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Best home equity loan rates for February 2024

Updated February 20, 2024
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What are today's average interest rates for home equity loans?

LOAN TYPE AVERAGE RATE AVERAGE RATE RANGE
Home equity loan 8.92% 8.41% – 10.19%
10-year fixed home equity loan 9.02% 7.73% – 10.04%
15-year fixed home equity loan 8.87% 7.72 – 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 February 14, 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 lower

Home equity loan rates sank this week, with the 15-year, $30,000 home equity loan dipping to 8.87 percent and the 10-year equivalent falling to 9.02 percent, according to Bankrate’s national survey of large lenders.

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. At its Jan. 31 meeting, the Fed opted to maintain its current rate for the fourth meeting straight, signaling the potential for three rate cuts in 2024.

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:

  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.

Best home equity loan rates in February 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
$10,000–$250,000 10 to 20 years 6.75%
Up to $600,000 5 to 20 years 7.75%
$10,000–$200,000 5 to 20 years 7.29%
$10,000 minimum 5 to 30 years 7.99%
$35,000–$300,000 10 to 30 years 7.99%
$25,000–$400,000 5 to 20 years 7.75%
$25,000–$250,000 Up to 30 years 8.40%
$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.

Rating: 3.8 stars out of 5
3.8
Bankrate Score

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 logo
Rating: 3.3 stars out of 5
3.3
Bankrate Score

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

Rating: 4.5 stars out of 5
4.5
Bankrate Score

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 logo
Rating: 4.1 stars out of 5
4.1
Bankrate Score

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 logo
Rating: 4.4 stars out of 5
4.4
Bankrate Score

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 logo
Rating: 3.6 stars out of 5
3.6
Bankrate Score

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 logo
Rating: 4.2 stars out of 5
4.2
Bankrate Score

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 logo
Rating: 3.5 stars out of 5
3.5
Bankrate Score

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 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.

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

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

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.