5 Best Home Equity Loans of 2023


If you own your home, there’s a good chance you currently have equity in the property. What does that mean? Essentially, it means that your house is worth more than you owe on it through your mortgage. With real estate prices rising across the country, it’s very likely your home has increased in value if it’s been at least a couple of years since you bought it.

Having equity in your home can be a helpful financial tool to have in your belt. You can tap into your home equity and take cash out to pay for other expenses. There are two ways to do this: either through a home equity line of credit or a home equity loan.

Each one performs a bit differently, so the best choice depends on your specific needs. We’ll briefly explain each type of home equity financing, then present five of the best online home equity lenders.

What are the best home equity loans and HELOCs?

There are many home equity loans and HELOCs out there, and some are better than others. We’ve narrowed the field to the top five lenders: Figure, LendingTree, PenFed, Bank of America, and U.S. Bank. Now find out why.


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Where they’re nailing it:

  • You can get approved in five minutes and get your home equity loan funded in just five days.
  • Home equity loans go as high as $100,000.
  • There’s no appraisal fee.
  • The minimum credit score is 620, which is in the “fair” range.

Where they could improve on:

  • Currently, Figure home equity loans are available in just 33 states, but more areas are being added soon.
  • Origination fee ranges between 0% and 3%. Always compare loan offers to make sure the overall cost of the loan is as low as possible.


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LendingTree is a matching service that pairs borrowers with multiple lenders. Fill out a single online application with them, and you are instantly connected with multiple lenders all vying for your business.

That competition means you can instantly see who is going to give you the best home equity loan. You don’t have to scour the internet. That’s already been done. You don’t have to research the pros and cons of each loan and lender — that, too, has already been done.

Here’s what else we like about LendingTree.

Why it’s number one:

  • Great APR quotes.
  • Their customer service is like having an infinitely patient, well-educated older brother or sister guiding you to make good decisions.
  • Huge time saver. One application and you’re done.
  • Everything is disclosed in plain view, and easy to understand.
  • Their website is second to none.

What they can do to stay at the top:

  • The phone calls can be a bit much from banks trying to get your business. A ‘do not call’ option on your account would be great.


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What’s working well:

  • You can qualify for a HELOC with as little as 90% LTV.
  • Credit lines can reach as high as $400,000 depending on the value of your property.
  • Minimum HELOC amount is just $10,000 so you have flexibility in the amount of equity you need.
  • Most closing costs are paid by PenFed.

Where there’s room for growth:

  • You are responsible for the appraisal fee regardless of whether the loan closes.
  • You’re required to reimburse PenFed for the closing costs they pay if you pay off the loan within two years.

Bank of America

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What they’re doing right:

  • With over 5,000 branches (and counting) across the United States, finding a knowledgeable person to talk to is a breeze.
  • Rather talk online? B of A’s online chat service is actually handled by real live people — not algorithms spitting out planned responses after noticing a few keywords.
  • Low APR quotes. 2.99% for the first 12 months — and it’s only a three-year loan.
  • That’s right: a three-year loan term. (Most are five!) While your monthly payment will be higher, you’ll save more money over time with a shorter term.
  • They clearly outline and disclose all fees and terms of the home equity loan. In fact, it’s one of the most transparent companies you’ll find anywhere.

Where they can improve:

  • Despite their availability, customers across the board only give them an average rating on customer service.
  • Their rate generator will not allow you to change the repayment period, which is unusual in the industry.

U.S. Bank

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Where they shine:

  • Low interest rates (fixed rates can be as low as 2.5%).
  • Strong customer service reviews across the board, and the option to chat online.
  • They are very transparent about every fee and term that goes along with the home equity loan. It’s right there right in the open.
  • No early closing fees.

Where they need some elbow grease:

  • Website is a little barren. If you’re new to the process, don’t expect U.S. Bank to take the time to help you understand.

What is home equity?

Home equity is the amount of the house that you own. If your initial home loan was for $200,000, and it’s now down to $180,000, then you have $20,000 in home equity built up.

Another way to determine your home equity?

If that same house is now assessed to be worth more than $200,000, then your equity will be the tax assessment minus the amount you still owe on the loan.

What is a home equity line of credit?

Home equity loans and home equity lines of credit (HELOCs) use the equity you’ve built up as collateral for a new loan. So, if you stop making monthly payments on the home equity loan, the lender will take possession.

Home equity loans are often taken out to pay for big expenses medical bills, college tuition, or home repairs.

Typically, you can only borrow 85% of the equity in your home if you choose this route. So, if you have $20,000 in home equity, the maximum loan amount you could take out would be $17,000.

Home Equity Loan vs. HELOC

It is important to understand the differences between HELOCs and home equity loans before you start applying.

With a home equity loan, you get the money all at once in a one-time installment, so the loan amount is a defined, fixed amount. It differs from a HELOC, which provides borrowers with a revolving line of credit, similar to a credit card.

Home equity loan rates are generally lower than credit cards or other types of unsecured debt. This is because your home acts as collateral. Home equity loan terms vary depending on the lender and usually last between three and five years. In some extreme circumstances, however, loan terms can last as long as thirty years (yikes!).

Adjustable-Rate vs. Fixed Rate

With a HELOC, your borrowed funds are subject to an adjustable interest rate. In contrast, a home equity loan typically has a fixed interest rate. That makes your monthly payments more dependable.

Another key difference is the way in which you receive your loan funds. With a HELOC, you draw on your account as you need funds. However, with a home equity loan, you get a lump sum all at once. Finally, HELOCs also have a draw period sometimes where you are allowed you to make interest-only payments for a certain period of time.

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