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.

NerdWalletJanuary 22, 2021
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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 January 2021

Our picks for

home equity lines of credit

US Bank
Read review

US Bank: NMLS#402761

5.0

NerdWallet rating 
US Bank

National / Regional

National

Max LTV

80%

Read review

Why we like it

U.S. Bank gets high marks for its loan offerings and online customer conveniences — and has competitive fees and mortgage rates.

Pros

  • Offers a full line of conventional and government loan products.

  • Provides home equity loans and lines of credit.

  • Allows borrowers to apply and track their loan's progress online.

Cons

  • No personalized mortgage rates available online.

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

Read Full Review
PenFed
Read review

PenFed: NMLS#401822

4.5

NerdWallet rating 
PenFed

National / Regional

National

Max LTV

90%

Read review

Why we like it

PenFed Credit Union has a digital mortgage application and offers a wide selection of mortgages, including low-down-payment home loans. But it doesn't offer FHA mortgages.

Pros

  • Offers a broad selection of home loan products, including low-down-payment options for first-time home buyers and home buyers of limited means.

  • Offers a lender credit, based on loan amount, for purchase mortgages.

  • Offers relatively low mortgage rates in comparison to other lenders.

Cons

  • Lender credit isn't available for refinance mortgages.

  • Doesn't offer FHA loans.

Read Full Review
Bank of America
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Bank of America: NMLS#399802

5.0

NerdWallet rating 
Bank of America

National / Regional

National

Max LTV

N/A

Read review

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
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PNC: NMLS#446303

4.5

NerdWallet rating 
PNC

National / Regional

National

Max LTV

84.9%

Read review

Why we like it

Good for: borrowers with low-to-moderate incomes or limited down payments. PNC offers several low-down-payment loans, including one with no mortgage insurance.

Pros

  • Posts current mortgage rates on its website.

  • Has an online application for mortgage preapproval and a digital tool to track application progress.

  • Offers several affordable loan options including FHA, VA, USDA and the PNC Community Loan.

Cons

  • Can't complete a full mortgage application online.

  • Doesn't offer renovation mortgages.

  • In-person service is not available in every state.

Read Full Review

Our pick for

HELOCs overall

Connexus
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Connexus: NMLS#649316

4.0

NerdWallet rating 
Connexus

National / Regional

National

Max LTV

N/A

Read review

Why we like it

Connexus boasts low-down-payment conventional loans and makes mortgage rate information readily accessible online, but doesn't offer government-backed mortgages.

Pros

  • Offers both traditional and interest-only HELOCs.

  • Displays sample rates for its entire array of loan products, and you don't need to provide personal information to get a custom rate quote.

Cons

  • Lacks document upload and online loan tracking capabilities.

Read Full Review

Our picks for

home equity lines of credit

SunTrust (Truist)
Read review

SunTrust (Truist): NMLS#2915

5.0

NerdWallet rating 
SunTrust (Truist)

National / Regional

National

Max LTV

89.9%

Read review

Why we like it

Good for: first-time home buyers, doctors and other borrowers interested in low-down-payment mortgage options.

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
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Flagstar: NMLS#417490

5.0

NerdWallet rating 
Flagstar

National / Regional

National

Max LTV

89%

Read review

Why we like it

Good for borrowers who want a wide range of choices — not only among mortgage products, but also in the channel they prefer, whether a branch, online or on the phone.

Pros

  • Offers a wide range of loan types and products, including FHA, VA and USDA.

  • Has a full suite of online conveniences.

  • Does well with rate transparency, and monthly payment estimates add mortgage insurance, when applicable.

Cons

  • Home equity lending is geographically limited.

Read Full Review
Citibank
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Citibank: NMLS#412915

5.0

NerdWallet rating 
Citibank

National / Regional

National

Max LTV

N/A

Read review

Why we like it

Good for: Borrowers wanting to compare mortgage rates online for a variety of loan options.

Pros

  • Offers a wide variety of loan options, including low-down-payment mortgages and jumbo mortgages.

  • Provides customizable mortgage rates on its website.

  • Offers low rates and fees compared with other lenders.

Cons

  • Charges a mortgage application fee.

  • Requires help from a mortgage loan officer to complete the loan application online.

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.

Rocket Mortgage by Quicken Loans

at Rocket Mortgage by Quicken Loans

Rocket Mortgage by Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
Rocket Mortgage by Quicken Loans

Min. Credit Score

620

National / Regional

National

at Rocket Mortgage by Quicken Loans

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
Guaranteed Rate

at Guaranteed Rate

Guaranteed Rate: NMLS#2611

5.0

NerdWallet rating 
Guaranteed Rate

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

  • May charge 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.

» MORE: Understanding home equity lines of credit

What credit score do you need for a HELOC?

Lender requirements vary, but typically you'll need a credit score of 620 or higher.

» MORE: Requirements for a home equity loan or HELOC

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.

» MORE: 5 good reason to tap your home equity

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.

» MORE: Are home equity loans tax-deductible?

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: Home equity loan versus line of credit: Pros and Cons

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