Home Equity Loan Rates for July 2024

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Current Home Equity Loan Rates

LOAN AMOUNT

APR AS LOW AS

$25,000

7.13%

$50,000

6.88%

$100,000

6.88%

$150,000

6.88%

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.
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Written by Rene Bermudez | Edited by Crissinda Ponder | Updated July 10, 2024

How to get the best home equity loan rates

There are many home equity loan lenders to choose from, and each of them set their own approval guidelines. The guidelines are usually a bit more strict than traditional mortgages, so you should strive to:

  1. Boost your credit score. The lowest score that most home equity lenders accept is 620, but others may set their minimums at 660 to 680. The higher your credit score, the better your home equity loan interest rate will be.
  2. Reduce your DTI ratio. Lenders divide your total debt, including your new home equity loan, by your pretax income to find your debt-to-income (DTI) ratio. The DTI limit is usually 43%, but a lower DTI could snag you a better rate.
  3. Borrow less of your home’s value. The typical maximum loan-to-value (LTV) ratio is 85%, but lenders offer better rates if you borrow a smaller amount, which is less of your home’s value.
  4. Avoid second home or investment property home equity loans. The best home equity loan rates go to homeowners that live in their home as a primary residence.
  5. Shop around. Home equity lenders may offer special incentives to earn your business, like discounted rates if you have other deposit or credit accounts with them. Compare the costs and rates from at least three lenders to ensure you’re getting the best deal. You can start by reviewing our choices for the best home equity lenders below.

 Can I get a home equity loan with bad credit?

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.

The best home equity lenders of 2024

Best home equity loan lender for low credit scores: Rocket Mortgage

(2,614)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

(2,614)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Not disclosed

90%

$45k

680

Why we chose Rocket Mortgage

+

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.

Read our full Rocket Mortgage review.

Best home equity loan lender for online experience: TD Bank

User reviews coming soon
User reviews coming soon

5 to 30 years

$10k

$500k

0.25% rate discount for eligible borrowers

Why we chose TD Bank

+

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.

Read our full TD Bank mortgage review.

Best lender for home equity loan rates and closing cost discounts: BMO Harris

User reviews coming soon
User reviews coming soon

5 to 30 years

No upfront fees

0.50% rate discount for eligible borrowers

Why we chose BMO Harris

+

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.

Read our full BMO Harris mortgage review.

Best home equity loan lender for fast closings: Spring EQ

(726)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

(726)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

5 to 30 years

$500k

14 days

Why we chose Spring EQ

+

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 offer. Homeowners can convert equity to cash in as little as 14 days, although 21 days is the average, according to Spring EQ’s website.

Read our full Spring EQ mortgage review.

What is a home equity loan?

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.

 See how much you could borrow with a home equity loan calculator.

  Is a home equity loan tax deductible?

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.

How do home equity loan interest rates work?

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.

Average 30-year home equity loan monthly payments

Loan amountMonthly payment
$25,000$168.43
$50,000$328.46
$100,000$656.93
$150,000$985.39
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.

Home equity loan requirements

To get a home equity loan, you’ll need to meet the following home equity loan requirements:

  • 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.
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How are home equity loan rates determined?

  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.
  2. Your debt-to-income (DTI) ratio. Your 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 loan-to-value (LTV) ratio. Your LTV ratio compares how much you’re borrowing to your home’s value. Lenders see a lower LTV ratio as less risky so they can offer lower rates. Most lenders limit you to a maximum LTV of 85%, but there are some lenders who offer high-LTV home equity loans with LTVs of up to 100%.

Pros and cons of home equity loan rates

ProsCons

  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.

How do I calculate my home equity loan amount?

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:

  1. An estimate of your home’s value
  2. Your current mortgage balance
  3. Your current credit score
Note: The results are based on a maximum 85% LTV ratio.
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What is the monthly payment on a $50,000 home equity loan?

At current rates, the monthly payment on a $50,000 home equity loan is about $328.46.* You’ll typically repay a home equity loan in equal monthly installments, so these payments won’t change throughout the life of your loan.

*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.

Alternatives to home equity loans: Which has the best rates?

Home equity loan rates vs. HELOC rates

HELOC rates are usually slightly lower than home equity loan interest rates.

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 they almost always come with variable rates.

A home equity loan is best if:A HELOC is best if:
  • You want a fixed interest rate
  • You want predictable monthly payments that stay the same
  • You want money in one lump sum
  • You need all the money immediately
  • You understand that you'll have to pay interest on the full amount, whether you use all of the funds or not
  • You're OK with a variable rate
  • You don't mind having payments that change over time
  • You want a competitive interest rate for borrowing cash
  • You want ongoing access to funds, rather than a one-time lump sum
  • You want to pay interest only on the amount you use
  • You want the flexibility to access funds, pay them off and reuse that portion of your credit

 See current HELOC rates and top lenders today.

Home equity loan rates vs. cash-out refinance rates

Cash-out refinance rates are usually lower than home equity loan interest rates.

A cash-out refinance gives you access to cash by replacing your existing mortgage with a larger one. Because it’s a first mortgage, you can access that cash at lower interest rates than you could with second mortgages, like HELOCs and home equity loans. A cash-out refi also has more lenient requirements overall than a home equity loan, making it easier to qualify for. For example, you could get an FHA cash-out refinance with a credit score as low as 500.

A home equity loan is best if:A cash-out refinance is best if:
  • You want to leave your first mortgage balance alone
  • You want to save money on closing costs
  • You can get a better interest rate on a new mortgage
  • Your credit scores are too low for a home equity loan

 Learn about cash-out refinance options.

Home equity loan rates vs. personal loan rates

Personal loan rates are usually higher than home equity loan interest rates.

If you prefer to leave your home equity alone, you may qualify for an unsecured personal loan. The rates 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.

A home equity loan is best if:A personal loan is best if:
  • You want a lower rate
  • You want a longer repayment term
  • You want a lower payment
  • You need a higher loan amount
  • You don’t want to use your home as collateral
  • You don’t have enough equity to take out a home equity loan
  • You need the money faster
  • You need a lower loan amount

See top lender personal loan rates today.

Frequently asked questions

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, a home equity loan is often called a second mortgage, since it’s usually attached to a home already secured by a first mortgage. If you default on the loans secured by the home and go into foreclosure, the home equity loan will be second in line to be repaid.

How we chose our picks for the best home equity loan lenders

To determine the best home equity loan lenders, we reviewed data collected from 35 lender reviews completed by the LendingTree editorial staff in 2023.

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:

  • Publish home equity loan rates online
  • Provide detailed information about one or several different home equity loan options
  • Offer a loan-to-value (LTV) ratio above the 85% industry standard
  • Offer fast closing options
  • Offer products with rate discounts or no closing costs

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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