LOAN AMOUNT |
APR AS LOW AS |
|---|---|
|
$25,000 |
7.38% |
|
$50,000 |
7.38% |
|
$100,000 |
7.38% |
Pay off credit card balances (or keep them low) and make on-time payments before applying for a HELOC. Lenders typically reward higher-credit-score borrowers with the best HELOC rates.
A lower loan-to-value (LTV) ratio often comes with lower HELOC rates — in other words, only borrow what you need, especially if you plan to sell your home in the near future. The more equity you use with a HELOC, the less you’ll get to pocket as cash when you sell.
Check out HELOC rates from at least three to five lenders, and don’t forget lenders you already bank with. Comparison shopping can save you thousands of dollars over the long haul, according to LendingTree data. Start by choosing three to five lenders — and if you don’t know where to begin, check out our list below.
| Lender | LendingTree rating and "best of" category | Available loan terms | Lender review |
|---|---|---|---|
 |  High loan amounts | 10-year draw period 20-year repayment period | Read our review |
 | Quick closing | 2- to 5-year draw period 5- to 30-year repayment periods | Read our review |
 | HELOCs with no closing costs | Not disclosed | Read our review |
 |  High-LTV HELOCs | 20-year draw period 20-year repayment period | Read our review |
 |  Fixed-rate HELOCs | Variable-rate HELOCs: 10-year draw period with a 20-year repayment period Fixed-rate HELOCs: 5- to 30-year repayment periods | Read our review |
Learn more about how we created our best lenders list.
| Available HELOC terms | 10-year draw period with a 20-year repayment period |
| LendingTree rating | Read review |
Flagstar, a large regional bank based in New York, offers HELOCs in 49 states (excluding only Texas) in amounts ranging from $10,000 to $1 million. You’ll even have the flexibility to secure the loan with a primary or secondary residence. Just keep in mind their maximum LTV is still 85%, even with a higher loan amount.
| Available HELOC terms | 2- to 5-year draw period, 5- to 30-year repayment periods |
| LendingTree rating | Read review |
If you’re looking for a speedy closing, you’ll likely appreciate Guaranteed Rate’s 100% digital application process and option to “FlashClose” — that is, sign most of your closing documents online. Guaranteed Rate boasts a five- to 10-minute application process and a five- to 10-day wait for funds. That’s quite fast compared to the 45-to-60 days you could wait with a traditional HELOC lender.
| Available HELOC terms | Not disclosed |
| LendingTree rating | Read review |
As a national bank, Bank of America offers the convenience of accessibility — regardless of where you live or any changes life throws your way, you’ll likely be able to access a branch. And if you’re looking for a lender advertising HELOCs with no closing costs, Bank of America has that and more — plus, they also charge no application fees and no annual HELOC fees. In addition, there are several ways to earn rate discounts on your HELOC, but you’ll need to have a Bank of America checking account to utilize most of them.
| Available HELOC terms | 20-year draw period with a 20-year repayment period |
| LendingTree rating | Read review |
Navy Federal CU serves active duty service members, veterans, members of the U.S. Department of Defense and their immediate families and household members. Their HELOCs — which allow a maximum combined loan-to-value ratio (for primary and secondary residences) of 95% — were among the most generous of the lenders surveyed. And with a solid online experience and 24/7 customer support, Navy Federal could be your best bet if you’re looking for a high-LTV HELOC.
| Available HELOC terms | 10-year draw period with:
|
| LendingTree rating | Read review |
Truist allows you to take out a variable-rate HELOC — and, if you choose, you can lock in a fixed rate on up to five draws at a time (you’ll have to draw at least $5,000 to take advantage of this option). You can expect APRs ranging from 8.78% to 16% depending on your credit score, how much you’re borrowing and which repayment period you’ve chosen. Truist lends to customers in every state but three: Alaska, Arizona and Hawaii.
You may have noticed mortgage interest rate forecasts calling for lower rates this year — unfortunately, that’s not the prediction for HELOC rates. HELOCs don’t necessarily move in the same direction that mortgage rates do, says Jacob Channel, senior economist for LendingTree. That’s because they’re directly tied to a benchmark called the prime rate.
When the prime rate rose from 7.75% to 8% in March 2023 after the Federal Reserve raised the federal funds rate, HELOC rates rose in tandem. Regulators raised interest rates again by 0.25% in July, and there could be be additional hikes in the near future.
Plus, if job reports continue to show low unemployment and inflation remains high, HELOC rates will probably continue to increase, even if mortgage rates fall or stay the same, Channel adds.
Most home equity lines of credit come with variable rates, meaning that their interest rates — and monthly payment amounts — can change over time. Each lender determines how an individual HELOC’s interest rate is calculated, but the same factors are always included.
Borrowing 80% or less of your home’s value is likely to get you lower rates, although most HELOC lenders allow you to borrow up to 85%. The more equity you leave in your home, the better your HELOC rate will be.
How much can you borrow? Use our HELOC calculator to see how much home equity you could get.
A 780 score or higher is recommended to get the lowest HELOC rate offered. However, some lenders allow a 620 minimum.
Your DTI ratio measures your gross monthly income relative to your monthly debt, and keeping it low will help drive your HELOC rate down. The less monthly debt you have compared to your income, the better. HELOC lenders typically allow a maximum 43% DTI ratio.
Similar to adjustable-rate mortgages, HELOCs have interest rates that change on a specific schedule. Lenders are required to tell you how they’ll calculate your rates before you close on the loan. There are three factors that figure into your rate adjustments:
Your LTV ratio measures how much of your home’s value you’re financing. Most lenders require you to maintain at least 15% equity in your home, which limits you to a maximum LTV of 85%. There are some lenders who offer high-LTV HELOCs with LTVs of up to 100% — but you’ll usually have to accept a higher interest rate.
What is an introductory or “teaser” rate?You may be offered a lower rate, called a “teaser” rate, for an introductory period. For example, a lender might discount the rate for the first six months. After the teaser rate ends, though, the rate typically increases based on the margin and index in your agreement.
| Pros | Cons |
|---|---|
| You’re only charged interest on the amount you use | Your rate is variable and could increase over time |
| You don’t pay any interest on the unused portion of your credit line | You may need a higher minimum credit score to qualify than you would for a standard loan |
| You can make interest-only payments if your lender offers the option | You may have a large balloon payment due after the interest-only draw period ends |
| Your lender may offer a low introductory rate for the first six months | You may have to pay annual membership and maintenance fees |
| Your interest rate has a cap and can only go so high, regardless of what happens in the broader market | You may have to pay the loan back in full if you sell your house |
| You can deduct interest paid on your HELOC if it's used for home improvements | You could lose your home if you can’t repay the balance owed |
A HELOC can help you accomplish a variety of financial goals. It may make sense to take out a HELOC if:
Ready to get a HELOC? Compare Lender Offers Today
Home equity loan rates are often slightly higher than HELOC rates, but they do have one big advantage: they’re fixed rather than variable. This is a big selling point for those who prefer a simpler loan with stable monthly payments. If you just need a lump sum of money, you may want to consider a home equity loan instead of a line of credit.
On the other hand, if you’ll need funds for unpredictable expenses — perhaps startup costs related to a business venture or a fixer-upper home project — a HELOC offers more flexibility and could save you money if it comes with a teaser rate.
Cash-out refinance rates are usually lower than HELOC rates. In fact, they’re likely to be the lowest of all of your equity-tapping loan options. Since it replaces your existing mortgage with a new loan, it’s a “first” mortgage. Lenders can usually offer lower rates for these loans, as they’ll be first in line to get repaid if you can’t make your payments and they foreclose on your home.
A HELOC is a “second mortgage,” and lenders charge a higher rate to cover the risk that they might not be repaid in a foreclosure.
If you need help deciding if a HELOC, home equity loan or cash-out refinance is the best match for your financial plans, check out LendingTree’s full comparison of all your equity-tapping loan options.
That will depend largely on your finances and how you plan to use the HELOC. Relatively high home values mean that you may have access to more cash than you will in the future. The squeeze of inflation is also very real right now, and a HELOC could help ease some of that strain. However, there’s never a good time to take out a HELOC whose payments you can’t afford. The negative consequences of late payments or default can be severe, both for your credit score and your ability to stay in your home.
You’ll typically pay HELOC closing costs equal to 2% to 5% of your credit line amount, though the fees will ultimately vary from lender to lender. Some banks even offer no-closing-cost options. However, you’ll likely have to link the payments and withdrawals to your checking account to take advantage of options like these. Watch out for other conditions on the no-cost options, too — they may come with extra rules about how long you have to keep the HELOC open.
Yes, but you’ll likely pay a higher interest rate — that means your payment on the amount you draw will be higher than a comparable, variable-rate HELOC. You won’t have to worry about rising rates in the future, though, which is especially important if you’re living on a fixed income.
There may be a slight drop in your score when you apply for a HELOC. However, if you apply with multiple lenders within a 45-day window, the credit checks usually count as one inquiry, according to the Consumer Financial Protection Bureau (CFPB).
You’ll likely need a home appraisal for a HELOC, but the requirements vary by lender. In cases where you aren’t required to get a full appraisal, you might want to use a broker price opinion instead.
Interest on a HELOC may be deductible if your home equity funds are used for home improvement projects.
A teaser rate is a low interest rate offered on a loan product for set time period at the beginning of a loan’s repayment schedule. It may be called an initial rate, introductory rate or discount rate, according to the Consumer Financial Protection Bureau. Many HELOC lenders offer teaser rates to their customers. Check the fine print for extra requirements like higher down payment or credit scores needed to qualify. Make sure you can afford the payment once the teaser rate period ends. And don’t forget: You can refinance a teaser rate loan to a fixed-rate loan in the future, if you qualify.
To determine the best HELOC lenders, we reviewed data collected from 35 lender reviews completed by the LendingTree editorial staff for 2023.
Each lender review gives a rating between zero and five stars, based on several HELOC features including home equity product features and variety, digital application processes and the availability of product and lending information online. To be eligible for a “best of” HELOC title, lenders must have a lender review rating of at least four stars.
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 HELOC-specific characteristics, to find the lenders with a product mix, information base and guidelines that best serve the needs of HELOC borrowers.