BEST OF

Best HELOC Lenders of 2022

A HELOC lets you tap your home's equity. Compare our selections for best HELOC lenders.

Oct 3, 2022

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A home equity line of credit, or HELOC, is a second mortgage that lets you borrow against the value of your home. You tap some of your equity as needed and pay back only what you borrow. Borrowers often use HELOCs to finance home improvement projects, educational expenses or debt consolidation.

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.

Best HELOC Lenders

PenFed: NMLS#401822

4.0

NerdWallet rating 
PenFed

National / regional

National

Max LTV

80%

Min. credit score

N/A

Min. credit score

N/A

Why we like it

PenFed is a strong choice for borrowers who want to take advantage of a fixed-rate option from a credit union.

Pros

  • Offers a fixed-rate option.

  • Borrow up to 80% CLTV.

Cons

  • Annual fee of $99.

Read Full Review

Flagstar: NMLS#417490

5.0

NerdWallet rating 
Flagstar

National / regional

National

Max LTV

80%

Min. credit score

680

Min. credit score

680

Why we like it

Flagstar can be a solid option for HELOC borrowers with at least 20% equity in their home.

Pros

  • Borrowing limit up to 80% CLTV.

  • Annual fees of $75.

Cons

  • No fixed-rate option.

Read Full Review

Bank of America: NMLS#399802

4.5

NerdWallet rating 
Bank of America

National / regional

National

Max LTV

85%

Min. credit score

660

Min. credit score

660

Why we like it

Bank of America's lack of annual fees and fixed-rate option makes it an ideal choice for borrowers who prioritize definitive long-term financial planning.

Pros

  • Offers a fixed-rate option.

  • Borrowing limit up to 85% CLTV.

  • No annual fees.

Cons

  • Best rates assume an initial withdrawal at opening.

Read Full Review

San Diego County Credit Union: NMLS#580585

5.0

NerdWallet rating 
San Diego County Credit Union

National / regional

Regional

Max LTV

70%

Min. credit score

620

Min. credit score

620

Why we like it

San Diego County Credit Union is a good choice for California borrowers who want to avoid annual fees.

Pros

  • No annual fees.

Cons

  • Borrowing limit is 70% CLTV.

  • No fixed-rate option.

Read Full Review

US Bank: NMLS#402761

4.5

NerdWallet rating 
US Bank

National / regional

National

Max LTV

80%

Min. credit score

620

Min. credit score

620

Why we like it

US Bank can be a good fit for borrowers interested in taking advantage of a fixed-rate option.

Pros

  • Offers a fixed-rate option.

Cons

  • Loans with a CLTV over 70% may not qualify for the best rates.

  • Annual fees are up to $90.

Read Full Review

State Employees Credit Union: NMLS#430055

4.5

NerdWallet rating 
State Employees Credit Union

National / regional

Regional

Max LTV

90%

Min. credit score

640

Min. credit score

640

Why we like it

State Employees Credit Union may be a strong match for qualified North Carolina borrowers looking to tap a lot of their equity.

Pros

  • Long draw period of 15 years.

  • Borrowing limit of 90% CLTV.

Cons

  • Credit union membership is limited by restrictive requirements.

Read Full Review

Alliant: NMLS#197185

4.0

NerdWallet rating 
Alliant

National / regional

National

Max LTV

90%

Min. credit score

N/A

Min. credit score

N/A

Why we like it

Alliant's high borrowing limit makes it an ideal choice for borrowers who need to access a large amount of funds or who haven't built up a lot of equity yet.

Pros

  • Borrowing limit up to 90% CLTV.

Cons

  • Annual fee of $50.

  • No fixed-rate option.

Read Full Review

Current average HELOC rate

Average

High

Low

4.870%.

5.650%.

4.040%.

How a HELOC works

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 interest only on the balance. After the draw period ends, you may no longer take money out, and you pay the principal plus interest.

To obtain the best HELOC rates, make sure you comparison shop, preferably among at least three lenders. By shopping around, you're likely to find the combination of features and interest rate that make the best home equity line of credit for your needs.

Pros and cons of HELOCs

A HELOC can have a variable interest rate, which means it can go up or down over time. When the interest rate rises, the minimum monthly payment may increase, too. Less commonly, some lenders offer a fixed-rate HELOC option, meaning that you can lock in some or all of the loan balance at a specific APR.

A HELOC's main advantage is that it offers flexibility. During the draw period, the minimum monthly payment covers just the interest on the balance, so you don't have to pay principal if you don't want to.

There are two major disadvantages to a HELOC: The interest rate can rise, and you can get in over your head if you're not careful. You may end up borrowing so much that you can't comfortably afford the principal and interest during the repayment period.

HELOCs typically have lower interest rates than credit cards. But defaulting on a HELOC could put your home at risk of foreclosure.

Alternatives to HELOCs

A HELOC is not your only option for tapping your home's equity. If you know exactly how much you need to borrow, you may consider a home equity loan, which you receive as a lump sum and pay back at a fixed rate.

If you need to borrow more money than you'd qualify for with a HELOC or home equity loan, a cash-out refinance may be the right choice for you. This replaces your original mortgage with a larger one, and you receive the difference between the value of the loan and the amount you currently owe in cash.

Finally, if you cannot qualify for a HELOC, a shared appreciation agreement may be worth exploring. This transaction allows you to sell off a stake in your future equity earnings to a company in exchange for an advance on some of your current equity. This type of agreement is typically for homeowners with a lot of equity but little cash reserves, and most consumers are better served by a HELOC if they can get one.

More from NerdWallet

Last updated on October 3, 2022

Methodology

The star ratings on this page reflect each lender's overall star ratings. Read more about how we determine those ratings.

The lenders on this page are chosen using this methodology:

NerdWallet reviewed nearly 60 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (lenders had to have at least a 1% market share), lenders with significant online search volume and those that specialize in serving various audiences across the country.

For inclusion on this roundup, lenders must offer a HELOC and publish information on NerdWallet’s evaluated HELOC factors online. Evaluated factors are: whether or not a lender offers a fixed-rate option, maximum and intro APRs, CLTV borrowing limits and annual fees.

NerdWallet solicits information from reviewed lenders on a recurring basis throughout the year. All lender-provided information is verified through lender websites and interviews. We also utilized 2020 HMDA data for origination volume, origination fee, rate spread and share-of-product data.

To recap our selections...

NerdWallet's Best HELOC Lenders of 2022

Frequently asked questions