BEST OF
Best HELOC Lenders of January 2021
A HELOC lets you tap your home's equity. We've selected some of the best HELOC lenders to help you find the right one.
NOTE: Due to the coronavirus outbreak, obtaining a mortgage may be a bit of a challenge. Lenders are dealing with demand and staffing issues. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.
A home equity line of credit, or HELOC, is a second mortgage that lets you borrow against the value of your home. You tap the equity only as you need it.
Having a HELOC can be a budget saver, especially when you use your home's equity for the right reasons, because the interest rate on a HELOC tends to be lower than rates on credit cards and personal loans. Lenders use your loan-to-value ratio, or LTV, 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. We have also included some top lender picks for cash-out refinance mortgages, which are another way to access your home equity.
NOTE: Due to the coronavirus outbreak, obtaining a mortgage may be a bit of a challenge. Lenders are dealing with demand and staffing issues. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.
A home equity line of credit, or HELOC, is a second mortgage that lets you borrow against the value of your home. You tap the equity only as you need it.
Having a HELOC can be a budget saver, especially when you use your home's equity for the right reasons, because the interest rate on a HELOC tends to be lower than rates on credit cards and personal loans. Lenders use your loan-to-value ratio, or LTV, 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. We have also included some top lender picks for cash-out refinance mortgages, which are another way to access your home equity.
Summary of Best HELOC Lenders of January 2021
Lender | NerdWallet Rating | National / Regional | Max LTV | Learn More |
---|---|---|---|---|
Best for home equity lines of credit | National | 80% | Read review | |
Best for home equity lines of credit | National | 90% | Read review | |
Best for home equity lines of credit | National | N/A | Read review | |
Best for home equity lines of credit | National | 84.9% | Read review | |
Best for HELOCs overall | National | N/A | Read review | |
Best for home equity lines of credit | National | 89.9% | Read review | |
Best for home equity lines of credit | National | 89% | Read review | |
Best for home equity lines of credit | National | N/A | Read review | |
Best for cash-out refinance | National | N/A | at Rocket Mortgage by Quicken Loans | |
Best for cash-out refinance | National | N/A | at Guaranteed Rate |
Our picks for
home equity lines of credit
US Bank: NMLS#402761

National / Regional
Max LTV
Bank of America: NMLS#399802

National / Regional
Max LTV
Our pick for
HELOCs overall
Connexus: NMLS#649316

National / Regional
Max LTV
Our picks for
home equity lines of credit
SunTrust (Truist): NMLS#2915

National / Regional
Max LTV
Flagstar: NMLS#417490

National / Regional
Max LTV
Citibank: NMLS#412915

National / Regional
Max LTV
Our picks for
cash-out refinance
A cash-out refi can be a solid alternative to home equity lines of credit, and you’ll often find it offered with a lower, fixed interest rate. Below are two options for cash-out refinance lenders.
at Rocket Mortgage by Quicken Loans
Rocket Mortgage by Quicken Loans: NMLS#3030
Min. Credit Score
National / Regional
at Rocket Mortgage by Quicken Loans
at Guaranteed Rate
Guaranteed Rate: NMLS#2611

Min. Credit Score
National / Regional
at Guaranteed Rate
HELOC FAQ
How does a HELOC work?
A HELOC works like a credit card: You’re able to borrow up to a certain limit, repay some or all of what you took out, then do it again as needed. The lender uses your home’s value to set the HELOC limit. You may borrow during a draw period that lasts for several years and pay only interest on the balance. After the draw period ends, you may no longer take money out, and you pay principal plus interest.
What credit score do you need for a HELOC?
Lender requirements vary, but typically you'll need a credit score of 620 or higher.
Is getting a HELOC a good idea?
Getting a HELOC might make financial sense if you can pay it off within a few years and will use the money for a major repair or remodeling project that increases your home's value. HELOCs typically have lower interest rates than a credit card. But defaulting on a HELOC could put your home at risk of foreclosure, so think twice before using one to pay for vacations, vehicles or other expenditures that don't build wealth.
What are the disadvantages of a HELOC?
The main disadvantage of a HELOC is that your home could be subject to foreclosure if you don't repay the loan. Also, the interest rate on a HELOC is tied to the prime rate, meaning it can go up or down. When interest rates rise, your minimum monthly payments may go up, too.
» MORE: HELOC calculator
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 the home, according to the IRS.
Will a HELOC hurt my credit score?
Taking out a HELOC will probably reduce your credit score temporarily once it appears on your credit report. Some credit bureaus treat HELOCs as installment loans rather than revolving lines of credit, so maxing out a HELOC might not have the same negative effect on your credit score that borrowing up to the limit on a credit card would.
Is it better to get a home equity loan or HELOC?
The answer depends on how you plan to use the money. A HELOC lets you borrow whatever amount you need, as you need it, and you only pay interest on the outstanding balance. A home equity loan provides a lump sum that you repay in installments.
More from NerdWallet
Last updated on January 22, 2021
Methodology
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.
To recap our selections...
NerdWallet's Best HELOC Lenders of January 2021
- US Bank: Best for home equity lines of credit
- PenFed: Best for home equity lines of credit
- Bank of America: Best for home equity lines of credit
- PNC: Best for home equity lines of credit
- Connexus: Best for HELOCs overall
- SunTrust (Truist): Best for home equity lines of credit
- Flagstar: Best for home equity lines of credit
- Citibank: Best for home equity lines of credit
- Rocket Mortgage by Quicken Loans: Best for cash-out refinance
- Guaranteed Rate: Best for cash-out refinance