approval guidelines are usually a bit more strict than traditional mortgages, so you should strive to:
Most home equity loans come with fixed interest rates, which means that you can enjoy consistent payments that won’t change over time. Because a home equity loan is paid out to you all at once, the amount of money you’re paying interest on never changes.
1. Your credit score
The lower your credit score, the better your rate will usually be. Most lenders will allow a 620 minimum score, but some set the bar even higher at 660 or 680. Get your free credit score on LendingTree Spring today.2. Your DTI ratio
Your debt-to-income (DTI) ratio measures how much your monthly debt load is compared to your gross monthly income. Home equity lenders typically allow a 43% maximum DTI ratio, but the lower the ratio is, the better your rate offers will be.3. Your LTV ratio
Your loan-to-value (LTV) ratio compares how much you’re borrowing to your home’s value. The typical maximum LTV ratio is 85%, though lenders offer better rates if you borrow less. But some lenders offer high-LTV home equity loans with LTVs of up to 100% if you’re willing to accept a higher rate.A home equity loan is a second mortgage that converts your home equity into cash. Home equity is the difference between how much your home is worth and the amount you owe on your outstanding mortgage balance.
When you get a home equity loan, you receive the money all at once and make fixed monthly payments to pay it off. You can use the cash from a home equity loan to make home improvements, pay down high-interest debt or cover any other expense you choose.
→ DTI ratio: 43% maximum
→ Credit score: 620 minimum
→ LTV ratio: 85% maximum
This is the standard LTV ratio maximum. However, some home equity lenders let you borrow up to 100% of your home’s value.
Yes, if the funds from the home equity loan are used for home improvements, you can deduct the interest from your taxable income. Learn more about how to get your home equity loan tax deductible.
The easiest way to figure out how much you can borrow with a home equity loan is to let our home equity loan calculator do the math for you. You’ll just need three pieces of information:
Learn more about how to calculate your home equity loan amount yourself.| Pros | Cons |
|---|---|
Lower interest rates: You’ll pay lower interest rates than you would with credit cards or personal loans. Fixed rates: Your payment will be the same each month because your rate doesn't change. Tax implications: You may be able to deduct home equity loan interest from your tax bill. One-time closing costs: Your closing costs will typically be on par with HELOC closing costs, but you won’t have any ongoing membership or inactivity fees. Very flexible: You can use the money for any purpose. | Second mortgage rates: You’ll pay a higher rate than with a HELOC or cash-out refinance. Tougher guidelines: You may need higher scores and lower debt to qualify than you would with a cash-out refinance. Reduced equity: You’ll lower the available equity in your home. Another monthly payment: You’ll have two monthly house payments. Collateral requirement: You could lose your home if you default on your payments. |
There are two main disadvantages to home equity loans:
1. A home equity loan ties new debt to your home.
This complicates your finances and puts your house at additional risk of foreclosure. If the worst happens and you can’t keep up with either your mortgage payments or your home equity loan payments, you could lose both the place you lay your head and your biggest asset all at once.
2. Home equity loans are a more expensive way to borrow money.
Other options that use your home as collateral can also save you money. However, if you find these options aren’t right for you, it can make sense to take on the heftier costs of a home equity loan.
Consumers sometimes confuse home equity loans with home equity lines of credit (HELOCs), but they work very differently. A HELOC is a line of credit that can be used like a credit card, and HELOC rates are almost always variable.
Unsure which is right for you? Read our comparison of home equity loans vs. HELOCs.A cash-out refinance gives you access to cash by replacing your existing mortgage with a larger one. It’s a first mortgage, so you can get lower interest rates than you could with second mortgages like home equity loans. A cash-out refi is also easier to qualify for.
Not sure which is right for you? Read our home equity loan vs. cash-out refinance comparison.If you prefer to leave your home equity alone, you may qualify for an unsecured personal loan. Rates on a personal loan are often higher than home equity products, but you won’t have to worry about the lender foreclosing on your home if you default on your payments.
Not sure which to choose? Read our comparison on home equity loans vs. personal loans.Let’s say you need to borrow $100,000 and you’re wondering what your best option is: a fixed-rate loan (like a home equity loan) or a variable-rate option.
You can save money by choosing a cash-out refinance, which typically offers a lower rate than a home equity loan. However, in order to access this option you have to alter your first mortgage, since you’re refinancing it.
A home equity loan may be the better choice for someone who wants a fixed interest rate, but to not touch their primary mortgage balance.
In a market with falling rates, you may be able to save by choosing a variable-rate loan, like a HELOC or adjustable-rate cash-out refinance. But if rates are rising, a these can get more expensive over time and quickly overtake the rate on a home equity loan.
A home equity loan may be a better choice for someone who wants stable payments or who is borrowing in a market with inflation and high interest rates.
Although most home equity lenders let you tap up to 85% of your home’s value, some lenders may offer high-LTV home equity loans that allow you to borrow more. Use our home equity loan calculator to estimate your home equity borrowing power.
It may take two to four weeks to close on a home equity loan. You’ll usually receive your funds following a three-business-day waiting period after your closing.
Home equity loan rates are often higher than interest rates on traditional mortgages. Usually, the more you borrow, the higher your rate will be. Your credit score and loan term also have an impact on the rate you’re offered.
Yes, it’s possible to get a home equity loan with bad credit, but you may not qualify for as much equity as you need or want. Lenders may reduce your maximum LTV ratio and charge you a significantly higher interest rate. If your scores are below 620, consider a government-backed program like an FHA cash-out refinance or VA cash-out refinance.
Don’t know your credit score? Get your free score on LendingTree Spring today.To determine the best home equity loan lenders, we reviewed data collected from 35 lender reviews completed by the LendingTree editorial staff.
Each lender review gives a rating between zero and five stars, based on several factors including loan features and loan variety, digital application processes and the availability of product and lending information online. To be eligible for the “best of” home equity loan title, lenders must have a lender review rating of at least four stars. To be considered for our “best overall” pick, lenders must issue mortgages in at least 35 states.
We awarded extra points to lenders that:
Our editorial team brought together the data from our lender reviews, as well as the scores awarded for home equity-specific characteristics, to find the lenders with a product mix, information base and guidelines that best serve the needs of home equity loan borrowers.
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