Best HELOC Lenders of 2023
A home equity line of credit, or HELOC, allows people to tap into the equity they have in their home and use it to secure a revolving line of credit. This loan is collateralized by the property, and, unlike a home equity loan, the credit line is replenished each time you pay down the balance.
People may use HELOCs for things like consolidating high-interest debt, renovating their home or investing in a business venture. Under the right circumstances, a HELOC can be extremely helpful to people who are trying to achieve personal and financial goals.
No matter what type of mortgage or loan product you’re considering, it’s always a good idea to research and compare lenders. Below is a list of HELOC lenders we think you should consider and why. But before we get to that, remember that although the information in this article was accurate when it was written, loan terms and lender policies change regularly. Check with each individual lender before making the decision to borrow.
Table of Contents:
Best for Quick Approvals: Figure
Best Fixed-Rate HELOC: Truist
Best for US Bank Clients: US Bank
Best for Smaller HELOCs: Citizens Bank
Best for Higher LTVs: Navy Federal
Best for Large Helocs: Flagstar
Best for Owner-Occupied Multifamily Properties: BMO Harris
Best HELOC Lenders Reviews
Why we chose this company: Figure stands out because of its short approval timeline and its 100% online application process. Their website offers a great deal of information and FAQs to help you make an informed decision about their HELOC products.
Figure’s website says that the application process takes less than five minutes and you can have a near-immediate decision on whether you’re approved. Once approved, you can receive funding within five days. The process is 100% remote and includes the use of an eNotary to close your loan.
- Application-to-closing can be done virtually
- Can redraw 100% of your original loan amount
- Application takes 5 minutes or less
- Loans are typically funded within 5 days.
- Only accepts ACH payments
- Maxes out at $400,000 per borrower and $400,000 per property
- You’ll pay 0.25% more if you don’t enroll in autopay
APR | As low as 4.24% |
Loan amounts | $15,000 to $400,000 |
Terms | 5, 10, 15 and 30 years. |
Approval time | 5 minutes or less |
Why we chose this company: Truist’s HELOC product is a pretty standard offering. The most notable feature, however, is the flexible repayment option. You can choose the payment plan that works best for you: variable, interest-only or fixed-rate.
The fixed-rate/fixed-term repayment option allows you to repay your HELOC over 60, 120, 180 or 240 months, which is ideal if you want a set, predictable monthly repayment amount over the life of your loan.
Another benefit of Truist’s HELOC is that you can use a vacation home or a second home as collateral. Investment properties, however, are not allowed.
- No closing cost option
- Application takes 5 minutes or less
- Three options for repayment
- If you close your loan account before three years, you’ll have to reimburse closing costs
- Cannot use investment property as collateral
- Not all terms and available in all states
APR | As low as 7.05% for those with excellent credit |
Loan amounts | $10,000 to $500,000 |
Terms | 10-year draw period and 20-year repayment |
Approval time | 15-minute application process; loans close in 30-35 days on average |
Why we chose this company: US Bank’s HELOC product also offers a fixed-rate option along with a discount for autopay. In most states, a US Bank personal checking account is required to receive the lowest rate, but is not required for loan approval.
The $90 annual fee is also waived if you’ve got a US Bank Platinum Checking Package. So if you are looking to get the lowest rate possible on your loan, it helps to have an existing relationship with US Bank.
- Application can be done online, in-person or over the phone
- Option to convert all or a portion of your balance to the fixed rate option
- No upfront costs for fees
- Processing time can be longer for complex situations
- Higher interest rates may apply for loan amounts under $100,000
- You’ll pay 0.50% more in interest if you don’t use autopay
APR | 5.70% to 10.10% APR |
Loan amounts | $15,000 or up to $750,000 (up to $1 million for properties in California) |
Terms | Draw period of up to 10 years |
Approval time | Varies based on your circumstances |
Regardless of whether you already have a relationship with US Bank, there are a few ways to get the best rate possible. For instance, if you’ve got a higher credit score and are willing to cover your monthly payment with autopay, you can get better HELOC terms.
Why we chose this company: Citizens Bank offers a smaller HELOC option for those who don’t have as much equity in their home and don’t need more than $25,000.Their GoalBuilder home equity line of credit (HELOC) is a more affordable borrowing option than most credit cards or a personal loan.
Although Citizens Bank offers a regular, larger HELOC option, we are going to focus our review on the GoalBuilder product, as many of the terms are the same or very similar. We also like this smaller HELOC option because it’s low on fees, which makes it ideal for newer borrowers.
- No application fees or closing costs, annual fee or prepayment penalties
- Don’t need a lot of equity in your home to qualify
- May offer a path to a larger HELOC with Citizens down the line
- HELOC is only offered in 14 states and Washington D.C.
- Interest rate is slightly higher than other HELOC products
- The property securing the loan cannot have been listed for sale within the past 90 days
APR | Prime +3.25% (3% for Autopay) |
Loan amounts | $5,000-$25,000 for GoalBuilder HELOC |
Terms | 10-year draw period and 15-year repayment |
Approval time | Not disclosed |
Why we chose this company: Navy Federal is a credit union that offers a HELOC with a borrowing limit of up to 95% of the loan-to-value (or LTV). For instance, if you’ve got $100,000 of equity in your home, your credit limit could be up to $95,000.
Navy Federal is a credit union for those who have served in the armed forces. But there are other ways you can become a member, such as having an immediate family member who’s served, being a DoD contractor, living with a Navy Federal member and more.
We like Navy Federal’s HELOC because of the low fees, longer draw and repayment period along with the ability to access funds through the Visa Home Equity Line Platinum Card. The only downside we noticed was the estimated wait times for processing: 17-19 days for initial contact once your application is submitted and up to 90 days to close on your HELOC!
- No application, origination, annual or inactivity fee
- Up to 95% LTV
- 20-year draw & 20-year repayment
- Not everyone qualifies for Navy Federal membership
- Processing times are currently estimated to take 75 to 90 calendar days to close
- Closing costs can start at $300 and go up to $2,500 or more
- Loans less than $25,000 require a 1.00% increase in APR
APR | Start at 5.75% |
Loan amounts | $10,000-$500,000 |
Terms | 20-year draw period and 20-year repayment |
Approval time | Not disclosed |
Why we chose this company: Flagstar offers HELOCS of up to $1 million, making it an ideal option for large HELOC loans. Interest rates start at 5.74%, but you’ll get a 0.50% interest rate discount for setting up autopay from a Flagstar deposit account. There are no closing costs so long as your account remains open for 36 months. The $75 annual fee is waived for the first year.
- Can borrow up to $1 million
- No closing costs
- 1 to 4-unit properties, and modular homes are eligible
- $75 annual fee after first year
- Not available in Texas
APR | 5.49% - 21.00% |
Loan amounts | $10,000 - $1,000,000 |
Terms | 10-year draw period and 20-year repayment |
Approval time | Not disclosed |
Why we chose this company: BMO Harris offers a HELOC with pretty standard terms, but one feature stands out: BMO Harris will pay closing costs for loans secured by an owner-occupied property up to four units.
Closing costs include appraisal charges, credit report(s), flood determination, title insurance, document recording fees, and mortgageå and government taxes. Some fees might be higher with a multi-family property, so a loan that covers these costs could be helpful. The only catch is that the property must also be owner-occupied since the bank doesn’t offer HELOCs on investment properties.
- APR will never exceed 18% or the maximum permitted by your state
- Fixed-rate option
- 5,10,15, 20, and 30-year repayment terms are available
- Online rates are only AZ, FL, IL, IN, KS, MN, MO and WI. All others must call for rates
- Not all transactions are eligible for remote closing
- No HELOCs for investment properties or second homes
APR | 5.69% to 7.64% APR |
Loan amounts | Not disclosed |
Terms | 5,10,15, 20 or 30-year repayment term |
Approval time | Not disclosed |
Other companies we considered
We also took a look at other banks that offered comparable HELOC products. They didn’t make our list as one of the best HELOCs, but here are some quick facts to peruse in case you’re considering one or more of these lenders.
PNC
- Offers HELOC and fixed and variable rate options
- Minimum draw amount in Texas is $4,000
- $150 cash for applications received before August 31, 2022
- $100 transfer fee each time borrowers opt for a fixed rate
- In Texas, only applicants with primary residences and LTVs under 80% are eligible
PenFed
- Borrow up to $1,000,000
- Annual fee waived if you pay $99 in interest over 12 months
- Most closing costs are covered
- Does not offer lines of credit for certain types of properties
- Properties must be livable and pass inspection
Bank of America
- No fees for converting a variable rate loan to a fixed rate
- Up to 1.50% rate discount for initial withdrawals (0.10% for every $10,000)
- Can’t open more than three fixed-rate loans at the same time
- Maximum APR is not disclosed
Discover
- No origination, appraisal or application fees or mortgage taxes due at closing
- CT, MN, NC, NY, OK and TX residents are exempt from early payment penalties
- Only offers a home equity loan product, not HELOC
- Prepayment penalty of up to $500 applicable for 36 months after closing
- No information on available discounts
HELOC Lenders FAQ
When this article was written, the average rate for HELOCs was between around 5.75% and 6% at the moment. You should check lender websites for the most up-to-date rate info. Your HELOC rate will depend on many factors, including your creditworthiness, loan amount, lien position, the amount of equity in your property and whether you make your monthly payment with an autopay deduction.
A $150,000 line of credit with a $50,000 balance would require a $341 minimum payment on a 7.250% variable APR HELOC with a 30-year term. On an interest-only HELOC, typical minimum monthly payments are usually 100% of the interest owed for the period.
Some banks will lend up to $1,000,000 on a HELOC. In some cases, you may be able to borrow more.
A HELOC allows you to borrow against the equity in your home. You can use this equity to secure a line of credit and, as with a credit card, make payments only on the actual balance you carry.
A HELOC is a line of credit and, unlike most mortgages, typically has a variable interest rate. As with a credit card, you only make payments on the amount of credit you are using. If you have a $50,000 line of credit but only have a $10,000 balance, that’s the amount you’ll make minimum payments on.
Most banks allow you to apply for a HELOC online, in-person or by phone.
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This story was originally published August 17, 2022 at 9:28 AM.