Best HELOC Lenders of 2024
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A home equity line of credit, or HELOC, is a second mortgage that lets you convert some of your equity in your home back into debt in exchange for cash. Your equity is the value of your home, minus any remaining mortgage balances.
The interest rate on a HELOC tends to be lower than rates on credit cards and personal loans. Lenders use your combined-loan-to-value ratio, or CLTV, to decide if you have enough equity for a HELOC. NerdWallet has chosen some of the best HELOC lenders to help you find the one that's right for you.
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- 50+ mortgage lenders reviewed and rated by our team of experts.
- 40+ years of combined experience covering mortgages and financial topics.
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- Governed by NerdWallet's strict guidelines for editorial integrity.
Best HELOC Lenders of 2024
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Lender ▾ ▾ | NerdWallet Rating ▾ ▾ | National / regional ▾ ▾ | Max LTV ▾ ▾ | Min. credit score ▾ ▾ | Learn more |
|---|---|---|---|---|---|
 Bethpage Federal Credit Union: NMLS#449104 Top 3 most visited 🏆 Learn more at Bethpage Federal Credit Union | National | 85% | 670 | Top 3 most visited 🏆 Learn more at Bethpage Federal Credit Union | |
National | 85% | 640 | |||
National | 85% | 640 | Learn more at Rate | ||
 State Employees' Credit Union: NMLS#430055 LEARN MORE on NerdWallet | Regional | 90% | 600 | LEARN MORE on NerdWallet | |
 U.S. Bank: NMLS#402761 LEARN MORE on NerdWallet | National | 90% | 660 | LEARN MORE on NerdWallet |
Explore all of our lender picks by category
Bethpage Federal Credit Union: NMLS#449104
National
85%
670
- No closing costs
- Easy-to-join credit union.
- Fixed introductory rate is below the prime rate.
- Must pay back closing costs if the line is open for three years or less.
Figure: NMLS#1717824
85%
640
National
- Specializes in HELOCs.
- The initial balance and any additional draws have a fixed interest rate.
- Closing may be available in just five days.
- HELOCs are available for second homes.
- Short draw period of two to five years.
- Requires a $15,000 minimum initial draw.
- Lender charges origination fees up to 4.99%.
- Closing may be available within five to 10 days of applying.
- The initial balance and any additional draws have a fixed interest rate.
- Offers paths for rate discounts.
- No information about annual fees.
- Full amount (minus origination fee) must be drawn at closing.
- Short draw period of 2-5 years, compared with industry standard of 10 years.
State Employees' Credit Union: NMLS#430055
Regional
90%
600
- Long draw period of 15 years.
- Introductory rate is below the prime rate.
- Second homes are eligible for HELOCs.
- Credit union membership is limited by restrictive requirements.
U.S. Bank: NMLS#402761
National
90%
660
- Online tool lets you customize sample rate by location.
- Offers a fixed-rate payment option.
- High maximum loan amount compared with other lenders.
- Charges a fee for early repayment.
- Annual fee up to $75 (waived for certain banking customers).
- Unusually long draw period of 20 years.
- Borrowing limit of up to 95% CLTV is among the highest of lenders we review.
- No application, origination, or annual fees.
- Potential borrowers must qualify for credit union membership.
- Only one repayment term option, which is 20 years.
TD Bank: NMLS#399800
Regional
89.90
620
- Maximum borrowing limit is 89.99%, higher than the industry standard of 80%.
- Rate discount for borrowers with a TD Bank checking account.
- No minimum draw requirement.
- Borrowers pay a $99 origination fee and a $50 annual fee.
- Borrowers can apply online but must close in person.
- Best rates are reserved for lines of credit starting at $200,000.
PenFed: NMLS#401822
National
85%
680
- Some borrowers may be able to close in as little as 15 days.
- Advertised introductory rate is below the current prime rate.
- Application is available online and via mobile app.
- No origination or transaction fees.
- Annual fee of $99.
- Credit score requirements are on the higher side among lenders we review.
- Credit union membership is required to finish the application.
Truist: NMLS#399803
660
89%
National
- Choice of 5, 10, 15, 20 or 30-year repayment terms for borrowers with fixed rates.
- No initial draw required.
- No origination fees or prepayment penalties.
- $50 annual fee.
- Rates are not posted online.
- Fixed-rate draws must be at least $5,000.
PNC Bank: NMLS#446303
National
89.80%
600
- Max borrowing limit is higher than average.
- Minimum credit score requirement is lower than most competitors.
- Repayment period up to 30 years.
- Among the largest HELOC lenders by origination volume.
- Annual fee of $50.
- Borrowers in California, North Carolina and New York will pay an origination fee.
Bank of America: NMLS#399802
National
85%
660
- Charges no annual fee, application fee or closing costs.
- Publishes sample HELOC rates online.
- Offers multiple discounts, including autopay discount when using a Bank of America account.
- Charges an early account closure fee.
- Fined $12 million in 2023 for reporting inaccurate mortgage applicant info to the federal government.
Golden 1 Credit Union: NMLS#669333
Regional
80%
N/A
- Offers a fixed-rate option.
- No closing costs or annual fees.
- Credit union membership is limited to California borrowers.
Citizens Bank: NMLS#433960
National
80%
N/A
- Among the top HELOC lenders in the country by volume.
- Full application is available online.
- Closing may be available within seven days.
- No fixed-rate option.
- Annual fee of $50 after the first year.
- Repayment period is 15 years, when 20 is standard.
How a HELOC works
As a line of credit, a HELOC allows you to borrow as needed up a certain limit. As you pay it down, you’re able to continue borrowing more. This flexibility can be convenient if you’re financing a series of expenses.
Just like with your first mortgage, you could lose your home to foreclosure if you aren’t able to make payments. Because of this risk, it’s best to use your equity to reinvest in your home with projects that will increase its value.
The lender uses your home’s value to set the HELOC limit, and they’ll let you borrow a percentage of what you own. You may borrow during a draw period that lasts for several years (usually 10) and pay interest only on the balance. After the draw period ends, you may no longer take money out, and you pay the principal plus interest.
To obtain the best HELOC rates, make sure you comparison shop, preferably among at least three lenders. By shopping around, you're likely to find the combination of features and interest rate that make the best home equity line of credit for your needs. The best rates are also typically reserved for borrowers with excellent credit scores and low amounts of existing debt.
Pros and cons of HELOCs
A HELOC's main advantage is that it offers flexibility. During the draw period, the minimum monthly payment usually covers just the interest on the balance, and you aren’t required to pay principal.
A HELOC can have a variable interest rate, which means it can go up or down over time. When the interest rate rises, the minimum monthly payment may increase, too. Less commonly, some lenders offer a fixed-rate HELOC option, meaning that you can lock in some or all of the loan balance at a specific APR.
There are two major disadvantages to a HELOC: The interest rate can rise, and you can get in over your head if you're not careful. You may end up borrowing so much that you can't comfortably afford the principal and interest during the repayment period. Defaulting on a HELOC could put your home at risk of foreclosure.
Alternatives to HELOCs
A HELOC is not your only option for tapping your home's equity. If you know exactly how much you need to borrow, you may consider a home equity loan, which you receive as a lump sum and pay back at a fixed rate.
While this has less flexibility than a HELOC, payments are predictable.
» MORE: Best home equity loan lenders
If you’d like to take cash out and refinance your primary mortgage at the same time, a cash-out refinance may be the right choice for you. This replaces your original mortgage with a larger one, and you receive the difference between the value of the loan and the amount you currently owe in cash. This is likely to be your best option if rates have fallen since you closed on your mortgage.
Finally, if you cannot qualify for a HELOC but absolutely need cash flow, a shared appreciation agreement may be worth exploring. This transaction allows you to sell off a stake in your future equity earnings to a company in exchange for an advance on some of your current equity. This type of agreement is typically for homeowners with a lot of equity but little cash reserves, and most consumers are better served by a HELOC if they can get one. You risk losing out on equity profits by mortgaging the future value of your home, so think carefully before choosing this option.
More from NerdWallet
Last updated on December 16, 2024
Frequently asked questions
- What credit score do you need for a HELOC?
Lender requirements vary, but typically you'll need a credit score of 620 or higher. Taking out a HELOC will probably reduce your credit score temporarily when it appears on your credit report.
- Is a HELOC tax-deductible?
The interest you pay each year on a HELOC is tax-deductible up to a limit as long as the borrowed money is used to buy, build or substantially improve your home, according to the IRS. This requirement expires after the 2025 tax year.
Methodology
The star ratings on this page reflect each lender's performance in NerdWallet’s HELOC category. For inclusion in this roundup, lenders must offer HELOCs and achieve a star rating of 4 or above in the HELOC rubric from NerdWallet. We scored the category and chose lenders for this page using the following methodology:
NerdWallet reviewed more than 40 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (measured among lenders with at least a 1% market share), lenders with significant online search volume and those that specialize in serving various audiences across the country.
All reviewed mortgage lenders that offer HELOCs were evaluated based on (1) HELOC loan volume, (2) maximum CLTV, (3) whether they offer a fixed-rate option, (4) annual fees, (5) origination fees, (6) transaction fees, (7) initial draw requirements, (8) length of draw and repayment terms, (9) application availability online or via mobile app, (10) range of customer support options, (11) average closing time transparency, (12) interest rate transparency and (13) transparency regarding how to access funds. A recent regulatory action against a lender may affect its HELOC star rating. The highest scoring lenders appear on this page.
NerdWallet's Best HELOC Lenders of 2024
- Bethpage Federal Credit Union: Best for no closing costs
- Figure: Best for fast closing
- Rate: Best for fixed-rate borrowers
- State Employees' Credit Union: Best for North Carolina borrowers
- U.S. Bank: Best for fixed-rate borrowers
- Navy Federal: Best for military members and their families
- TD Bank: Best for high borrowing limit
- PenFed: Best for fast closing
- Truist: Best for fixed-rate borrowers
- PNC Bank: Best for high borrowing limit
- Bank of America: Best for no closing costs
- Golden 1 Credit Union: Best for California borrowers
- Citizens Bank: Best for fast closing
