Best home equity loan rates for September 2023

Written by
Jeff Ostrowski
Edited by
Suzanne De Vita
Reviewed by
Mark Hamrick
Edited by
Suzanne De Vita
Reviewed by
Mark Hamrick
As of Wednesday, September 27, 2023
On This Page

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. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.

How to choose the best home equity loan for you:

  1. Compare your credit score to lender requirements. Some lenders accept applications from borrowers with credit scores in the 600s, others don’t.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

What are today's average interest rates for home equity loans?

LOAN TYPE AVERAGE RATE AVERAGE RATE RANGE
Home equity loan 8.62% 8.01% – 9.94%
10-year fixed home equity loan 8.75% 8.02% – 9.85%
15-year fixed home equity loan 8.73% 7.99% – 10.73%

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 September 20, 2023. 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 rise slightly

Home equity loan rates grew slightly as of Sept. 20, with the 15-year, $30,000 home equity loan averaging 8.73 percent, up from 8.72 the previous week, according to Bankrate’s national survey of large lenders. The 10-year $30,000 loan averaged 8.75 percent, up from 8.74 percent the prior week.

Unlike home equity lines of credit (HELOCs), 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).

Best home equity loan rates in September 2023

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 BEST FOR
$35,000–$300,000 10 to 30 years 6.24% (1st lien) Competitive Rates
$25,000–$150,000 5 to 20 years 8.74% Different loan options
$25,000–$250,000 1 to 30 years 9.28% (1st lien) Homeowners with limited equity
Up to $500,000 Not specified Not disclosed Fast funding
$10,000–$1,000,000 10 to 20 years 8.04% Flexible loan terms
$15,000–$750,000 Up to 30 years 8.00% Low fees at a national bank
$10,000–$200,000 5 to 20 years 6.49% Customer service
Starting at $2,000 7 to 20 years 7.13% Low fees at a regional bank
Starting at $5,000 5 to 20 years 9.25% Branch network
$10,000–$250,000 7 to 20 years 6.25% Customer experience

Note: The above APRs are current as of August 3, 2023. 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.

Discover: Best home equity loan lender for competitive rates

Discover logo
4.3
Bankrate Score

Overview

Discover is well known for its rewards credit cards, but this national bank also offers a full lineup of banking services, such as checking and savings accounts, personal loans and student loans. We chose this bank as the best for low rates because of its national reach (Discover is available in 48 states — the exceptions being Maryland and Iowa — and Washington D.C.).
 
 
Lender
Discover
APR starting at
6.24% (1st lien)
Loan Amount
$35,000 to $300,000
Max LTV Ratio
90%
Max Debt-to-income ratio
43%
Min. Credit Score
620
Term Lengths
10 to 30 years
Fees
None
Available Nationwide
Available in 48 states (not in Maryland or Iowa)
Average days to close
Six-eight weeks

BMO Harris Bank: Best home equity loan lender for different loan options

3.9
Bankrate Score

Overview

BMO Harris Bank has more than 600 branches spread across Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri and Wisconsin, but customers nationwide can access BMO’s online banking resources. Its home equity loans come with low loan minimums, few fees and a variety of term options.
 
 
Lender
BMO Harris Bank
APR starting at
8.74%
Loan Amount
$25,000 to $150,000
Max LTV Ratio
Not Specified
Max Debt-to-income ratio
Not Specified
Min. Credit Score
700
Term Lengths
5 to 20 years
Fees
None
Available Nationwide?
Available in all states except for Texas and New York 
Average days to close
35-40 days

KeyBank: Best home equity loan lender for homeowners with limited equity

4.2
Bankrate Score

Overview

You can borrow up to 90 percent of your home’s value. KeyBank’s terms are also flexible — lasting up to 30 years — making this bank a solid choice.
 
 
Lender
Keybank
APR starting at
9.28% (1st lien)
Loan Amount
$25,000–$250,000
Max LTV Ratio
90% Combined LTV
Max Debt-to-income ratio
Not Specified
Min. Credit Score
Not Specified
Term Lengths:
1 to 30 years
Fees
There’s a $295 origination fee, and you may have to pay costs of appraisal, title, flood insurance and mortgage tax if you repay and terminate the loan within 36 months.
Available Nationwide?
Available in 48 states (not Alabama or Texas)
Average days to close
42 days

Spring EQ: Best home equity loan lender for fast funding

Spring EQ logo
4.3
Bankrate Score

Overview

If you have an average credit score and you’ve built equity in your home, Spring EQ can help you tap into that equity with flexible loan terms to fit most borrower profiles.
 
 
Lender
Spring EQ
APR starting at
Not disclosed
Loan Amount
$10,000 to $1 million
Max LTV Ratio
90%
Max Debt-to-income ratio
50%
Min. Credit Score
680
Term Lengths
Not Specified
Fees
Spring EQ does not disclose its fees, but you may be on the hook for an administration fee, credit report and flood certification fees, document prep fees, title report fees, notary or title fees, recording fees and an appraisal fee.
Available Nationwide?
Available in 48 states (not Maryland or Iowa)
Average days to close
Not disclosed

Flagstar Bank: Best home equity loan lender for flexible loan terms

Flagstar Bank logo
4
Bankrate Score

Overview

Established in 1987 and with 150 branches spread across California, Indiana, Michigan, Ohio and Wisconsin, Flagstar Bank consistently gets high marks for customer satisfaction and offers a full lineup of banking services.
 
 
Lender
Flagstar
APR starting at
8.04%
Loan Amount
$10,000 to $1 million
Max LTV Ratio
Not Specified
Max Debt-to-income ratio
Not Specified
Min. Credit Score
Not Specified
Term Lengths
10 to 20 years
Fees
There’s no prepayment penalty and no bank-imposed closing costs. However, borrowers are responsible for prepaid interest, all state- and government-specific charges and taxes and lender’s title insurance.
Available Nationwide?
Available in nine states: Michigan, Indiana, Ohio, Wisconsin, California, Florida, New York, New Jersey and Arizona
Average days to close
48 days

U.S. Bank: Best home equity loan lender for low fees at a national bank

U.S. Bank logo
4
Bankrate Score

Overview

With roots that trace back to 1863, U.S. Bank is now the fifth-largest bank by assets in the country, with about 3,000 branch locations in 27 states. It’s a solid option for low fees at a nationwide lender.
 
 
Lender
U.S. Bank
APR starting at
8.00%
Loan Amount
$15,000 to $750,000 (Up to $1 million for California properties)
Max LTV Ratio
Not Specified
Max Debt-to-income ratio
Not Specified
Min. Credit Score
Not Specified
Term Lengths
Up to 30 years
Fees
None
Available Nationwide?
Available in 47 states (not in Delaware, South Carolina, or Texas)
Average days to close
15.5 days

Third Federal Savings and Loan: Best home equity loan lender for customer service

4.4
Bankrate Score

Overview

Third Federal (ThirdFed) offers a wide array of banking and financial products, including home equity loans and lines of credit, mortgages and deposit accounts. The bank is known for its dedication to helping customers achieve their financial goals through offering low rates and little fees.
 
 
Lender
Third Federal Savings and Loan
APR starting at
6.49%
Loan Amount
$10,000 to $200,000
Max LTV Ratio
80%
Max Debt-to-income ratio
Not Specified
Min. Credit Score
Not Specified
Term Lengths
5 to 30 years
Fees
The only fee charged is an annual fee of $65, which is waived the first year.
Available Nationwide?
Has branches in Ohio and Florida; home equity loans also available in Kentucky, California, Pennsylvania, New Jersey, Virginia and North Carolina
Average days to close
Not disclosed

Frost Bank: Best home equity loan lender for low fees at a regional bank

4.5
Bankrate Score

Overview

Established in 1868 and with 130 branches spread across Texas, Frost is a full-service bank that offers checking and saving accounts, personal loans, insurance, investment products and more. Frost’s customer service is also consistently highly rated.
 
 
Lender
Frost
APR starting at
7.13%
Loan Amount
Starting at $2,000
Max LTV Ratio
80%
Max Debt-to-income ratio
Not Specified
Min. Credit Score
Not Specified
Term Lengths
7 to 20 years
Fees
There are no prepayment penalties, no application fees and no annual fees. There are also no closing costs on loans from $2,000 to $500,000.
Available Nationwide
You’ll need to show proof of homeowners insurance, bring your government-issued photo ID and provide your Social Security number.
Average days to close
30 days

Connexus Credit Union: Best home equity loan lender for branch network

Connexus Credit Union logo
4.1
Bankrate Score

Overview

Established in 1935, Connexus offers auto loans, personal loans, student loans, credit cards, banking products and more. Connexus’ home equity loan rates are on par with those of other financial institutions on this list.
 
 
Lender
Connexus
APR starting at
9.25%
Loan Amount
Starting at $5,000
Max LTV Ratio
90%
Max Debt-to-income ratio
Not Specified
Min. Credit Score
Not Specified
Term Lengths
5 to 20 years
Fees
Borrowers won’t pay an annual fee, but they will be responsible for closing costs that can range from $175 to $2,000, depending on the property location and loan terms. The credit union also charges a returned loan payment fee of $15, a convenience fee of $9.95 for paying by debit or credit card online ($14.95 by phone) and a forced place insurance processing fee of $12.
Available Nationwide?
All states except Maryland, Texas, Hawaii, and Alaska
Average days to close
Not disclosed

Regions Bank: Best home equity loan lender for customer experience

4.1
Bankrate Score

Overview

Established in 1971 and with a presence in 15 states, Regions offers a full lineup of personal banking services, including checking and savings accounts, credit cards, mortgages, student loans, personal loans, auto loans and home equity loans and lines of credit.
 
 
Lender
Regions Bank
APR starting at
6.25%
Loan Amount
$10,000 to $250,000
Max LTV Ratio
89%
Max Debt-to-income ratio
Not Specified
Min. Credit Score
Not Specified
Term Lengths
7 to 20 years
Fees
Regions Bank will pay all closing costs, but borrowers may be responsible for over-limit fees of $29, a late fee of 5% of the payment amount (limits apply) and a returned check fee of $15. There’s no annual fee.
Available Nationwide?
Available in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee and Texas
Average days to close
25 days

Methodology

Bankrate’s experts regularly research, review and rate home equity lenders to help you objectively compare and choose a lender that fits your needs. To determine a home equity lender’s Bankrate Score, Bankrate rates lenders on a scale of one to five stars — with five the highest rating — based on a variety of factors relating to the lender’s products and services. To assign our ratings, we assessed each home equity lender across three core areas-

  • Availability: The minimum loan amount, time to approval, days to close, minimum draw requirement, minimum credit score and loan types offered
  • Affordability: The minimum APR, intro APR, discounts for auto-payers and fees
  • Borrower experience: Online application availability, online account access, customer support options, auto-payment and app availability.
View our full methodology here.

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 any fees involved. 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.

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

  • Checkmark

    Lower interest rates than those of unsecured debt such as credit cards or personal loans.

  • Checkmark

    High borrowing limits.

  • Checkmark

    Fixed monthly payments.

  • Checkmark

    Interest may be tax deductible.

CONS

  • Close X

    Potentially expensive closing costs.

  • Close X

    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.

  • Close X

    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.

Some of the best uses to make the most of your loan include:

  • Home improvements: Because these can often add value over time, using your home's value to increase the value can be helpful.
  • Education: Home equity loans generally have a lower interest rate than private student loans.
  • Debt consolidation: Using home equity to help with debt consolidation may give you better interest rates so you can get your finances on track.
  • Emergency expenses: If you don't have the funds for an immediate need, home equity loans can give you money with much more favorable interest rates than something like a payday loan.
  • Investments: Using home equity on investments may benefit your financial portfolio over time.

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:

  • Home equity line of credit (HELOC): Like a home equity loan, a HELOC allows you to borrow from your home's equity. However, you'll borrow from a credit line. Additionally, HELOCs have variable rates.
  • Cash-out refinance: If you can qualify for a lower interest rate than what you're currently paying on your mortgage, you may want to refinance your mortgage. If you refinance for an amount that's more than your current mortgage balance, you can pocket the difference in cash.
  • Reverse mortgage: With a reverse mortgage, you receive an advance on your home equity that you don't have to repay until you leave the home. However, these often come with many fees, and variable interest accrues continuously on the money you receive. These are also only available to older homeowners (62 or older for Home Equity Conversion Mortgage, the most popular reverse mortgage product, or 55 and older for some proprietary reverse mortgages).
  • Personal loan: Personal loans may have higher interest rates than home equity loans, but they don't use your home as collateral. Like home equity loans, they have fixed interest rates and disburse money in a lump sum.

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 projects over an extended period of time, a HELOC may be the better option for you. If you're thinking about consolidating high-interest credit card debt or 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 disbursement Lump sum Line of credit
Repayment terms 10-30 years of fixed payments First 5-10 years: Interest-only payments Last 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 disbursement 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

FAQs about home equity loans

Home equity lenders reviewed by Bankrate

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.