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Your potential home equity loan rate depends in part on where your home is located. As of Dec. 15, 2022, the current average home equity loan interest rate in the five of the largest U.S. markets is 7.77 percent. Home co-investing is a home equity loan alternative that lets you tap into your home equity without borrowing against it. They will also share in the losses, if your home decreases in value. Lines of credit have an annual fee of $90, which you can waive for the first year by opening a U.S. You may borrow from your line of credit by visiting a local branch, using checks, ATMs or with a Visa Access Card.

A home equity loan can give you a lump sum of cash at a low interest rate, but you must use your home as collateral to secure the loan. You can apply for a home equity loan from Discover online or over the phone. The application process takes approximately six to eight weeks in total, according to Discover’s website. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear.
This Week’s Home Equity Loan Rates
KeyBank offers a 0.25% rate discount for clients who have eligible checking and savings accounts with KeyBank. Additionally, home equity loans have an origination fee of $295. The lowest home equity loan rates are typically only available to the most creditworthy borrowers, so take what steps you can to raise your credit score before you apply for a home equity loan. Beyond that, the most important thing is to shop around and compare offers from multiple lenders in order to find the best rate.
From there, you can use your funds as needed and begin making payments. Acash-out refinancereplaces your current home mortgage with a larger home loan. The difference between the original mortgage and the new loan is disbursed to you in a lump sum. The maindifference between a cash-out refinance and a HELOCis that a cash-out refinance requires you to replace your current mortgage, while a HELOC adds a loan to your current mortgage. Large purchases - Because HELOCs have longer repayment periods than many loans, they may be an attractive choice for making large purchases.
Figure: Best HELOC for quick access to funds
Available loan amounts for HELOCs and home equity loans range from $15,000 to $750,000, and up to $1 million for properties in California. It’s a good fit for people who just need to borrow a small amount, as loans range from as little as $2,000 to $500,000 or more. Frost offers a 0.25 percent discount for those who set up an automatic payment from a Frost checking or savings account. Borrowers have plenty of options when it comes to loan terms and amounts on BMO’s home equity loans. Plus, there are no application fees and you get a 0.5 percent discount when you set up autopay with a BMO Harris checking account.

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, starting as low as 3.49 percent APR. 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.
What's a good home equity loan rate?
Home equity loans and HELOCs are both technically second mortgages on your home. The lowest APR quoted is for loan terms of five years to 15 years and a minimum borrowing of $5,000. There are closing costs, however, which can range from $175 to $2,000. TD Bank has among the lowest interest rates that are not just an initial teaser rate—it’s for the life of the loan. The 4.49% starting APR is specifically for its 10-year home equity loan.
Bank’s home equity loans, which could save you thousands of dollars. When you don’t have a lot of equity in your home, it can be difficult to find a lender willing to extend you credit. Fortunately, KeyBank lets you borrow up to 90 percent of your home’s value in a first and second mortgage if you qualify. You can borrow up to 90 percent of your home’s value with rates as low as 2.32 percent APR in some states. KeyBank’s terms are also flexible — lasting up to 30 years — making this bank a solid choice. Loan amounts range from $25,000 to $150,000, with terms of five to 20 years.
Best Home Equity Loans FAQ
Money's Top Picks Best Credit Cards Cash back or travel rewards, we have a credit card that's right for you. Pet Insurance Best Pet Insurance Companies Get transparent information on what to expect with each pet insurance company. Historical Mortgage Rates A collection of day-by-day rates and analysis. Choosing between aHELOC and a home equity loancomes down to your financial situation, needs and priorities. While PenFed has a history of serving service members, you may also qualify for membership by being a member of other select organizations.

If you borrow $50,000, you’d pay $422 a month and a total interest amount of $25,947. Finally, if you borrow $100,000, you’ll pay $844 a month and $51,894 in total interest. The interest you pay on a home equity loan is tax deductible if you use the money on home renovations that improve the value of your residence. You can deduct the interest on up to $750,000 of home loans if you’re married and filing jointly or a single taxpayer. If you’re married and filing separately, you can deduct the interest you pay on up to $375,000 of home loans. Though Frost Bank’s nationwide availability is very limited, the bank has a helpful product selection tool, easy application process, and good price transparency.
The application process is completely online, and the application is streamlined and full of easy-to-understand language. Borrowers may have to repay setup costs if the line of credit is closed within 36 months. Depending on the state in which you live, you may also have to pay mortgage taxes and an annual fee. There’s a fixed interest rate, which means the payments won’t change over the life of the loan unless you make additional draws. Third Federal charges a $65 annual fee, which is waived for the first year. If you stop making your payments, your lender will not be able to foreclose on your home.
Discover Bank does not guarantee the accuracy of any financial tools that may be available on the website or their applicability to your circumstances. For personal advice regarding your financial situation, please consult with a financial advisor. You're more likely to be approved for a home equity loan with a credit score of 700 or higher.
Gives you a line of credit that you borrow against as you need it, rather than requiring you to figure out an exact sum beforehand (though it's still good to have an idea of the approximate total). Credit union membership is limited to veterans and current military members, their families, and certain federal employees, retirees and contractors. Offers a full line of conventional and government loan products. Provides customized rate and fee quotes without requiring contact information.
A rough rule of thumb is that the amount of equity you have in your home is the home’s value minus any outstanding loans on the property, like your mortgage. You can use our home equity loan calculator for a more precise calculation. Customer support by phone is available Monday through Saturday from 7 a.m.
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. Tuition or education costs - HELOCs often have lower interest rates than student loans, though some lenders may place restrictions on how you can use the funds. With a HELOC, you’re given a line of credit that’s available for a set time frame , usually up to 10 years. While most HELOCs have aninterest-only draw period, you can make both interest and principal payments to pay off the line of credit faster. Lower gets its name from offering "lower" rates and promises a quick approval and closing process.