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Best home equity loan rates for December 2024

Updated December 11, 2024

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

LOAN TYPE AVERAGE RATE AVERAGE RATE RANGE
Home equity loan 8.40% 8.08% – 9.49%
10-year fixed home equity loan 8.55% 7.90% – 9.31%
15-year fixed home equity loan 8.48% 8.08% – 10.17%

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 December 4, 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 stay flat

Home equity rates barely budged this week, with the average rate on the 10-year, $30,000 home equity loan holding steady at 8.55 percent and the 15-year $30,000 loan dipping a bare basis point to 8.48 percent as of Dec. 4, according to Bankrate’s survey of large lenders.

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). However, interest rates on new home equity loans do shift in response to economic conditions and influences, including Federal Reserve policy. At its latest meeting in early November, the central bank cut interest rates by a quarter-point and signaled more cuts could be coming in the future. The Fed’s last meeting of this year is scheduled for Dec. 17-18.

Generally, a home equity loan is best when you’re certain of the total lump sum you need and exactly when and how you’ll spend the money. Debt consolidation, along with home repairs and renovations, are the leading reasons people cite to tap into their home equity, according to Bankrate’s Home Equity Insights Survey

“Many homeowners are using these products for debt consolidation to get out of high-interest rate credit card debt or pay off student loans,” says Tanya Bates, mortgage regional manager at BOK Financial. “Also, with [mortgage] rates still higher than some prefer, using the equity to improve their existing home [instead of moving] has seen strong demand.”

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.
Choosing the right lender is an important part of the home equity loan process. Start out with three lenders. Take the time to research them thoroughly, comparing their reputation, loan terms, rates and customer service. Not only will this streamline the borrowing process, but it will also help you secure the right home equity loan for your financial situation. — Linda Bell, Senior Writer, Home Lending

Best home equity loan rates in December 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
Up to $600,000 5 to 20 years 6.99%
$10,000–$250,000 10 to 20 years 6.75%
$5,000 minimum 5 to 15 years 7.31%
$10,000–$300,000 5 to 20 years 7.24%
$25,000–$250,000 Up to 30 years 7.65%
$10,000 minimum 5 to 30 years 7.99%
$35,000–$300,000 10 to 30 years 6.75% 1st lien | 7.93% 2nd lien
$25,000–$400,000 5 to 20 years 8.12%

Note: The above APRs are current as of December 5, 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.

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
6.99%
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: 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

Connexus Credit Union logo
Rating: 3.5 stars out of 5
3.5
Bankrate Score

Overview

Lender
Connexus
APR starting at
7.31%
Loan Amount
$5,000 minimum
Max LTV Ratio
90%
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

Rating: 4.5 stars out of 5
4.5
Bankrate Score

Overview

Lender
Third Federal Savings and Loan
APR starting at
7.24%
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

U.S. Bank logo
Rating: 4.2 stars out of 5
4.2
Bankrate Score

Overview

Lender
U.S. Bank
APR starting at
7.65%
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

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
$10,000 minimum
Max LTV Ratio
90%
Max Debt-to-income ratio
43%
Min. Credit Score
620
Term Lengths:
5, 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
6.75% 1st lien | 7.93% 2nd lien
Loan Amount
$35,000 to $300,000
Max LTV Ratio
90%
Max Debt-to-income ratio
43%
Min. Credit Score
680
Term Lengths
10, 15, 20 and 30 years
Fees
No origination, application, appraisal, processing or closing costs
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
8.12%
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
No annual fees or closing costs
Available Nationwide?
Massachusetts only
Average days to close
N/A

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

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

  • Checkmark Icon

    High borrowing limits.

  • Checkmark Icon

    Fixed monthly payments.

  • Checkmark Icon

    Interest may be tax deductible.

CONS

  • Close X Icon

    Potentially expensive closing costs.

  • Close X Icon

    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.

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    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.

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)

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 — just like a traditional mortgage — a HELOC allows you to make periodic draws up to a certain amount, like a credit card. You pay interest on the withdrawals at a variable rate. You can withdraw funds, repay them and then borrow again, for a number of years. After that, you can no longer tap the credit line, but must repay it all, over a period of time.

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 short-term remodel that would require all of the funds upfront, a home equity loan may be the best option.

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 and up for a Home Equity Conversion Mortgage, the most popular reverse mortgage product, or 55 and up for some proprietary reverse mortgages).

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.