Best HELOC Lenders of November 2021
A HELOC lets you tap your home's equity. Compare our selections for best HELOC lenders.
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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 equity as needed.
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.
A home equity line of credit, or HELOC, is a second mortgage that lets you borrow against the value of your home. You tap equity as needed.
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 November 2021
| Lender | NerdWallet Rating | Min. Credit Score | National / Regional | Learn More |
|---|---|---|---|---|
 Rocket Mortgage by Quicken Loans: NMLS#3030 Learn more at Rocket Mortgage by Quicken Loans | Best for cash-out refinance | 620 | National | Learn more at Rocket Mortgage by Quicken Loans |
 Guaranteed Rate: NMLS#2611 Learn more at Guaranteed Rate | Best for cash-out refinance | 620 | National | Learn more at Guaranteed Rate |
 Bank of America: NMLS#399802 | Best for home equity lines of credit | 660 | National | Read review |
 US Bank: NMLS#402761 | Best for home equity lines of credit | 620 | National | Read review |
 PenFed: NMLS#401822 | Best for home equity lines of credit | N/A | National | Read review |
 PNC: NMLS#446303 | Best for home equity lines of credit | 620 | National | Read review |
 Connexus: NMLS#649316 | Best for HELOCs overall | 640 | National | Read review |
 Flagstar: NMLS#417490 | Best for home equity lines of credit | 620 | National | Read review |
 SunTrust (Truist): NMLS#2915 | Best for home equity lines of credit | 620 | National | Read 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.
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
Our picks for
home equity lines of credit
Bank of America: NMLS#399802
National / Regional
Max LTV
N/AMin. Credit Score
US Bank: NMLS#402761
National / Regional
Max LTV
Min. Credit Score
PenFed: NMLS#401822
National / Regional
Max LTV
Min. Credit Score
PNC: NMLS#446303
National / Regional
Max LTV
Min. Credit Score
Our pick for
HELOCs overall
Connexus: NMLS#649316
National / Regional
Max LTV
N/AMin. Credit Score
Our picks for
home equity lines of credit
Flagstar: NMLS#417490
National / Regional
Max LTV
Min. Credit Score
SunTrust (Truist): NMLS#2915
National / Regional
Max LTV
Min. Credit Score
Current average HELOC rate
Average | High | Low |
|---|---|---|
4.418%. | 5.240%. | 4.110%. |
» MORE: Current HELOC rates
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 only interest on the balance. After the draw period ends, you may no longer take money out, and you pay the principal plus interest.
By contrast, a home equity loan provides a lump sum that you repay in installments of equal payments over a set period.
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 has 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.
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.
More from NerdWallet
Last updated on August 31, 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 November 2021
- Rocket Mortgage by Quicken Loans: Best for cash-out refinance
- Guaranteed Rate: Best for cash-out refinance
- Bank of America: Best for home equity lines of credit
- US Bank: Best for home equity lines of credit
- PenFed: Best for home equity lines of credit
- PNC: Best for home equity lines of credit
- Connexus: Best for HELOCs overall
- Flagstar: Best for home equity lines of credit
- SunTrust (Truist): Best for home equity lines of credit
Frequently asked questions
Yes, banks are still offering HELOCs. At the beginning of the COVID-19 pandemic, some lenders suspended underwriting new HELOCs. Now, some have resumed HELOC lending and some haven't.
Lender requirements vary, but typically you'll need a credit score of 620 or higher. Taking out a HELOC will probably reduce your credit score temporarily when it appears on your credit report.
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.
