Home equity loans are a mighty money tool for extracting some of your home’s value as cash. Typical uses include home renovations, paying off high-interest credit cards, or debt consolidation.
No matter how you plan to use it, with a fixed interest rate, a HEL is easier to budget for than variable-rate equity products.
Yahoo Finance has run side-by-side comparisons of leading home equity providers. We narrowed them down to the lenders with superior loan options and service standards to determine the best home equity loan lenders of March 2025.
The Yahoo view: Better Mortgage specializes in fast closings and allows large home equity loans, taking our Best Overall honors.
Stars: 4.00
Read our full Better Mortgage review
Key benefits
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Better says it can close on home equity loans in only three days, with loan proceeds available as quickly as one week.
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Allows home equity loans up to $500,000 with a combined loan-to-value ratio of 90%.
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Doesn’t charge an annual fee.
Need to know
Dig deeper: What is combined loan-to-value ratio (CLTV), and why should homeowners care?
The Yahoo view: With a solid reputation for customer service, NFCU is a go-to home equity lender for borrowers with a military connection.
Stars: 4.20
Read our full Navy Federal Credit Union mortgage review
Key benefits
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The lender ranks above average for customer satisfaction in the latest J.D. Power survey of home loan originators and has the highest score in the J.D. Power survey of mortgage servicers.
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NFCU pays all closing costs on home equity loans, including third-party fees.
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Allows up to a 100% combined loan-to-value ratio, which includes your first mortgage.
Need to know
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Membership is available only to active-duty military, veterans, military civilian and contractor personnel, and their families.
The Yahoo view: Fifth Third Bank offers the flexibility of HELs from $10,000 to $500,000 — and, best of all, charges no fees.
Stars: 3.60
Read our full Fifth Third Bank mortgage review
Key benefits
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There are no application fees or annual charges, and zero closing costs.
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Offers repayment terms of up to 30 years.
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Automatic payments from an eligible Fifth Third checking account earn a quarter-point rate discount.
Need to know
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Home equity products are only available in Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, South Carolina, Tennessee, and West Virginia.
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It wouldn’t reveal a minimum qualifying credit score to Yahoo Finance, but a disclaimer on the Fifth Third website shows home equity loan rates based on a FICO 750.
The Yahoo view: New American Funding is a full-service mortgage lender that caters to underserved households by offering a lower credit score hurdle than many competitors.
Stars: 3.20
Read our full New American Funding mortgage review
Key benefits
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Requires a minimum credit score of 660 for home equity loans. That’s the lowest FICO score among our lender finalists, which go as high as 780.
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Home equity loans are available up to $660,000.
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New American Funding is the nation’s largest Latino-owned home loan lender and sponsors Latino Focus, Black Impact, and NAF Pride programs.
Need to know
The Yahoo view: Rocket has always led with technology. Now, it’s not just about a digital application but a high-tech way to avoid paying for an appraisal on a home equity loan.
Stars: 3.06
Read our full Rocket Mortgage review
Key benefits
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If your property qualifies, Rocket can use a free “automated valuation model” instead of charging you for an appraisal.
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Home equity loans are available from $45,000 to $500,000.
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Claims an average closing time of 20 days.
Need to know
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Rocket says closing costs range from 3% to 6% of the loan amount.
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Allowed combined loan-to-value ratio limits are based on your credit score; the higher your score, the higher the CLTV ratio allowed.
Learn more: What is a home appraisal, and how much does it cost?
A home equity loan is a type of second mortgage, so you can tap your home equity without refinancing. It’s a straightforward way to access the value of your home without refinancing your original mortgage or selling your house. It’s an installment loan, which means you receive a lump sum of money at closing and repay it monthly over several years.
Like any loan, you’ll want to shop for the best interest rate and choose a loan term that results in a monthly payment you can comfortably afford.
Dig deeper: What is a home equity loan? A complete overview
The loan will be based on the amount of equity you have in your house. Lenders will consider your outstanding mortgage balance first and lend you a sum equal to some percentage of your remaining equity. Called the combined loan-to-value ratio (CLTV ratio), that share can vary from 80% to 100%.
Lenders typically approve borrowers with at least 15% to 20% equity in their homes.
Here’s an example of a lender that allows a CLTV of up to 90%:
Your home’s current market value: $300,000
90% combined loan-to-value = $270,000
The balance of your existing mortgage: $200,000
The amount available for a home equity loan = $70,000
Learn more: Here’s how much you can borrow with a home equity loan
Home equity loans are called second mortgages because you keep your original home loan and establish another mortgage using your house as collateral. Lenders will base their decision on your ability to qualify on three primary factors:
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Your debt-to-income ratio (often a maximum of 50%)
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Your combined loan-to-value ratio (90% CLTV is common)
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Your credit score (a FICO of 680 or higher is typical)
Mortgage lenders will also frequently require proof of insurance, income, and an appraisal of the house.
Read more: What do you need to qualify for a home equity loan? Here are the requirements.
An appraisal is usually required to get the best terms on your home equity loan. The lender wants to be confident that the home’s value will serve as sufficient collateral for the second mortgage. And frankly, you want to know that you won’t be “underwater” on your home with another loan — that means you owe more than the home is worth. Not a good place to be.
Sometimes, a certified appraiser may simply do a “drive-by” or remote appraisal combined with an analysis of comparable sales. Other lenders may require more thorough on-site inspections.
A new trend is using automated valuation models to confirm the market price of a home instead of an appraisal. This is similar to a Zillow Zestimate. Not many lenders are doing this yet — Rocket Mortgage home equity loans are one of the few so far — but it may be more common soon.
Yahoo Finance surveyed home equity lenders and found that they offer a variety of HEL closing costs. Some lenders pay the closing costs or promote “no fee” home equity loans. A similar number of lenders charge closing fees of 3% to 6% of the loan amount.
There might also be annual fees, origination charges, and quite a few third-party fees. As with any loan, you’ll want to shop around for the best combination of interest rates and fees.
Dive deeper: What to expect for home equity loan closing costs
If you itemize deductions, the interest you pay on a home equity loan may be deductible. The catch: According to the IRS, you must use the loan proceeds to “buy, build, or substantially improve” the home used as collateral for the HEL. If the tax break is important to you, you’ll want to be sure your home improvement projects meet that “substantial improvement” standard.
Learn more: Is interest paid on a home equity loan tax deductible?
A home equity loan is not your only choice when looking to pull out some of the cash locked in the walls of your house. Here are other equity-tapping alternatives.
The HELOC is another type of second mortgage, and it allows on-demand equity access. Structured as a line of credit rather than the HEL’s lump sum, a HELOC charges interest only on the amount you’ve withdrawn. You can pay it down, then draw again. Or pay only the interest while drawing from your available line.
The HELOC can serve as emergency cash, a home project-by-project funding machine, or a splurge-on-something-and-repay-it-later money supply (though you should always be thoughtful when deciding how to spend the funds).
It’s the Swiss Army knife of home equity availability.
Dig deeper: Home equity loan vs. HELOC — Tapping into your equity when rates are high
A cash-out refinance works when you want to trade in your old mortgage rather than have two home loans. You refi your loan and receive a chunk of your equity at closing. It’s kind of nice when the bank isn’t the only one getting paid at a loan signing, right?
Of course, there are arguments for and against a cash-out refinance. It depends on things like interest rates, how long you’ll stay in the home, and whether you shorten or lengthen the repayment period. And your financial goals.
Read more: Home equity loan vs. cash-out refinance — Which should you choose?
Using only your signature and good credit, a personal loan can be an excellent way to get cash when needed — without putting your home at risk as collateral. The interest rate may be higher on a personal loan than on a HEL, but the payback period is often shorter on a personal loan. That means you’ll likely pay it off faster than a home equity loan, though the monthly payment may be significantly higher.
And closing costs on a personal loan will potentially be much lower compared to a HEL.
Keep learning: Home equity loan vs. personal loan — Which is best for home improvements?
Tapping this home equity tool will require that you are 62 or older. A home equity conversion mortgage (HECM) is the only reverse mortgage issued by government-approved FHA lenders. With a HECM, you withdraw the equity from your home without making loan payments. You simply maintain the home while paying taxes and homeowners insurance. Meanwhile, fees accumulate but will not exceed the home’s value and are recouped when you sell the house, move, or die.
HECM counselors can walk you through the program.
Read more: What is a HECM reverse mortgage, and do you qualify?
We considered the following mortgage lenders for our home equity lenders best-of list, but they weren’t quite as strong as our top picks. And some don’t offer home equity loans.
Most home equity loans are issued from financial institutions with deposits — like banks. So your options are extensive. The Yahoo Finance analysis ranks Fifth Third Bank as the best bank for a home equity loan among the providers we considered. However, since Fifth Third serves fewer than a dozen states, you may need to look at banks and credit unions in your area with attractive HEL offerings. And, of course, the home equity loan lenders we’ve vetted above all have online applications and services.
Overall, Yahoo Finance rates Better Mortgage as the best choice because of fast closings and the availability of high-dollar home equity loans. You may find a lender with lower fees or a better interest rate, but you won’t know until you shop for two or three HEL providers.
Home equity loan rates have averaged close to 8.60% over the past 52 weeks, according to a Bankrate survey. Comparing two or more lenders might get you an even better interest rate.
Methodology:
Yahoo Finance reviews and scores home equity loan lenders based on: 1) Available products, 2) Fees, 3) CLTV, 4) Closing times, 5) Maximum DTI, 6) Minimum credit scores, 7) Maximum loans, 8) Loan terms, 9) Prepayment penalties, 10) Special features, and 11) Customer satisfaction.
Advertisers or sponsorships do not influence ratings.
Editorial disclosure for mortgages:
The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender’s website for the most current information. This site doesn’t include all currently available offers.
This article was edited by Laura Grace Tarpley.
