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Best HELOC Lenders

Find the best HELOC for you. Get matched with an Authorized Partner.

Find the best HELOC for you. Get matched with an Authorized Partner.

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    Many homes have increased in value, which has helped homeowners build equity. A home equity line of credit (HELOC) is a low-cost option for borrowers to access their home equity without refinancing their existing mortgage.

    However, finding the best HELOC lenders to match your needs can be a challenge. Read our list of the best lenders for home equity lines of credit to help you find one.

    We selected our top picks for HELOC lenders based on factors including rates, maximum combined loan-to-value (LTV) ratios, repayment periods and credit score requirements. Our picks may be Authorized Partners who compensate us. This does not affect our recommendations or evaluations but may impact the order in which companies appear.

    Why trust ConsumerAffairs?
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    Compare our top 5 choices for best HELOC lenders

    CrossCountry MortgageCrossCountry MortgageFSB MortgageFSB MortgageHSBC MortgageHSBC MortgageNew American FundingNew American FundingLendingTreeLendingTree
    RatingPendingPending4.14.63.5
    # of reviews004328281,557
    Our pick for Large loan amounts Small loan amounts Long draw period Low starting APR Low closing costs
    Minimum credit score 620 660 620 620 Varies
    Maximum combined LTV ratio 95% 100% 80% 90% 85%
    Repayment period 240 months 240 months 240 months 240 months 180 - 240 months
    Read reviews Read reviews Read reviews Read reviews Read reviews
    All information accurate as of time of publication.

    More info on our top 5 choices for best HELOC lenders

    Our research team compared more than 30 popular lenders to find our top five picks based on consumer reviews, interest rates, fees, loan amounts and other features. The best HELOC lenders have high LTV limits, long repayment periods, competitive annual percentage rates and low fees and are available nationwide.

    Our choice for large loan amounts

    CrossCountry Mortgage

    0 reviews
    Minimum credit score
    620
    Maximum credit line amount
    $500,000
    Repayment period
    240 months

    Established in 2003, CrossCountry Mortgage is a nationwide, full-service lender. It offers HELOC loans in all 50 states, and customers can request a free rate quote or apply online.

    CrossCountry Mortgage does not publish a lot of its specific HELOC details online; instead, it gives general information about what HELOCs are and the average fees to expect. You will need to submit a rate request or talk with a loan officer to receive information about how much home equity you can draw from and what rate you can receive with your credit.

    If you need access to a large amount of your equity, CrossCountry offers HELOCs with a maximum credit limit of $500,000. You should expect an origination fee of 2% as well as other closing costs.

    • Large maximum credit line amount
    • Lends in all 50 states
    • Some requirements not published

    There are no reviews of CrossCountry Mortgage from ConsumerAffairs readers.

    Our choice for small loan amounts

    FSB Mortgage

    0 reviews
    Minimum credit score
    660
    Maximum credit line amount
    $250,000
    Repayment period
    240 months

    FSB Mortgage is the nationwide lending arm of First Savings Bank, a regional bank based in Indiana. It offers a suite of mortgage lending products, including conventional and government-backed loans, as well as HELOCs. Customers can easily apply online for a loan through FSB Mortgage, then complete the process with an assigned loan officer.

    FSB Mortgage allows LTV ratios up to 100%, so even borrowers with a small amount of equity can get approved for a HELOC. Borrowers with heavier debt loads (DTI ratio up to 45%) can also apply for a HELOC through FSB Mortgage.

    Closing times with FSB Mortgage average about 45 days, and the draw period is 120 months. Closing costs include an origination fee of $1,495, as well as a variable title fee. You cannot check your rate online, but there is an online application. HELOCs with FSB Mortgage are available to borrowers in all states except Alaska, Hawaii and Texas.

    • Credit limits up to $250,000
    • LTV ratios up to 100%
    • DTI ratios up to 45%, based on credit score
    • Does not provide interest rates on website
    • No stand-alone HELOC product

    There are no reviews of FSB Mortgage from ConsumerAffairs readers.

    Our choice for long draw period

    HSBC Mortgage

    4.1
    432 reviews
    Minimum credit score
    620
    Maximum credit line amount
    $500,000
    Repayment period
    240 months

    HSBC offers HELOCs up to $500,000. HSBC publishes its updated HELOC rates on its site, and APRs vary by state and creditworthiness. Customers can get a rate discount of 0.25% when they make an initial draw of $25,000 or more at closing and 0.25% when they sign up for autopay through an HSBC Premier checking account.

    Customers can choose a fixed rate during their draw period, with terms between five and 20 years. In order to qualify for a HELOC with HSBC, customers must have an existing relationship with the bank, either by having $75,000 or more in total deposits or investments held with HSBC, $5,000 or more in monthly direct deposits to an HSBC account or a current residential mortgage with an original financing amount of $500,000 or more.

    Customers can expect no application fees or annual fees. HSBC will also cover the closing costs of HELOCs of $250,000 or less. Otherwise, closing costs with this company range from $270 to $19,900, depending on your location and the amount of your line of credit. However, there is an expectation to keep your HELOC open for three years — or else you’ll need to pay a $500 fee ($750 fee for California and Virginia residents).

    • High credit limits
    • No closing costs for credit lines of $250,000 or less
    • Early termination fee
    • Must have established relationship with the bank to qualify

    Although readers have had positive experiences with HSBC, more recent reviews indicate some difficulties working with the company.

    Our choice for low starting APR

    New American Funding

    4.6
    828 reviews
    Minimum credit score
    620
    Maximum credit line amount
    $500,000
    Repayment period
    240 months

    Picking a lender that offers a low introductory APR on your HELOC is key to reducing your borrowing costs. New American Funding is our choice for a low starting APR, with rates as low as 3.53%; this is substantially lower than the standard rates offered by other lenders.

    Borrowers can start their application online and work with a loan officer to set up their HELOC. HELOCs typically take about two to three weeks to close, and you’ll have a 120-month draw period.

    Additionally, this lender offers conventional, jumbo and government-backed mortgages for buying or refinancing your home. Loans are available to borrowers in 49 states (not available in Hawaii).

    • High maximum credit line amount and combined LTV ratio
    • Minimum credit score of 620
    • Debt-to-income (DTI) ratios as high as 45%
    • Does not provide interest rate or fee information on its website
    • Hard credit check
    • No rate discounts available

    The majority of reviews compliment New American Funding team members for their dedication and hard work. Most reviewers are happy with the lender's services and give favorable ratings. Some of the negative reviews mention being shuffled around when employees have left the company and having to resubmit documents that were given to the previous loan officer.

    A ConsumerAffairs reviewer from Florida praised her loan officer, saying her "dedication, hard work, patience and expertise made our entire loan process run so smoothly. Tania not only took the time to make our entire loan process easy to understand, she broke it all down line by line to make perfect sense, financially."

    Our choice for low closing costs

    LendingTree

    3.5
    1,557 reviews
    Minimum credit score
    Varies
    Maximum credit line amount
    Varies based on lender
    Repayment period
    180 - 240 months

    LendingTree is an online marketplace that enables customers to compare offers from multiple lenders at once. While it is not a direct lender, it has relationships with mortgage companies, credit unions, banks and lenders that offer a variety of loan types. Loan types include mortgages, refinances, HELOCs, home equity loans, credit cards and more. To receive personalized HELOC rates from its lending partners, provide your home address and current loan balance. 

    Searching for HELOCs with low closing costs through LendingTree is ideal because you'll receive multiple quotes with rates, fees and other details with just one application.

    • Quick and easy application process
    • Compare multiple lenders with one application
    • Transparent details for rates, fees and other factors
    • Must provide Social Security number to get personalized quotes
    • Entering your personal information can lead to spam

    Many reviewers report positive experiences once they choose a lender and helpful LendingTree customer service representatives. They also appreciate how easy it is to compare lenders in one place. A reviewer from Brooklyn, New York, said: “I found the right mortgage lender using LendingTree. I will go to them in the future before I search for a company on my own. Perfect place to shop, compare rates and speak to potential Lenders. Both were legit with excellent ratings. Two out of the three companies contacted me within hours … to start the preapproval process. Great company.”

    However, multiple reviewers report being inundated with calls from lenders after submitting an application. For reviewers who weren't ready to apply right away, these phone calls made the process less pleasant.

    Compare HELOC lender reviews

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    Find the best HELOC for you. Get matched with an Authorized Partner.

      What is a HELOC?

      A HELOC is a type of financing that lets a homeowner borrow funds based on their home equity. With a HELOC, you can borrow money up to a credit limit and pay back your balance over a number of years. It is a second mortgage, meaning it doesn’t replace your primary mortgage (like a refinance does).

      How does a HELOC work?

      A HELOC is similar to a credit card in that it’s a revolving line of credit, which means you can make withdrawals up to a specified credit limit repeatedly, pay off the debt as you go and then withdraw funds again as needed. However, there is a limit to how long you can borrow using a HELOC.

      A HELOC has two phases: the draw period and the repayment period. During the draw period (typically from five to 10 years), you can withdraw money up to the credit limit. Like with a credit card, you’re expected to make minimum monthly payments during the draw period, though these payments are often interest-only and don’t go toward the principal.

      After the draw period closes, you’ll enter the repayment period, during which you make principal and interest payments until the balance is paid off. Repayment periods are often longer than draw periods, so a 10-year draw period could have a 20-year repayment period.

      The credit limit is calculated as a percentage of the home’s appraised value minus the combined total of any principal loan balance securing the home. Most lenders typically set the percentage (called a combined loan-to-value ratio, or CLTV ratio) between 60% and 85%.

      Here’s how it works: Say your home has a current appraisal value of $250,000. The outstanding balance on your mortgage loan is $160,000. If you obtain an 80% CLTV HELOC, you may be able to borrow 80% of $250,000, minus the $160,000 you still owe on your mortgage. Your potential credit limit may equal $40,000.

      A HELOC and a home equity loan are similar in that they both draw funds from the equity in a property. However, they differ in how and when these funds are disbursed. With a home equity loan, the funds are distributed as a lump sum of cash upfront. Home equity loans generally come in handy for situations where the borrower has, for example, an accurate cost estimate for a project. With a HELOC, you can access funds as needed during the draw period.

      How to choose a HELOC lender

      As with any borrowing decision, it’s a good idea to read customer reviews and gather quotes from multiple lenders before you make your decision. Some lenders may discount upfront fees; others may offer lower rates. You’ll want to consider the overall cost of the HELOC, including all fees and charges.

      You can use these points to compare lenders:

      Type of interest rate offered
      A HELOC may have a variable rate, a fixed rate or a combination of both (e.g., a variable rate that converts to a fixed rate after a certain period of time). Variable rates could be lower than fixed rates, but they also have the potential to rise in the future. A variable rate may save you money in the short term, while a fixed rate may offer more predictable payments over time.
      Introductory rate
      HELOC lenders may offer a low introductory rate to entice you. You could find a HELOC with a 1.99% rate for the first 12 months, followed by a rate increase. Consider how long you’ll need access to funds and when you can repay. You may be able to save money using a HELOC with a low introductory rate if you can pay back the principal before the rate expires. Some lenders also offer rate discounts if you make an initial withdrawal of at least a certain amount.
      Interest rate cap
      This cap limits how much your interest rate can rise during a given time frame. Lenders should disclose both periodic adjustment caps (how much the rate can increase from one adjustment period to another) and lifetime caps (how much the interest rate can increase over the life of the HELOC).
      Fees and charges
      Fees vary based on the lender (e.g., an annual fee, an inactivity fee or an early termination fee). Compare these fees based on how you plan to use the HELOC. You can also expect to pay some closing costs. Some lenders offer no-closing-cost HELOCs, but there are conditions you must meet (like keeping the credit line open for a certain amount of time) in order to take advantage of the savings.

      Applying for a HELOC

      The application process for a HELOC is similar to the mortgage loan application process, though it may not require as much personal and financial information. You’ll need to answer questions about your current income, assets and debt. The lender will likely request proof of income and other documentation, like a W-2 and bank statements. A low DTI ratio is also ideal. Each lender may set a different DTI cap, but most look for a DTI ratio of 43% or lower.

      You’ll want to also make sure you have at least 15% to 20% equity in your home based on the current appraised value, as well as a good credit score. Most lenders also look for a credit score of 680 or higher to qualify for a HELOC.

      If you get a HELOC from a lender that’s not your current mortgage lender, you may need to show proof of payment history. Lenders need to see that you can manage your existing debt effectively. The lender will then use all of this information to determine if you qualify for a HELOC. It will also use this information to determine your credit limit and interest rate.

      Other factors to consider before getting a HELOC

      There are also a few things you’ll want to do before you apply for a HELOC:

      Determine the purpose and timeline for the HELOC.
      It’s important to have a goal and purpose in mind for how you’ll use the HELOC. For example, if you plan to renovate your home, you’ll want to estimate costs and develop a timeline for the project before you apply. This can help you decide how long of a draw period you’ll need.
      Know your numbers.
      It’s a good idea to assess your financial situation ahead of time so you can find the right HELOC for you. Lenders generally use your credit score, DTI ratio and equity value to determine your eligibility. Check your credit report for any inaccuracies, and request your credit score. You can find the estimated market value of your home on a real estate site (though your home may end up appraising for less than what is shown online). Your equity is equal to the appraised value of the home minus your current mortgage balance.
      Research HELOC lenders to gather rate and fee information.
      Most lenders disclose the starting rates and fees for HELOCs directly on their websites. You can also use online calculators to estimate your payment.
      Complete an application.
      When you’ve found a lender that offers a HELOC that suits your needs, you can complete an application. Be prepared to input your income, asset and debt information. The lender will also require a home appraisal.
      Borrow only what you need and make regular monthly payments.
      Once you get a HELOC, ensure that you withdraw only what you need and can afford to repay. It’s also important to make on-time payments, as your payment history is reported to the credit bureaus and will ultimately affect your credit score.

      HELOC alternatives

      If you want to use your equity without taking out a line of credit, you might consider other loan and refinancing options. Home equity loans, cash-out refinances and reverse mortgages all allow borrowers to use their equity for a variety of purposes.

      Home equity loan

      A home equity loan lets you borrow against the equity you have in your home. Home equity loans are typically disbursed in a single payment and are generally repaid with fixed monthly payments.

      Cash-out refinance

      A cash-out refinance is a type of refinancing that lets you convert some of your equity into cash. It involves taking out a new mortgage loan larger than your existing balance, paying off your old mortgage loan and keeping the balance in cash. Generally, you can choose between adjustable- and fixed-rate options.

      Reverse mortgage

      A reverse mortgage is generally for individuals 62 and older. It lets homeowners borrow against the equity in their homes. The lender makes a lump sum or regular payments to the homeowner or provides a line of credit, and the loan doesn’t need to be repaid until after the borrower dies or moves out of the house.

      FAQ

      What is equity in a home?

      Equity is the difference between your home’s appraised value and your outstanding mortgage balance. It reflects your ownership stake in the property.

      What is negative equity?

      Negative equity can occur when your home’s appraised value is less than the outstanding mortgage balance you owe. With negative equity, you owe more on your home than it’s worth.

      How do I get a HELOC?

      You can usually apply for a HELOC online through a lender’s website. Once you complete an application, the lender will pull your credit report and ask for proof of income to get the process started. The lender may also request a home appraisal before determining whether you qualify and how much you can borrow.

      What can I use my HELOC for?

      You can use a HELOC for a variety of purposes, like consolidating credit card debt, making home improvements, paying for education, covering medical bills, funding a special event or nearly anything else.

      Is a HELOC a good idea?

      A HELOC could be a good idea if you have equity in your home and need to finance a large project. You should evaluate the pros and cons carefully before you make a borrowing decision.

      Does a HELOC affect your credit score?

      A HELOC’s effects on your credit score depend on whether you make payments on time and how you use the funds. If you use the money to pay off credit card balances, your credit utilization ratio will improve, which could raise your score.

      Methodology

      To make our choices for the top HELOC lenders, we collected 15 individual data points from 31 mortgage lenders, including over 14,000 customer reviews and overall ratings from ConsumerAffairs readers submitted between 2019 and 2022. We then used this data to examine the factors that have the most impact on borrowers:

      • Minimum credit score: We considered this for all lenders, but there wasn’t much variation among lenders to make it a dominant factor in our choices.
      • Maximum loan amount and maximum LTV ratio: We gave higher consideration to lenders that allow a higher LTV ratio (most common is 80%) and higher loan amounts.
      • APR: We looked for lenders that have starting APRs below 10%. However, market conditions fluctuate rapidly, so less emphasis was placed on this when making our choices.
      • Repayment period: We examined payment term ranges and noted which lenders offer repayment periods of 120 months or longer.
      • Availability: We reviewed if borrowers in all states could get a HELOC with the lender, and those with nationwide availability were given more consideration — particularly if they have an online application process.
      • Closing costs and other fees: We considered lenders that have closing costs ranging from 2% to 5%, as well as rate discounts and low origination fees.

      All of our top picks offer comparable starting APRs, allow high LTV ratios and offer long draw periods, long repayment periods and low closing costs and fees. They also have other features, such as online applications, nationwide availability and high maximum loan amounts.

      Since customer feedback is a critical indicator when evaluating companies, this was an important consideration when selecting our top picks. However, for those companies on our list with no ratings on ConsumerAffairs, there were other variables that made them stand out as good options for HELOCs, and we factored those into our decisions.

      Not sure how to choose?

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        Guide sources
        ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
        1. Experian, “ What Is a Draw Period on a HELOC? ” Accessed Aug. 2, 2022.
        2. Consumer Financial Protection Bureau (CFPB), “ What you should know about home equity lines of credit .” Accessed Aug. 3, 2022.
        3. Insider, “ The average HELOC interest rate by loan type, credit score, and state .” Accessed Aug. 2, 2022.
        4. LendingTree, “ Average Credit Card Interest Rate in America Today .” Accessed Aug. 2, 2022.
        5. Experian, “ How Does a HELOC Affect Your Credit Score? ” Accessed Aug. 4, 2022.
        6. Experian, “ What Credit Score Do I Need to Get a Home Equity Loan? ” Accessed Aug. 3, 2022.
        7. Consumer Financial Protection Bureau (CFPB), “ 1026.40 Requirements for home equity plans .” Accessed Aug. 3, 2022.

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