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The Best Home Equity Lenders of 2019: VP Editor's Choice
Home equity loans work similarly to personal loans, but due to the high quality collateral underlying them (your home), usually feature lower rates and favorable terms. While home equity products come in fixed-rate loans and variable-rates lines of credit, here we cover fixed-rate home equity loans exclusively.
Home equity loans are offered by a broad number of institutions, including banks, credit unions and even online lenders. Given the large number of home equity lenders out there, it's difficult to know which one will best fit your needs. What matters to you will depend on how much equity you own in your home, how much cash you need, and what you intend to use the funds for.
To make the shopping process easier, we've identified the most popular use cases and picked the best home equity lender for each category. We reviewed dozens of data points across the entire spectrum of home equity lenders and present our findings below.
Best Home Equity Loan for Debt Consolidation
Regions Bank featured the lowest advertised minimum rate of all the lenders we reviewed, beginning at 4.125% with autopay. Qualifying Regions customers could maximize their savings by consolidating their debt with a Regions Home Equity Loan.
Highlights: The bank offers home equity loans on properties with loan-to-value (LTV) ratios of up to an above-average 90%, which can be useful if you haven't built up a huge amount of equity in your home. If you're an existing Regions Bank customer, getting a home equity quote from them should be a no-brainer, as the bank offers relationship discounts of up to 0.50% off your quoted rate.
Drawbacks: Like other regional banks, Regions isn’t widely accessible to all borrowers, particularly in the West and Northeast. Homeowners looking for nationwide coverage may be better off with a reputable online lender like Discover, which offers home equity loans across all 50 states. Discover offers comparable rates to Regions but features longer 20- and 30-year loan terms, which can help minimize your monthly payments for those big life expenses.
- Terms: 7, 10 or 15-yr
- Max Loan Size: $250,000
- Maximum LTV: 89%
How to Get a Regions Home Equity Loan: To apply for a Regions Home Equity Loan, your property must be located in a state that has an existing Regions Bank location. Regions operates primarily through the Midwest and South, with around 1,700 branch locations. Get a quick quote on a home equity loan by visiting your local Regions Bank or clicking the link above.
Best Home Equity Loan for Home Improvement
TD Bank was our top pick for the best home equity lender for home improvement projects, thanks to its high maximum loan balance, competitive rates and wide selection of loan terms. Homeowners who need to finance large expensive projects at cheap rates may find attractive terms with TD Bank, where fixed-rate home equity loans start at 4.49%.
Highlights: The lender offers one of the largest permitted loan balances of any lender, allowing borrowers to cash out on up to $500,000, making it ideal for homeowners in high-cost areas like New York and New Jersey.
Drawbacks: Borrowers who live on the West Coast or outside the vicinity of a TD branch will not be able to obtain a TD home equity loan. If you're looking for a more accessible lender, we recommend U.S. Bank, which offers similar terms and operates branch locations pretty much everywhere outside the east coast.
- Terms: 5, 10, 15, 20 or 30-yr
- Max Loan Size: $500,000
- Rates: 4.49% - 10.26%
How to Get a TD Home Equity Loan: If you're interested in obtaining a home equity quote from TD Bank, you'll need to live in a state with a TD Bank branch. The lender operates primarily on the East Coast, with branches strewn across 15 states along the Atlantic seaboard. Visit your local TD Bank for a home equity rate quote, or click the link above to start a free rate quote online.
Best Home Equity Loan for Veterans
Navy Federal Credit Union was hands down our top choice for veteran homeowners. As a credit union, Navy Federal places the needs of its members first, unlike a bank that might focus on its bottom line. It also doesn't hurt that Navy Federal earned J.D. Power's top marks in 2018 for customer satisfaction among mortgage servicers. Navy Federal was the only lender in our study that offered a 100% LTV home equity loan, allowing qualifying borrowers to cash out on the entire value of their home.
Highlights: Veterans who obtain a mortgage product from Navy Federal can be confident that their loans will be serviced in-house, avoiding the customer service issues that plague lenders who outsource their customer service operations offshore. This ensures that veterans and their family will always deal with experienced representatives who understand their needs.
Drawbacks: While there's not much in the way of drawbacks when it comes to Navy Federal, the membership requirement can be restrictive if you have no connections with the military. However, Pentagon Federal Credit Union (PenFed) is another military-focused credit union where membership is open to just about anyone who's willing to make a small donation to the National Military Family Association.
- Terms: 5, 10, 15 or 20-yr (Int. only 15-20yrs)
- Max Loan Size: $500,000
- Maximum LTV: 100% (80% Int. only)
How to Get a Navy Federal Home Equity Loan: Membership in Navy Federal is open to those with ties to the military, current or retired, as well as members of the Department of Defense and their families. As a national lender, Navy Federal operates across all 50 states, making it ideal for retired veterans and current service personnel alike.
Best No Closing Cost Home Equity Loan
We picked Discover as our best no-closing cost home equity lender, thanks to its competitive rates, straightforward product and national focus. Discover's home equity loans feature no origination fee, no application fee and, of course, no costs due at closing. It's also one of a select few lenders who operate out of almost every state in the nation, with the exception of Iowa, Maryland and Texas, making them one of the most accessible options around.
Highlights: While Discover's terms aren't fancy, they're easy to understand and competitive when compared to other national lenders. Discover offers a healthy range of loan terms, including 10, 12, 15, 20 and even 30-year home equity loans, distinguishing itself from the majority of competitors which tend to cap their terms at 15 years. As an online-only lender, Discover is also able to keep costs lower than many of its brick-and-mortar competitors; its home equity rates start at an aggressive 4.99% for well-qualified customers, which is significantly lower than the national average of 5.79%.
Drawbacks: While Discover competes nationally, the lender seems to cap its risk by limiting its permitted loan amounts to an unusually strict spread of $35,000 to $150,000. If your needs fall outside this range, you may be better off with a more flexible local lender like Regions Bank. Regions also offers no-closing-cost home equity loans, but permits loan amounts that allow you to borrow as much as $250,000 or as little as $10,000.
- Terms: 10, 12, 15, 20 or 30-yr
- Max Loan Size: $150,000
- Maximum LTV: 4.99% - 11.99%
How to Get a Discover Home Equity Loan: Discover offers home equity loans in 47 states, but does not offer them in Iowa, Maryland or Texas. If you're looking for an easy, no-fee home equity loan from Discover, click on the link above to get a quick quote today.
Best High-LTV Home Equity Loan
If you're looking cash out the maximum amount possible on your property, Pentagon Federal Credit Union (PenFed) is worth checking out. Whereas most lenders permit borrowers to take out home equity loans for up to 80% of their home value, PenFed allows borrowers to take out loans for LTVs of up to 90%. PenFed also underwrites home equity loans for balances of up to $400,000, one of the highest permitted loan balances we’ve seen among nationally accessible mortgage lenders.
Highlights: While we admit that Navy Federal's terms of up to 100% LTV and $500,000 in max loan balance exceed PenFed's best offer, we decided to select PenFed as our top choice due to its wider consumer appeal. Prospective borrowers can easily qualify for membership with PenFed by making a small donation to the National Military Families Association. By comparison, Navy Federal has stricter qualification requirements that exclude those who can't otherwise prove military affiliation.
Drawbacks: Aside from its above-average home LTV allowance, PenFed doesn't particularly excel in any category. Its rates are par for the industry, and it doesn't offer much in the way of rate discounts or relationship perks. While membership in PenFed will also give you access to its other financial products, like auto loans, credit cards and personal loans. Depending on where you live, a regional lender like TD Bank or PNC may offer more attractive terms.
- Terms: 5 to 20 years (5 to 12 on investment homes)
- Max Loan Size: $400,000
- Maximum LTV: 90%
How to Get a PenFed Home Equity Loan: PenFed lends in all 50 states, which makes it easy for interested applicants to apply online. To get started, click on the link above to navigate to their site. From there, eligible applicants can register to become members of the credit union. It's easy to qualify for membership by making a small donation to the National Military Family Association. Alternatively, members of the military, employees of the Department of Defense and their families are automatically eligible for membership in PenFed.
Best Bank for Home Equity Loans
PNC managed to snag the top spot as our best all-around bank for home equity loans. It offers one of the widest selections of loan terms, ranging from 5 to 30 years. This allows borrowers plenty of flexibility when it comes to picking their individual loan term and does so at some of the most competitive rates around.
Highlights: Fixed-rate home equity loans with PNC start at 4.89%. The bank also allows high-LTV balances of up to 90%, and also offers rate concessions if you set up automatic payments through a PNC checking account. This makes them an exceptional choice if you already bank with PNC.
Drawbacks: Like its local competitors, TD and Regions Bank, PNC is somewhat limited in its geographic focus. The bank also maintains a high minimum loan amount of $25,000, which exceeds the amount required by many other lenders who are willing to underwrite loan amounts of as little as $10,000. If PNC isn't the right bank for you, check with a lender who has a wider national presence like Citibank. Citi offers similar home equity terms to PNC but maintains a presence on both the east and west coasts.
- Terms: 5, 10, 15, 20, 25, 30-yrs
- Max Loan Size: $150,000
- Maximum LTV: 89.9%
How to Get a PNC Home Equity Loan: To apply for a home equity loan with PNC Bank, you'll need to live in one of the 19 states in which it operates. PNC branch locations are spread across the Midwest, South and pockets of the New England seaboard, including locations in Pennsylvania and New Jersey. Start your home equity rate quote by clicking our link above or by visiting your closest PNC branch.
Summary of Our Top Picks
For a quick comparison, we summarized the best companies for home equity loans below. We selected each provider based on a specific set of criteria, as explained in the methodology section. The lenders were selected from a collection of banks, credit unions and non-bank mortgage lenders.
|Home Improvement||TD Bank|
|Veterans||Navy Federal Credit Union|
|No Closing Costs||Discover|
|High LTV||Pentagon Federal Credit Union|
We evaluated over a dozen mortgage providers to find the best home equity loans for you. In our review of specific lenders, we considered the following criteria:
- Competitive APRs: Home equity loans are secured mortgage products that generally carry fixed rates, although exceptions do exist. Due to the security of the underlying real estate, home equity loans generally carry lower rates than comparable unsecured personal loans.
- Max/Min Permitted Loan Balance: Most lenders will set a cap on how much they will permit a homeowner to borrow to limit their risks. Simultaneously, lenders also have minimum borrowing requirements to make each loan worth their while. We compared each lender's permitted loan amounts to see where homeowners would have the most flexibility.
- Max LTV: Lenders calculate your LTV based on the amount you owe on your mortgage(s) relative to the home's appraised home value. Lenders set hard caps on the amount of equity you can withdraw on your home to mitigate their risks and the likelihood of a homeowner falling upside down on their home loans. We looked at how far each lender was willing to go in terms of permitted leverage ratios.
- Closing Costs and Fees: Many lenders charge appraisal fees. Other lenders charge prepayment penalties in addition to separate origination fees. We evaluated this factor based on the size and prevalence of incidental charges.
- Lender Accessibility: Many banks/credit unions do not allow non-customers to obtain home equity loans. Some lenders only focus on homes within the states that they operate in, while other online lenders and national banks lend in all 50 states. Depending on where you live, this can play a factor in whether you're able to access a home equity loan. We graded this factor based on both eligibility requirements and lender locations.
- Customer Satisfaction: We reviewed outstanding complaints filed under each lender through the Better Business Bureau as well as the reputation of the company itself. We also looked at any relationship discounts or outstanding features about a lender's offerings that distinguished them from the competition.
Where to Shop for a Home Equity Loan
Most national banks and credit unions who offer primary mortgage loans also typically offer home equity financing, however this may vary by lender. Many local and regional banks are also able to provide home equity loans to existing customers.
Home equity loans are a form of secured mortgage financing, which prevents them from being offered by many online lenders. Most of the market for home equity loans is dominated by big banks and regional lenders. Our selection of providers above does not encompass every home equity lender within the United States, but it can be used as a guide for comparison shopping.
Other useful places to shop include local bank branches and mortgage brokers who may specialize in specific types of home equity loans for condos, rental homes or even commercial property.
Even if you don't find the ideal lender among the choices we provided above, it's a good idea to inquire with local lenders to see if they don't have a home equity loan tailored towards your community. Often, local lenders can provide competitive terms and flexibility that larger national banks aren't willing to offer. When shopping for the best rates on a home equity loan, it pays to employ the same best practices you used when shopping for your original mortgage.