7 Best Home Equity Loan Lenders of 2024
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A home equity loan is a second mortgage that allows you to borrow against a portion of the value of your home, minus what you owe. Consider your home equity loan needs and then shop the lenders below — and if you want to consider other home equity products, read on for more options.
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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.
- Objective, comprehensive star rating system assessing 120+ categories and 5,000+ data points.
- Governed by NerdWallet's strict guidelines for editorial integrity.
Best Home Equity Loan Lenders
Rate: NMLS#2611
680
90%
National
- Maximum borrowing limit is higher than industry standard.
- Home equity loans are available for second homes.
- Borrowers must reach out for home equity loan rates.
- Home equity loan information is not available on the lender's site.
CrossCountry Mortgage: NMLS#3029
640
90%
National
- Maximum borrowing limit is higher than industry standard.
- No appraisal or application fees.
- Reported average closing timeline of 21 days is faster than many competitors.
- Interest rates are not posted online.
Better: NMLS#330511
680
90%
National
- Maximum borrowing limit is higher than industry standard.
- No closing costs or application fees.
- Home equity loans are available for second homes.
- Info about home equity loans is very limited on Better’s website.
Discover Home Loans: NMLS#684042
680
90%
National
- Maximum borrowing limit is higher than industry standard.
- No closing costs or application fees.
- Repayment terms up to 30 years.
- Minimum loan amount is $35,000.
- Borrowers can access up to 100% of equity, higher than most lenders.
- Flexible term options: 5, 10, 15 or 20 years.
- No application fee, closing costs or prepayment penalty.
- Minimum loan amount of $10,000.
- Can’t customize a rate estimate on the website.
- Credit union membership is limited to those with U.S. military connections.
PrimeLending: NMLS#13649
680
85%
National
- No application fees or closing costs.
- Offers a wide range of repayment terms.
- Available for second homes.
- Borrowers must reach out for interest rate quotes.
- No application fee or appraisal required.
- Reported average closing timeline of 20 days is faster than many competitors.
- Borrowers who apply via mobile app may get a faster response.
- Home equity loan rates are not posted online.
How a home equity loan works
As you make monthly mortgage payments, you’re building equity in your home. You’re growing the share of your home that you actually own, and once you have enough equity (typically at least 15-20%), you can borrow against it with a home equity loan and spend the cash as you wish.
You’ll receive the money you borrow as a lump sum, with a fixed interest rate. Shopping around to multiple lenders can help ensure that you get the best rate, which is determined by your debt-to-income ratio, credit score and the amount of equity that you’re borrowing, among other factors.
Our Nerds say:
"As with a first mortgage, the best interest rates for home equity loans tend to go to the borrowers with the highest credit scores and lowest amounts of monthly debt. If you’re planning to apply for a home equity loan in the near future, getting your financial profile in shape now can save you thousands in interest payments."
Estimate your home equity loan
Alternatives to a home equity loan
Home equity loans aren’t your only option for accessing equity. Along with home equity loans, HELOCs and cash-out refinances also allow you to turn some of your home equity into cash, to use as you see fit.
Your home is the collateral for all three of these loan types, so it's considered safest to use the cash in a way that will improve your financial position. That's one reason these are often used for value-adding home renovations.
Here are some of the key things to know when you're comparing home equity loans, HELOCs and cash-out refinances.
Gives you a line of credit that you borrow against as you need it, rather than requiring you to figure out an exact sum beforehand (though it's still good to have an idea of the approximate total).
Has an adjustable interest rate, which means that your interest rate will change over the life of the loan. Some lenders also offer a fixed-rate option.
Check out NerdWallet's best HELOC lenders.
Features of the loan | HELOC | Home equity loan |
|---|---|---|
Loan funding | Borrowers can draw funds as needed, up to a certain limit (typically a percentage of their equity). | Borrowers receive a lump sum at closing (typically a percentage of their equity). |
Terms | Begins with a draw period (typically 10 years) with interest-only minimum payments, followed by a repayment period (often up to 20 years) that requires borrowers to pay back principal and interest. | Repayment periods are often up to 30 years. Minimum payments include both interest and principal. |
Rates | Variable, though some lenders offer a fixed-rate option. | Fixed. |
Borrowing limits | Borrowers can typically borrow between 80% and 85% of their equity in their home, though some lenders allow for more. Use NerdWallet's HELOC calculator for personalized details. | Borrowers can typically borrow between 80% and 85% of their equity in their home, though some lenders allow for more. Use NerdWallet’s home equity loan calculator for personalized details. |
Lenders |
Replaces your mortgage with a new home loan that's greater than the amount owed on your existing mortgage. You get the difference between the higher loan amount and the amount owed as a cash payment.
Generally has a higher interest rate than a standard rate-and-term refinance, but a lower rate than home equity loans or HELOCs.
Check out NerdWallet's best lenders for a cash-out refinance.
Last updated on December 17, 2024
Frequently asked questions
- What is a good rate for a home equity loan?
Home equity loan rates vary from day to day and from one lender to another. To make sure you're getting a good home equity loan rate, compare offers from at least three lenders. It may seem simpler to get a home equity loan from your current mortgage lender, but that might not get you the best deal.
- What is the current average rate for a home equity loan?
Home equity loan rates are influenced by a base rate called the prime rate. Lenders will add a margin to the prime rate based on your borrower qualifications (including your credit score, debts and income) to calculate your rate offer.
- What credit score do you need to get a home equity loan?
To qualify for a home equity loan, you'll need a credit score that is at least 620, though many lenders will look for a higher minimum score. You may also need to have at least 20% home equity, meaning you have paid off an amount of your original mortgage that's equal to 20% or more of your home's current value.
Methodology
The star ratings on this page reflect each lender's performance in NerdWallet’s home equity loans category. For inclusion in this roundup, lenders must offer home equity loans and achieve a star rating of 4.5 or above in the home equity loan 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 home equity loans were evaluated based on (1) maximum CLTV, (2) application fees, (3) closing costs, (4) whether or not an appraisal is required, (5) range of repayment terms, (6) rate transparency, (7) digital application availability and (8) customer support options. The highest scoring lenders appear on this page.
NerdWallet solicits information from reviewed lenders on a recurring basis throughout the year. All lender-provided information is verified through lender websites and interviews.
NerdWallet's Best Home Equity Loan Lenders of 2024
- Rate: Best for high borrowing limit
- CrossCountry Mortgage: Best for high borrowing limit
- Better: Best for no closing costs
- Discover Home Loans: Best for high borrowing limit
- Navy Federal: Best for military borrowers
- PrimeLending: Best for no closing costs
- Network Capital: Best for fast closing
