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Best HELOC Lenders of July 2020

NerdWalletMay 6, 2020

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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.

Summary of Best HELOC Lenders of July 2020

LenderNerdWallet Rating National / RegionalMax LTVLearn More

US Bank: NMLS#402761

Best for home equity lines of credit

National

80%

Read review

PenFed: NMLS#401822

Best for home equity lines of credit

National

90%

Read review

Bank of America: NMLS#399802

Best for home equity lines of credit

National

N/A

Read review

PNC: NMLS#446303

Best for home equity lines of credit

National

84.9%

Read review

Connexus: NMLS#649316

Best for home equity lines of credit

National

90% (HEL)

Read review

SunTrust: NMLS#2915

Best for home equity lines of credit

National

89.9%

Read review

Flagstar: NMLS#417490

Best for home equity lines of credit

National

89%

Read review

Citibank: NMLS#412915

Best for HELOCs overall

National

70-80%

Read review

Rocket Mortgage: NMLS#3030

at Rocket Mortgage

Best for cash-out refinance

National

N/A

at Rocket Mortgage

Guaranteed Rate: NMLS#2611

Best for cash-out refinance

National

N/A

Read review

Our picks for

home equity lines of credit

US Bank: NMLS#402761

Logo

National / Regional

National

Max LTV

80%


Why we like it

Ideal for borrowers who want low fees. No closing costs and 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.

  • Mortgage options include a "piggyback" or 80/10/10 loan.

  • Alternative credit sources can be used in some cases.

  • No closing costs with a cash-out refinance.

Cons

  • Limited opportunities for face-to-face banking with offices in only 28 of 50 states.

  • Average score in J.D. Power 2017 consumer satisfaction survey (US Bank has 3 stars out of 5).

  • Online capabilities are currently limited.

Read Full Review

PenFed: NMLS#401822

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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

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for borrowers who prefer a traditional bank. Bank of America offers a wide array of mortgages and online account management tools. It also has first-time home buyer loans with low down payments and no mandatory mortgage insurance.

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

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National / Regional

National

Max LTV

84.9%


Why we like it

Ideal 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

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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

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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

  • Discount introductory interest rate for initial advances of $25,000 or more.

  • Up to five loans of at least $5,000 each can be converted to a fixed-rate, fixed-term option.

  • Multiple ways to access funds: checks, online, mobile or at a branch.

  • Annual fee waived for Signature Advantage or Premier Banking clients.

Cons

  • Borrower pays closing costs of $100 to $2,000 if account is closed within three years.

  • $65 annual fee.

  • No interest-only payment option during draw and repayment periods.

Read Full Review

Flagstar: NMLS#417490

Logo

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

Logo

National / Regional

National

Max LTV

70-80%


Why we like it

Ideal for those who prefer an online experience. Rate discounts available if you sign up for Citibank Auto Deduct and link your HELOC to a premier Citi banking account.

Pros

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

  • Lower introductory rates may be available.

  • Multiple ways to access HELOC funds.

  • No application or closing cost fees.

Cons

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

  • Must be a premium account holder for best rates.

  • HELOCs require an initial draw of at least $25,000

  • 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: NMLS#3030

Logo

Min. Credit Score

620

National / Regional

National

at Rocket Mortgage


Why we like it

Ideal for refi borrowers with little time. Rocket Mortgage brings smartphone app convenience to the refinance process. And online income and asset verification speeds the process.

Pros

  • Offers conventional and government-backed refinance mortgages.

  • Customized loan recommendations based on refinance goals.

  • Automatically fills in your application with public information.

  • Helpful mortgage bankers are just a click away.

Cons

  • Doesn’t consider alternative-credit info for refinances.

  • No in-person customer service available.

  • Must create an account to see personalized refinance rates.

Read Full Review

Guaranteed Rate: NMLS#2611

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Min. Credit Score

620

National / Regional

National


Why we like it

Ideal for homeowners who are looking to refinance into conventional, FHA or VA mortgages. Guaranteed Rate works with almost anyone with a good credit score and stable income.

Pros

  • Apply and be approved for a refinance entirely online.

  • Suggests refinance loan products based on your financial goals.

  • No personal information required for customized refinance rate quotes.

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 selection of mortgage lenders for inclusion here was made based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. 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 July 2020