Although most home equity lenders let you tap up to 85% of your home’s value, some lenders may offer high-LTV home equity loans that allow you to borrow more. Use our home equity loan calculator to estimate your home equity borrowing power.
LOAN AMOUNT |
APR AS LOW AS |
|
$25,000 |
6.63% |
|
$50,000 |
6.63% |
|
$100,000 |
6.88% |
|
$150,000 |
6.88% |
1. Your credit score. The lower your credit score, the better your rate will usually be. Most lenders will allow a 620 minimum, but some set the bar even higher at 660 or 680.
2. Your debt-to-income (DTI) ratio. Your DTI ratio measures how heavy your monthly debt load is compared to your gross monthly income. Home equity lenders typically allow a maximum 43% DTI ratio, but the lower you can push this ratio, the better your rate offers will be.
3. Your loan-to-value (LTV) ratio. Your LTV ratio compares how much you’re borrowing to your home’s value. Lenders view a lower LTV ratio as less risk, so if you’re able to maintain more of your equity, they can offer you lower rates. Most lenders limit you to a maximum LTV of 85%, but there are some lenders who offer high-LTV home equity loans with LTVs of up to 100%.
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You can use the cash from a home equity loan to make home improvements, pay down high-interest debt or cover any other expense you choose. You’ll receive the funds all at once and make a fixed monthly payment.
There are a variety of different home equity loan lenders to choose from, and each of them set their own approval guidelines. Generally, the guidelines are a bit more strict than traditional mortgages, so you should strive to:
Can I get a home equity loan with bad credit?It’s possible to get a home equity loan with bad credit, but you may not qualify for as much equity as you need or want. Lenders may reduce your maximum LTV ratio and charge you a significantly higher interest rate. If your scores are below 620, consider a government-backed program like an FHA cash-out refinance or VA cash-out refinance.
| Lender | LendingTree rating and "best of" category | Available features | Lender review |
|---|---|---|---|
|  Low credit scores | 680 minimum credit score 90% LTV with higher score $45K minimum draw | Read our review |
|  High LTV ratios | 5- to 30-year terms No-closing-cost options 100% LTV for qualified borrowers | Read our review |
|  Online experience | 5- to 30-year terms $10K to $500K loan amounts 0.25% rate discount for eligible borrowers | Read our review |
| Rate and closing cost discounts | 5- to 30-year terms 0.50% rate discount for eligible borrowers No upfront fees | Read our review |
| Fast closings | 5- to 30-year terms $500K maximum loan amount 14-day closings possible | Read our review |
| Available home equity loan terms |
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| Home equity loan features |
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| LendingTree rating | Read review |
Rocket Mortgage offers a home equity loan for borrowers with credit scores as low as 680, though you’ll need at least a 760 score to borrow up to a 90% LTV. Rocket also offers the option to combine your first and second mortgage with a cash-out refinance.
| Available home equity loan terms |
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| Home equity loan features |
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| LendingTree rating | Read review |
Navy Federal Credit Union is the only lender we reviewed that allows qualified homeowners to borrow up to 100% of their home’s value. Military borrowers may be eligible for extra discounts and a streamlined approval process. Customer support can be contacted online, by phone or even on X (formerly Twitter). The website also provides a step-by-step guide to help you understand the timeline of your home equity loan.
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| Special home equity loan features |
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| LendingTree rating | Read review |
TD bank’s website is streamlined and easy to use, with a rate tool that customizes options based on your location. Terms range from five to 30 years and rate information is simple to find. TD Bank offers borrowers a 0.25% interest rate discount for its home equity loan products if you open a TD bank checking or savings account with automatic payment deductions. An added bonus: A TD Bank home equity loan can be secured by an investment property — most home equity lenders only allow you to borrow against your primary residence.
| Available home equity loan terms |
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| Special home equity loan features |
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| LendingTree rating | Read review |
BMO Harris offers the highest discounts on home equity loan rates of any lender we reviewed. They offer loans with terms that range from five to 20 years. You can check rates online, browse detailed information about loan programs and even watch mortgage-related videos on their website. There’s also an online application and a guide to help you through the process.
| Available home equity loan terms |
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| LendingTree rating | Read review |
Spring EQ is the only lender we reviewed that specializes exclusively in home equity loan products. You can also borrow up to 95% of your home’s value — much more than the max 85% LTV most lenders offer. Homeowners can convert equity to cash in as little as 14 days, although 21 days is the average, according to Spring EQ’s website.
Most home equity loans come with fixed interest rates, which means that you can enjoy consistent payments that won’t change over time. Because a home equity loan is paid out in a lump sum, you’ll not only pay the same interest rate each month but also the same amount in interest each month.
Yes, if the funds from the home equity loan are used for home improvements, you can deduct the interest from your taxable income.
Learn more about how to get your home equity loan tax deductible.
In order to get a home equity loan you’ll need to meet the following home equity loan requirements:
| DTI ratio | 43% maximum |
| Credit score | 620 minimum |
| LTV ratio | 85% maximum* |
*This is the standard LTV ratio maximum. However, some home equity lenders let you borrow up to 100% of your home’s value.
| Pros | Cons |
|---|---|
Lower interest rates: You’ll pay lower interest rates than you would with credit cards or personal loans Fixed payments: Your payment will be the same each month Tax implications: You may be able to deduct home equity loan interest from your tax bill Lower closing costs: Your closing costs are typically lower than a cash-out refinance Very flexible: You can use the money for any purpose | Second mortgage rates: You’ll pay a higher rate than with a HELOC or cash-out refinance Tougher guidelines: You’ll need higher scores and lower debt to qualify than you would with a cash-out refinance Reduced equity: You’ll lower the available equity in your home Another monthly payment: You’ll have two monthly house payments Collateral requirement: You could lose your home if you default on your payments |
Learn more about home equity loan pros and cons.
The easiest way to figure out how much you can borrow with a home equity loan is to let our home equity loan calculator do the math for you. You’ll just need three pieces of information:
Note: The results are based on a maximum 85% LTV ratio.
If your lender uses a different maximum LTV ratio, you may want to do the calculation by hand. Here’s how:
For example, let’s say your lender allows a 95% LTV ratio and you have a $400,000 home with a $90,000 mortgage balance. You’d multiply 0.95 by $400,000 to get $380,000. You’d then subtract $90,000 from $380,000 to arrive at your home equity loan amount of $290,000.
You can use home equity loans for just about anything, including:
Consumers sometimes confuse home equity loans with home equity lines of credit (HELOCs), but they work very differently. HELOCs almost always come with variable rates, and their rates are typically slightly lower than home equity loan rates.
| A home equity loan is best if: | A HELOC is best if: |
|---|---|
You want money in one lump sum | You want access to funds as needed |
You want a fixed interest rate | You’re OK with a variable rate |
You want a predictable monthly payment | You want to make payments only on the amount you use |
You need all the money immediately | You want the flexibility to access funds, pay them off and reuse them |
See current HELOC rates and top lenders today.
A cash-out refinance gives you access to cash by replacing your existing mortgage with a larger one. Because it’s a first mortgage you can access that cash at lower interest rates than you could with second mortgages, like HELOCs and home equity loans. A cash-out refi also has more lenient requirements overall than a home equity loan, however, making it easier to qualify for. For example, you could get an FHA cash-out refinance with a credit score as low as 500.
| A home equity loan is best if: | A cash-out refinance is best if: |
|---|---|
You want to leave your current, first mortgage alone | You can get a better interest rate on a new mortgage |
You want to save money on closing costs | Your credit scores are too low for a home equity |
Learn about cash-out refinance options.
If you prefer to leave your home equity alone, you may qualify for an unsecured personal loan. The rates are often higher than home equity products, but you won’t have to worry about the lender foreclosing on your home if you default on your payments.
| A home equity loan is best if: | A personal loan is best if: |
|---|---|
You want a lower rate | You don’t want to use your home as collateral |
You want a longer term | You don’t have enough equity to take out a home equity loan |
You want a lower payment | You need the money faster |
You need a higher loan amount | You need a lower loan amount |
See top lender personal loan rates today.
Although most home equity lenders let you tap up to 85% of your home’s value, some lenders may offer high-LTV home equity loans that allow you to borrow more. Use our home equity loan calculator to estimate your home equity borrowing power.
It may take two to four weeks to close on a home equity loan. You’ll usually receive your funds following a three-business-day waiting period after your closing.
Home equity loan rates are often higher than interest rates on traditional mortgages. Usually, the more you borrow, the higher your rate will be. Your credit score and loan term also have an impact on the rate you’re offered.
Yes, a home equity loan is often called a second mortgage, since it’s usually attached to a home already secured by a first mortgage. If you default on the loans secured by the home and go into foreclosure, the home equity loan will be second in line to be repaid.
To determine the best home equity loan lenders, we reviewed data collected from 35 lender reviews completed by the LendingTree editorial staff in 2023.
Each lender review gives a rating between zero and five stars, based on several factors including loan features and loan variety, digital application processes and the availability of product and lending information online. To be eligible for the “best of” home equity loan title, lenders must have a lender review rating of at least four stars. To be considered for our “best overall” pick, lenders must issue mortgages in at least 35 states.
We awarded extra points to lenders that:
Our editorial team brought together the data from our lender reviews, as well as the scores awarded for home equity-specific characteristics, to find the lenders with a product mix, information base and guidelines that best serve the needs of home equity loan borrowers.
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