Frost Bank: 2024 Home Equity Review

Benefits

• You won’t pay any closing costs for a home equity loan with Frost Bank if the amount is between $2,000 and $500,000. (If you borrow over $400,000 with a HELOC, though, you might.) There are no application or annual fees, either, nor prepayment penalties.
• If you make automatic payments via a Frost savings or checking account, you’ll get a rate deduction of 0.25 percent. (The only time this doesn’t apply is if your mortgage is paid off and your loan is greater than $250,000.)

Drawbacks

• Since Frost Bank only operates in Texas, you can’t take out a home equity loan or HELOC with this bank if you live anywhere else.
• To get a HELOC, you’ll need to create a deposit account with the bank. (This doesn’t apply to home equity loans.)

Home equity loan products offered

Frost Bank offers fixed-rate home equity loans and variable-rate HELOCs.

The minimum borrowing amount for a home equity loan is $2,000. If you take out a HELOC instead, the minimum borrowing amount is $8,000. The maximum amount you can borrow for both options is up to 80 percent of your home’s appraised value. With the home equity loan, you can choose from a variety of repayment terms: seven years to 20 years. HELOCs only have one repayment term: 20 years.

Types of fees charged

With a home equity product from Frost Bank, you don’t have to worry about paying prepayment, application or annual fees. In addition, you won’t pay closing costs unless you take out a home equity loan greater than $500,000 or a HELOC greater than $400,000. There’s also a $15 monthly service charge, which Frost waives for new Frost Plus accounts.

How to qualify for a home equity loan with Frost Bank

There’s no minimum credit score requirement for a home equity product, according to a Frost Bank representative, and the maximum debt-to-income (DTI) ratio is 50 percent. In addition, the combined loan-to-value (CLTV) ratio must be 80 percent or less. Although you don’t need to have a bank account with Frost to take out a home equity loan, you’ll need to open a deposit account for a HELOC.

How to apply with Frost Bank

You can apply for a home equity loan or HELOC through Frost’s website or by calling 800-513-7678. The online application process takes about 15 minutes to complete.

How Bankrate scored Frost Bank

• Methodology

  To determine a home equity lender's Bankrate Score, Bankrate rates lenders on a scale of one (1) to five (5) stars — with five (5) the highest rating — based on a variety of factors relating to the lender's products and services. To assign our ratings, we assessed each mortgage lender across three core areas:

  • Affordability: Annual percentage rate (APR) - 80%; introductory APR - 20%
  • Availability: Licensing - 50%; credit score - 20%; loan minimum - 10%; draw requirement - 10%; loan products - 10% 
  • Borrower experience: Rate transparency - 45%; convenience - 35%; customer service - 10%; fixed-rate options - 10%

  Learn more about our methodology.