BEST OF

Best HELOC Lenders of December 2020

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.

NerdWalletMay 6, 2020
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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 December 2020

Our picks for

home equity lines of credit

US Bank: NMLS#402761

5.0

NerdWallet rating 
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National / Regional

National

Max LTV

80%


Why we like it

Good for: borrowers looking for low closing cost options. The annual fee is waived for HELOC borrowers with an eligible checking account.

Pros

  • Equity borrowing available from $15,000 to $750,000 (up to $1 million for properties in California), depending on credit history, property's equity and monthly debts.

  • With a variable-rate HELOC, up to three fixed-rate options can be locked.

  • Originates loans in all 50 states with loan officers physically present in 28 states.

Cons

  • No personalized mortgage rates available online.

  • Published mortgage rates assume an above-average credit score.

Read Full Review

PenFed: NMLS#401822

4.5

NerdWallet rating 
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National / Regional

National

Max LTV

90%


Why we like it

Good for borrowers looking for a HELOC with flexible features and the low rates of a member-owned credit union.

Pros

  • PenFed pays most closing costs.

  • Available for owner and non-owner occupied homes.

  • Borrowers can switch from a variable to fixed interest rate on all or some of the credit line.

Cons

  • Has a $99 annual fee, but that fee may be waved in certain circumstances.

Read Full Review

Bank of America: NMLS#399802

5.0

NerdWallet rating 
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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for: first-time home buyers looking for low-down-payment options and existing customers who may get a discount on fees.

Pros

  • Allows borrowers to apply entirely online.

  • Offers down payment and closing cost assistance programs.

  • May give existing customers a discount on mortgage lender origination fees.

Cons

  • Does not offer renovation loans.

Read Full Review

PNC: NMLS#446303

4.5

NerdWallet rating 
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National / Regional

National

Max LTV

84.9%


Why we like it

Good for equity borrowers looking for flexibility on loan terms. PNC HELOCs have locked fixed-rate terms of 5 to 30 years.

Pros

  • Home equity loan amounts start at $1,000.

  • HELOCs allow two fixed-rate lock options at one time.

  • Maximum LTV is 84.9% but may be lower for borrowers in certain geographical areas.

Cons

  • Automatic deductions from a PNC account required to enjoy advertised rates on some equity products.

  • Offers mortgage loans nationwide, but has branches for in-person service in only about two dozen states.

Read Full Review

Connexus: NMLS#649316

4.0

NerdWallet rating 
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National / Regional

National

Max LTV

90% (HEL)


Why we like it

Ideal for Connexus members who want multiple home equity loan and HELOC options.

Pros

  • Well-qualified homeowners can borrow up to 90% of their home's equity.

  • Home equity loan terms from 60 to 240 months.

Cons

  • Borrower pays closing costs that range from $175 to $2,000.

  • Home equity products are not available to residents of Maryland, Texas, Hawaii and Alaska.

Read Full Review

SunTrust: NMLS#2915

5.0

NerdWallet rating 
Logo

National / Regional

National

Max LTV

89.9%


Why we like it

Ideal for homeowners who want flexibility. SunTrust offers a variable-rate HELOC where borrowers can convert all or part of the HELOC balance into a fixed-rate option.

Pros

  • Offers a wide variety of loan options, including special programs for doctors, entrepreneurs and other professionals.

  • Offers a complete suite of online mortgage application tools and loan tracking.

  • Sample rates and fees are easy to find on the website.

Cons

  • Customized rates aren't available online without starting an application.

  • Branches are limited mostly to the Southeast.

Read Full Review

Flagstar: NMLS#417490

5.0

NerdWallet rating 
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National / Regional

National

Max LTV

89%


Why we like it

Ideal for current Flagstar customers. Flagstar offers rate discounts for existing customers with high credit scores who withdraw at least $25,000 at closing.

Pros

  • Multiple draw methods.

  • Line amounts from $10,000 to $1,000,000.

  • No prepayment penalty on home equity loans.

Cons

  • Below average customer satisfaction, according to J.D. Power.

  • Branch locations in only about half of U.S. states.

Read Full Review

Our pick for

HELOCs overall

Citibank: NMLS#412915

5.0

NerdWallet rating 
Logo

National / Regional

National

Max LTV

70-80%


Why we like it

Good for: Borrowers who prefer an online experience.

Pros

  • Discounts may be available for Citibank customers or those who elect to pay closing costs.

  • Lower introductory rates may be available.

  • Offers both home equity loans and home equity lines of credit.

Cons

  • Early closure fee if you close HELOC account within 36 months of opening it.

  • Must be a premium account holder to avoid annual fee.

  • Not available in Alaska.

Read Full Review

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.

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at Rocket Mortgage

Rocket Mortgage by Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
Logo

Min. Credit Score

620

National / Regional

National

at Rocket Mortgage


Why we like it

Good for: refinance borrowers who want a fully digital home loan experience powered by Quicken Loans.

Pros

  • Offers conventional and government-backed refinance mortgages.

  • Customized loan recommendations based on refinance goals.

  • Offers document and asset retrieval capabilities.

Cons

  • If you’re a “look me in the eye” type of customer, you’re out of luck.

  • Getting a customized interest rate requires a credit check, which can lower your credit score by a few points.

Read Full Review
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at Guaranteed Rate

Guaranteed Rate: NMLS#2611

5.0

NerdWallet rating 
Logo

Min. Credit Score

620

National / Regional

National

at Guaranteed Rate


Why we like it

Good for: homeowners who are looking to refinance conventional, FHA or VA mortgages.

Pros

  • Offers the ability to securely upload and digitally sign loan documents.

  • Displays detailed sample rates for many of its refinance loan products.

Cons

  • Charges some fees, such as a lender fee which includes an application fee.

Read Full Review

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.

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 May 6, 2020

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 December 2020