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2022's Best Home Equity Loan Lenders
Let your mortgage work for You
Afford your next renovation or other large purchase with a home equity loan. Compare our top lenders and find the best home equity loan today.
2022's Best Home Equity Loan Lenders
Afford your next renovation or other large purchase with a home equity loan. Compare our top lenders and find the best home equity loan today.
2022's Best Home Equity Loan Lenders
1
Low Rates
9.8
Outstanding
Our brand scores, which are rated on a scale up to 10, are based on our weighted formula of TrustPilot and User Engagement scores.
Based on 19,398 Reviews
4.6
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
  • Award-winning customer service
  • Real-time updates on application progress
  • Cash-out refinance option
  • 100% digital process with less paperwork
2
8.9
Very Good
Our brand scores, which are rated on a scale up to 10, are based on our weighted formula of TrustPilot and User Engagement scores.
Based on 11,340 Reviews
4.6
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
  • Compare home equity lenders in seconds
  • Pre-qualify for multiple lenders
  • HELOC options available too
  • 100% online process
  • Free home equity loan comparison too
3
8.0
Very Good
Our brand scores, which are rated on a scale up to 10, are based on our weighted formula of TrustPilot and User Engagement scores.
Based on 10,247 Reviews
4.3
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
  • Digital lender with strong reputation
  • Customized rate quote in 3 minutes
  • Pre-qualify without hard credit pull
  • Cash-out refinance loans available
  • Variety of closing cost options
4
7.7
Good
Our brand scores, which are rated on a scale up to 10, are based on our weighted formula of TrustPilot and User Engagement scores.
Based on 4,022 Reviews
4.0
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
  • Digital-only mortgage platform
  • Loans customized to your needs
  • Fast Streamlined Application
  • Millions of satisfied borrowers
5
7.6
Good
Our brand scores, which are rated on a scale up to 10, are based on our weighted formula of TrustPilot and User Engagement scores.
Based on 1,837 Reviews
4.7
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
  • Specializes in HELOCs
  • Apply in minutes and close in weeks
  • Redraw up to 100%
  • Various term options available
6
7.4
Fair
Our brand scores, which are rated on a scale up to 10, are based on our weighted formula of TrustPilot and User Engagement scores.
Based on 181 Reviews
4.6
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
  • Get cash, give share of future home value
  • Funds can be used for any purpose
  • No interest or monthly payments
  • Funding of up to $500,000
7
7.4
Fair
Our brand scores, which are rated on a scale up to 10, are based on our weighted formula of TrustPilot and User Engagement scores.
No reviews on
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
  • Low, fixed rates
  • Borrow $35,000 to $300,000
  • Get a quote online in minutes 24/7
  • $0 origination fees
Our Best Overall
1
Our Best Overall
9.8
Outstanding
Our brand scores, which are rated on a scale up to 10, are based on our weighted formula of TrustPilot and User Engagement scores.
Based on 19,398 Reviews
4.6
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
  • Award-winning customer service
  • Real-time updates on application progress
  • Cash-out refinance option
  • 100% digital process with less paperwork
500,575
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Introduction to Home Equity Loans

Home equity loans are a type of secured loan in which the borrower uses their home equity as collateral. This type of loan is often used to finance major expenses such as home improvement, medical expenses, or college tuition fees. A home equity loan creates a lien against the borrower’s home and reduces home equity. As the borrower makes payments, their home equity increases again. A home equity loan usually has a shorter repayment term than a traditional mortgage.

Types of Home Equity Loans

Home equity loan

A home equity loan is like any other type of closed-end loan in that the lender pays the borrower a lump sum which the borrower must repay within an agreed payment term. Closed-end home equity loans usually come with a fixed interest rate, giving the borrower the predictability of fixed monthly payments for the life of the loan.

Home equity line of credit (HELOC)

A HELOC is an open-end revolving line of credit with an adjustable interest rate. The borrower may draw funds at any time, provided they don’t exceed the approved credit limit. The borrower only pays principal and interest on the funds drawn. Like a home equity loan, a HELOC may involve closing fees at the start of the loan.

How to Qualify for a Home Equity Loan

The basic requirement of a home equity loan is that you own your home. At most, lenders permit homeowners to borrow up to a combined loan-to-value (CLTV) ratio of 90% (although some credit unions may allow 100% CLTV). In other words, a lender will not approve you for a home equity loan if it means your home equity drops below 10% of your home’s current appraised value. Generally, home equity loans can only be taken on owner-occupied properties, although in some cases it may be possible to use a rental or investment property as collateral.

Aside from CLTV, all the other minimum requirements of mortgage or loan eligibility apply. You will need to be a U.S. citizen or resident aged 18 years or more. The lender will run a credit check, which will affect your credit score. And you will need to provide certain financial documentation, although less than for a traditional mortgage application.

Our Top Mortgage Lenders

#1
View Rates
Pros
  • 100% online application (in most cases)
  • Quick pre-approval and closing times
  • Flexible repayment terms (8-29 years)
Cons
  • No branches
  • Lack of support for self-employed borrowers
  • Your data may be shared across Quicken partners
If you’re looking for an easy and comfortable loan, QuickLoans can help. Not only do QuickenLoans help ensure you get a mortgage that’s right for you to save time, but the platform ensures you are aware of your loans status 24/7 so you can keep track of what is required of you and what has already been done to avoid repeating steps that have already been completed, saving you time and confusion.
#2
View Rates
Pros
  • Free comparison tool
  • Pre-qualify for multiple lenders
  • Entirely online service
Cons
  • Not a direct lender
  • Contact details required
LendingTree uses technology to help find the best lending solutions, based in North Carolina. To no surprise, its unique, innovative approach to consumer lending has already proven its worth in the typical consumer experience, thanks to the volume of information being made available to users searching for a loan. It’s ideal for those looking for several potential options, and with over 1,500 lenders to choose from, you’ll certainly find a lender perfect for all your needs.
#3
View Rates
Pros
  • Offers Fannie Mae 3% down conventional loans
  • Loan experts are on hand to assist at any time
  • Full suite of non-conventional loans
Cons
  • Rates not advertised publicly
  • No weekend phone hours
  • Not licensed in NY
AmeriSave Mortgage Corporation is a direct mortgage lender operating in 49 states and DC. Since 2002, it has financed more than 400,000 homes to the tune of $105 billion in funding. It is known for its competitive rates and streamlined application, with approvals in as quickly as 25 days. It offers a wide range of loans, making it a good choice for anyone looking to purchase a home or refinance their mortgage.

Purpose of a Home Equity Loan

Technically speaking, a home equity loan can be used for any large expense. This could include consolidating credit card debt or other debts; funding an unexpected bill, such as an unexpected medical procedure; financing a home improvement or refurbishment; purchasing a vehicle; or funding a child’s college tuition.

Generally, a home equity loan is best used for anything that improves your financial position, such as paying off debts or boosting your home’s value. Let’s say you’re struggling to keep up with payments to three separate credit card providers, all of which are charging high interest. With a home equity loan, you could replace those high-interest debts with a single, lower-interest repayment to your home equity lender.

While a home equity loan can technically be used for any purpose, that doesn’t mean it should be used recklessly. When the housing market crashed in 2007-8, many homeowners found out the hard way what it means to have a lien against one’s home. When you secure a loan with your property, that gives the lender permission to foreclose the property if you default on the loan. When taking a home equity loan, always take caution against over-extending.

Alternatives to Home Equity Loans

Cash-out refinance

A cash-out refinance is when the new mortgage is greater in value than what you owe on the old loan, allowing you to cash out the difference. A cash-out refi usually involves a lower rate than a home equity loan but higher closing costs and fees. Therefore, if you’re going for a smaller amount, a home equity loan is better. If you’re going for a larger amount, you may want to consider a cash-out refi. The exact decision depends on your home equity and your loan amount and on how much you’re able to afford in monthly payments.

Home equity investment

A new type of home equity loan alternative gaining in popularity is a home investment, where a financing company invests in your home in exchange for a share of your home’s future sale price or market value. There are a number of different versions of this on the market, but the principle is more or less the same in all cases: you get the cash up front, and the financing company shares in your home’s appreciation when you sell.

Personal loan

An unsecured personal loan is the easiest way to get your hands on quick cash because it doesn’t involve any collateral and the process is very quick, with funds by the next business day. Personal loans beat home equity loans and cash-out refis for convenience, but beware: the interest rates are usually much higher. While the average cash-out refi or home equity loan rate in 2021 is 3-4%, the average personal loan rate is 10-20% - which can send your monthly payment soaring.

What to Look for When Comparing Home Equity Loans

Loan type

We described a number of home equity loan types and alternatives above, including traditional home equity loans, HELOCs, cash-out refis, and home investment products. Carefully consider all the options to figure out which is best for you.

Maximum LTV

Combined loan-to-value (CLTV) is as important a factor in refinancing as a down payment is when purchasing. If you only have 20% equity in your home, then you won’t qualify for a home equity lender with maximum 80% CLTV. Therefore, always compare lender maximum LTVs to find one that suits you.

APR

A home equity loan might not be like your original mortgage, but it is still a loan and the interest rate (or APR, taking into account the interest rate and certain other costs) is still the most important factor in determining your monthly repayment. Always compare a few lenders to find the best rates for your financial and credit profile.

Terms

A home equity loan term can range from 5-30 years although most lenders allow 5-15 years. HELOCs usually allow up to 10 years to withdraw funds and maximum 20 years to repay. The best repayment term for you depends on how much you can afford in monthly payments. The shorter the term, the higher your monthly payments but the less you’ll pay in interest over the life of the loan. The longer the term, the lower your monthly payments but the more you’ll pay your lender in the long run.

Ease of application

Gone are the days when you had to walk into a physical branch to apply for a home equity loan or HELOC. These days, the best mortgage lenders let you apply for a home equity loan online, sometimes through a fully automated online mortgage platform and other times with phone assistance from a loan agent. If convenience is important to you, then keep an eye out for digital-friendly lenders.