Compare Home Equity Loan Lenders – Unlock Your Equity
A home equity loan is a good source of money for major projects and one-time expenses because it’s a lump-sum equity draw. It lets you borrow money using your home as collateral. You'll get a lump-sum payment and repay the loan with fixed-rate interest over a predetermined term. Explore our selected home equity and cash-out refi lenders.
Compare Home Equity Loan Lenders – Unlock Your Equity
Rocket Mortgage, LLC: NMLS#3030
National
80%
680
- No application fee.
- Borrowers can apply within the lender’s mobile app.
- Home equity loans are available for second homes and investment properties.
- Home equity loan rates are not posted online.
- Home appraisal is required.
Farmers Bank of Kansas City: NMLS#613839
National
100%
660
- No annual fee.
- Offers a high borrowing limit compared to other lenders.
- Doesn’t charge a penalty for early repayment.
- Doesn’t offer a fixed repayment option.
- Rates and fee information are not published online.
BMO: NMLS#401052
National
75%
620
- Offers 5-, 10-, 15- and 20-year terms.
- Displays interest rates, including APR, for home equity loans.
- Borrowers can apply for and track loans online.
- May charge a penalty for early repayment.
- Doesn’t offer home equity loans for investment properties or second homes.
NerdWallet's Compare Home Equity Loan Lenders – Unlock Your Equity
- Rocket Mortgage, LLC
- Farmers Bank of Kansas City
- BMO
Frequently asked questions
- How does a home equity loan work?
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 and spend the cash as you wish.
You’ll receive it all at once in the form of a loan, which is why a home equity loan can be a popular choice for borrowers who know exactly how much they’ll need to accomplish their goals. 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.
- How do you get a good home equity loan rate?
Your credit score is a major factor influencing your interest rate. You're more likely to be approved for a home equity loan with a credit score of 700 or higher. The lowest rates tend to go to borrowers with credit scores of 740 or higher.
Interest rates also vary by loan term.
Mortgages with longer terms tend to have higher interest rates. That's the case with home equity loans, too. In NerdWallet's survey of home equity loans, the average rate on loans with 15-year terms is usually higher than on loans with 10-year terms, which usually have higher rates than loans with five-year terms. This isn't an ironclad rule, though. Sometimes, some lenders charge lower rates for loans with longer terms. That's why it pays to shop around for a home equity loan.
Some lenders will give a discount on a home equity loan's interest rate if you have another account with the bank.
- Is it worth getting a home equity loan?
If you need a large amount of cash, a home equity loan will likely get you a lower interest rate than a comparable personal loan. But if you need to borrow $10,000 or less, a personal loan, or even a credit card, could do the job — and you won't be using your home as collateral.
