Best of

6 Best Home Equity Lenders of 2020

NerdWalletSeptember 3, 2020

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

These mortgage lenders are among the standouts in 2020 for home equity loans, lines of credit and cash-out refinancing.

If you have equity in your home — its market value is higher than what you owe on your mortgage — you can tap it for home improvements or other financial needs. You build equity over time by paying down your home loan, and rising home prices can also make your house worth more.

Home-equity borrowing has an advantage: You get a lower interest rate than with a personal loan because your borrowing is backed by your home. Use your home’s equity with care — many financial pros suggest using home equity only for things that increase your home’s value.

NerdWallet reviews and rates mortgage lenders to find the best for home equity, home equity lines of credit (HELOCs) and cash-out refinancing.

Summary of Best Home Equity Lenders of 2020

PenFed: NMLS#401822

Logo

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

PNC: NMLS#446303

Logo

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

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

Citibank: NMLS#412915

Logo

National / Regional

National

Min. Down Payment

3%


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
Logo

at Rocket Mortgage

Rocket Mortgage by Quicken Loans: NMLS#3030

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

Bank of America: NMLS#399802

Logo

Min. Credit Score

620

National / Regional

National


Why we like it

Ideal for borrowers who like options. Bank of America offers multiple refinance loans, including FHA, VA and cash-out.

Pros

  • Offers refinance mortgages with fixed and adjustable rates.

  • Allows borrowers to apply entirely online.

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

Cons

  • Does not offer renovation loans.

Read Full Review

Last updated on September 3, 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 Home Equity Lenders of 2020