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Jeff Ostrowski Jeff Ostrowski Andrew Dehan Andrew Dehan
Written by
Suzanne De Vita Suzanne De Vita
Edited by
Mark Hamrick Mark Hamrick
Reviewed by
Suzanne De Vita Suzanne De VitaEdited by
Mark Hamrick Mark HamrickReviewed by
Updated March 20, 2024
On this page
- Today's average interest rates
- Choosing the best home equity loan
- Home equity loan rates
- What is a home equity loan?
- Pros and cons of home equity loans
- HELOC vs. Home equity loan
- Alternatives to home equity loans
- FAQs about home equity loans
How to apply for a home equity loan
- Check your credit
The higher your credit score, the better your rate. - Calculate your home equity
How much you can borrow will be determined by the difference between your home’s value and how much you owe on your mortgage. - Consider how much other debt you already have
A little consumer debt is fine, but if you have car loans and credit card balances, getting approved might be tricky. - Complete the lender's application
Many lenders let you start the application process online by entering your personal and financial information. - Be aware of potential fees
You may also need to pay fees for a loan application, credit check and home appraisal.
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Bankrate has helped people make smarter financial decisions for 40+ years. Our mortgage rate tables allow users to easily compare offers from trusted lenders and get personalized quotes in under 2 minutes. While our priority is editorial integrity, these pages may contain references to products from our partners. Here is how we make money.
On This Page
On This Page
- Today's average interest rates
- Choosing the best home equity loan
- Home equity loan rates
- What is a home equity loan?
- Pros and cons of home equity loans
- HELOC vs. Home equity loan
- Alternatives to home equity loans
- FAQs about home equity loans
What are today's average interest rates for home equity loans?
| LOAN TYPE | AVERAGE RATE | AVERAGE RATE RANGE |
|---|---|---|
| Home equity loan | 8.66% | 8.41% – 9.49% |
| 10-year fixed home equity loan | 8.80% | 7.86% – 9.52% |
| 15-year fixed home equity loan | 8.77% | 7.91 – 10.23% |
To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. The rates shown above are calculated using a loan or line amount of $30,000, with a FICO score of 700 and a combined loan-to-value ratio of 80 percent.
Note: The above APRs are current as of March 13, 2024. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.
National home equity loan interest rate trends
Home equity loan rates holding onto last week’s drop
Home equity loan rates held on to the drops from last week, with the 10-year $30,000 loan average hovering at 8.8 percent, the same as the previous week, according to Bankrate’s survey of large lenders. The 15-year equivalent dipped slightly to 8.77 percent, down from 8.78 the previous week.
Home equity loans could become moderately cheaper in 2024, but the better bet might be a home equity line of credit (HELOC).
“Rates for home equity loans, the less popular fixed-rate installment loan alternative to a HELOC, will see modest declines in 2024, tilted toward the back half of the year,” says Greg McBride, CFA, Bankrate chief financial analyst.
Unlike HELOCs, home equity loan rates are fixed. Once you close your loan, your rate will stay the same whether market rates rise or fall (unless you refinance). Still, rates on new loans shift with economic conditions, including Federal Reserve policy. The Fed meets again in mid-March.
How to choose the best home equity loan
Many lenders have fixed loan-to-value (LTV) ratio requirements for their home equity loans, meaning you'll need to have a certain amount of equity in your home to qualify. Lenders will also factor in your credit score and income when determining your rate and eligibility. Minimum requirements generally include a credit score of 620 or higher, a maximum loan-to-value ratio of 80 percent or 85 percent and a documented source of income.
When shopping for a home equity loan, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date, but definitely check the lenders’ websites to see if there is more recent information.
How to choose the best home equity loan for you:
- Compare your credit score to lender requirements. Some lenders accept applications from borrowers with credit scores in the 600s, others don’t.
- Weigh each lender’s combination of interest rates and fees. Both can range widely from one lender to another. The annual percentage rate (APR) on a loan reflects the combined impact of rates and fees.
- Figure out how much home equity you have. Some lenders let you tap up to 90 percent of your home’s value. Others cap that amount at 80 percent.
- Determine your debt-to-income ratio: all your current monthly obligations divided by your monthly gross income. Lenders look at this ratio to measure your ability to repay the loan, and some allow a larger ratio than others.
- Determine how much you need to borrow. Some lenders offer home equity loans as big as $500,000, others have a max of $100,000.
Also check out:Bankrate's picks for Best Home Equity Loan Lenders
Best home equity loan rates in March 2024
The best home equity loan lenders offer a variety of repayment terms, low interest rates and few fees. Each lender will evaluate your eligibility differently, so shopping around can help you find the best offer. Your rate will depend on your credit score, income, home equity and more, with the lowest rates going to the most creditworthy borrowers.
| LOAN TYPE | LOAN AMOUNT | LOAN TERM | STARTING APR |
|---|---|---|---|
Regions Bank | $10,000–$250,000 | 10 to 20 years | 6.75% |
Police and Fire Federal Credit Union | Up to $600,000 | 5 to 20 years | 7.75% |
Third Federal Savings and Loan | $10,000–$200,000 | 5 to 20 years | 7.29% |
TD Bank | $10,000 minimum | 5 to 30 years | 7.99% |
Discover | $35,000–$300,000 | 10 to 30 years | 7.99% |
Rockland Trust Bank | $25,000–$400,000 | 5 to 20 years | 7.75% |
US Bank | $25,000–$250,000 | Up to 30 years | 8.40% |
Connexus Credit Union | $5,000 minimum | 5 to 15 years | 7.20% |
Note: The above APRs are current as of February 15, 2024. The exact APR you might qualify for depends on your credit score and other factors, such as whether you're an existing customer or enroll in auto-payments.
Regions Bank
Regions Bank
Rating: 3.8 stars out of 5
3.8
Bankrate Score
Bankrate Rating = 3.8/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
- Lender
- Regions Bank
- APR starting at
- 6.75%
- Loan Amount
- $10,000 to $250,000
- Max LTV Ratio
- 89%
- Max Debt-to-income ratio
- N/A
- Min. Credit Score
- N/A
- Term Lengths
- 10, 15, and 20 years
- Fees
- Late payment fee of 5% of amount due ($29 - $100)
- Available Nationwide?
- Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee and Texas
- Average days to close
- 32 days
Police and Fire Federal Credit Union
Police and Fire Federal Credit Union
Rating: 3.3 stars out of 5
3.3
Bankrate Score
Bankrate Rating = 3.3/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
- Lender
- Police and Fire Federal Credit Union
- APR starting at
- 7.75%
- Loan Amount
- Up to $600,000
- Max LTV Ratio
- Up to 100%
- Max Debt-to-income ratio
- N/A
- Min. Credit Score
- 700
- Term Lengths
- Five to 20 years
- Fees
- Appraisal upgrade fee ($150), returned loan payment fee ($15), credit card payment fee ($10), late payment fee (5% of monthly principal and interest payment)
- Available Nationwide?
- Philadelphia and South Jersey
- Average days to close
- Within 35 days of application
Third Federal Savings and Loan
Third Federal Savings and Loan
Rating: 4.5 stars out of 5
4.5
Bankrate Score
Bankrate Rating = 4.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
- Lender
- Third Federal Savings and Loan
- APR starting at
- 7.29%
- Loan Amount
- $10,000 to $200,000
- Max LTV Ratio
- 80%
- Max Debt-to-income ratio
- N/A
- Min. Credit Score
- N/A
- Term Lengths
- Five to 20 years
- Fees
- No prepayment or origination fees
- Available Nationwide?
- California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Virginia, Washington, Wisconsin, and Washington D.C.
- Average days to close
- N/A
TD Bank
TD Bank
Rating: 4.1 stars out of 5
4.1
Bankrate Score
Bankrate Rating = 4.1/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
- Lender
- TD Bank
- APR starting at
- 7.99%
- Loan Amount
- $35,000–$300,000
- Max LTV Ratio
- 90%
- Max Debt-to-income ratio
- 43%
- Min. Credit Score
- 620
- Term Lengths:
- 10, 15, 20 and 30 years
- Fees
- $99 origination fee, mortgage discharge fee when refinancing
- Available Nationwide?
- Connecticut, District Of Columbia, Delaware, Florida, Massachusetts, Maryland, Maine, North Carolina, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, Vermont
- Average days to close
- 2.5
Discover
Discover
Rating: 4.4 stars out of 5
4.4
Bankrate Score
Bankrate Rating = 4.4/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
- Lender
- Discover
- APR starting at
- 7.99%
- Loan Amount
- $35,000 to $300,000
- Max LTV Ratio
- 90%
- Max Debt-to-income ratio
- 43%
- Min. Credit Score
- 620
- Term Lengths
- 10, 15, 20 and 30 years
- Fees
- N/A
- Available Nationwide
- All states except Iowa and Maryland
- Average days to close
- N/A
Rockland Trust Bank
Rockland Trust Bank
Rating: 3.6 stars out of 5
3.6
Bankrate Score
Bankrate Rating = 3.6/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
- Lender
- Rockland Trust Bank
- APR starting at
- 7.75%
- Loan Amount
- $25,000-$400,000
- Max LTV Ratio
- 75%
- Max Debt-to-income ratio
- N/A
- Min. Credit Score
- N/A
- Term Lengths
- Five to 20 years
- Fees
- N/A
- Available Nationwide?
- Massachusetts only
- Average days to close
- N/A
U.S. Bank
U.S. Bank
Rating: 4.2 stars out of 5
4.2
Bankrate Score
Bankrate Rating = 4.2/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
- Lender
- U.S. Bank
- APR starting at
- 8.40%
- Loan Amount
- $15,000 to $750,000
- Max LTV Ratio
- 80%
- Max Debt-to-income ratio
- N/A
- Min. Credit Score
- 660
- Term Lengths
- Up to 30 years
- Fees
- No closing costs
- Available Nationwide?
- All U.S. States
- Average days to close
- N/A
Connexus Credit Union
Connexus Credit Union
Rating: 3.5 stars out of 5
3.5
Bankrate Score
Bankrate Rating = 3.5/5
The Bankrate Score is based on availability, including minimum loan amounts and loan types; affordability, including introductory/minimum APRs and discounts; and customer experience, including auto-payment and online accessibility.
Overview
- Lender
- Connexus
- APR starting at
- 7.20%
- Loan Amount
- $5,000 minimum
- Max LTV Ratio
- 80%
- Max Debt-to-income ratio
- N/A
- Min. Credit Score
- N/A
- Term Lengths
- 5, 10, and 15 years
- Fees
- Closing costs between $175 and $2,000
- Available Nationwide?
- All states except Alaska, Hawaii, Maryland and Texas
- Average days to close
- Within 30 days of applying
Methodology
To determine the best home equity loan rates, we surveyed over 30 home equity lenders. The top home equity loan rates listed account for the lowest advertised APR (annual percentage rate), based on a borrower with a credit score of 700 or higher and a combined loan-to-value (CLTV) ratio of 80 percent obtaining a 30-year home equity loan for $30,000.
Note that these lenders listed here are based solely on their offering the lowest APR, and are not necessarily the best overall home equity lenders Bankrate has scored. Learn more about Bankrate’s lender review methodology.
What is a home equity loan and how does it work?
A home equity loan is a lump sum that you borrow against the equity you’ve built in your home. Like other installment loans, you receive all of the money upfront and then make equal monthly payments of principal and interest for the life of the loan (similar to a mortgage). Most lenders will let you borrow up to 80 percent to 85 percent of your home’s equity; that is, the value of your home minus the amount you still owe on the mortgage.
These loans have fixed interest rates and typical repayment periods between five and 30 years. Because your home serves as the collateral for a home equity loan, a lender can foreclose on it if you fail to make the payments.
Home equity loans are available at many banks, credit unions and online lenders. You can use these funds for a range of purposes, including debt consolidation, home improvement projects or higher education costs. The amount you can borrow depends on how much equity you have, your financial situation and other factors.
After reviewing your application and checking your credit, the lender will tell you how much you can borrow, your interest rate, your monthly payment, your loan term and anyfeesinvolved. Once you agree to the loan terms, the financial institution will disburse funds as one lump sum. You then repay the loan over time in fixed monthly payments.
Calculating your home's equity
Home equity is the stake you have in your property – the percentage of the home you own outright. Over time, you build up equity in your home as you make payments on your mortgage or your home’s value rises. To calculate your home equity (and how much you may be able to borrow), subtract your current mortgage balance from the appraised value of your home.
For (a simplified) example, say you owe $200,000 on a home worth $400,000. This means that you have 50 percent equity in your home. If your lender lets you take out up to 85 percent of your home’s value ($340,000), you could borrow $140,000 through a home equity loan. A home equity calculator (like Bankrate’s) can estimate how much you can borrow.
Read more:How to calculate home equity
Pros and cons of home equity loans
Because the proceeds from a home equity loan come in one lump sum, home equity loans are best suited for homeowners who have a set budget. They’re a good option for those who want to use the funds for home renovations – the interest can be tax deductible if the money is used for certain repairs, expansions or improvements. Conversely, if you use home equity loan funds for any reason aside from substantial home improvements, such as paying off student debt or consolidating credit card bills, the mortgage interest is not deductible.
Another benefit of home equity loans is that they have competitive interest rates, which are usually much lower than those of personal loans and cash-out refinances. Compare lenders’ rates for the best deal available.
However, if you need money quickly, a home equity loan may not be the way to go. It can take longer to receive the funds from a home equity loan than a personal loan. Additionally, you may be subject to expensive closing costs and a more drawn-out application process.
PROS
Lower interest rates than those of unsecured debt such as credit cards or personal loans.
High borrowing limits.
Fixed monthly payments.
Interest may be tax deductible.
CONS
Potentially expensive closing costs.
Risk of losing your home if you are unable to make the payment or end up underwater on your mortgage if the home value drops.
Longer application/funding timeline than that of personal loans.
Best uses for a home equity loan
A home equity loan may be a good option if you've been planning a large home renovation or if you need to consolidate debt and you spot a good rate. If you’ve been considering a home equity loan, now might be a good time to lock in your rate before they rise further.
Because mortgage rates have risen sharply since early 2022, home equity loans have grown more attractive as an alternative to a cash-out refinance.
HELOC vs.Home equity loan
Home equity loans and home equity lines of credit (HELOCs) are both loans backed by the equity in your home. However, while a home equity loan has a fixed interest rate and disburses funds in a lump sum, a HELOC allows you to make draws with variable interest rates, like a credit card.
Generally speaking, if you're planning on doing multiple home improvement projectsover an extended period of time, a HELOC may be the better option for you. If you're thinking aboutconsolidating high-interest credit card debtor doing a larger home improvement project that would require all of the funds upfront, a home equity loan may be the best option.
HOME EQUITY LOANS HELOCS Interest Rates Fixed Variable APRs Slightly higher Slightly lower Funds disbursem*nt Lump sum Line of credit Repayment terms 10-30 years of fixed payments First 5-10 years: Interest-only paymentsLast 10-20 years: interest and principal Best for Debt consolidation, large home improvement projects, major purchases Ongoing home improvement projects, college tuition payments, medical expenses Home equity loan vs. cash-out refinance
When mortgage rates were at historic lows, cash-out refinances were a no-brainer. A homeowner could tap equity in their home while locking in a rock-bottom mortgage rate. But now that mortgage rates have risen, a cash-out refi no longer seems like the best answer. Getting a home equity loan instead — a simpler, if slightly more expensive type of financing — might be the better choice.
Say you have a $200,000 mortgage at 3 percent and you want to tap $50,000 of your home equity. A cash-out refi would require you to pay off the old loan and take a new loan for $250,000 at a much higher rate. But a home equity loan lets you keep the low-rate mortgage. And while it’ll probably be at a higher interest rate, it’ll be charged on only $50,000.
HOME EQUITY LOANS CASH-OUT REFIS Interest Rates Fixed Fixed APRs Slightly higher Slightly lower Funds disbursem*nt Lump sum Lump sum Repayment terms 10-30 years of fixed payments 30 years of fixed payments Best for Debt consolidation, large home improvement projects, major purchases Ongoing/long-term home improvement projects, college tuition payments, medical expenses Other alternatives to a home equity loan
A home equity loan is not the right choice for every borrower. Depending on what you need the money for, one of these options may be a better fit:
FAQs about home equity loans
Home equity lenders reviewed by Bankrate
- Amerant
- Amplify
- Bank of America
- Bethpage Federal Credit Union
- BMO Harris
- Chase
- Citibank
- Citizens
- Connexus Credit Union
- Credit Union of Texas
- Discover
- Fifth Third Bank
- Figure
- Flagstar Bank
- Frost Bank
- Homeside
- HSBC
- KeyBank
- Lower
- Northpointe
- PenFed Credit Union
- PNC Bank
- Police and Fire Federal Credit Union
- Prosper
- Quorum
- Republic Bank and Trust
- Regions Bank
- Rockland Trust Bank
- Spring EQ
- TD Bank
- U.S. Bank
Why trust Bankrate?
At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure our content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.
Bankrate analyzes loans to compare interest rates, fees, accessibility, online tools, repayment terms and funding speed to help readers feel confident in their financial decisions. Our meticulous research done by loan experts identifies both advantages and disadvantages to the best lenders.
When shopping for a home equity loan, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of the publication date. Check the lenders’ websites to see if there is more recent information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.
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