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Best HELOC Lenders of 2024

Review Updated
Matt Frankel, CFP®
Author: Matt Frankel, CFP®
Matt Frankel, CFP®
Matt Frankel, CFP®
Writer, Analyst

Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for Motley Fool Money and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column for the Motley Fool ("Ask a Fool") that is syndicated in USA Today, and his work with Motley Fool Money has also been syndicated to MSN and Yahoo! Finance. He has been regularly featured on Fox Business and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.

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Nathan Alderman
Fact Checked: Nathan Alderman
Nathan Alderman
Nathan Alderman
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Nathan Alderman has been a full-time Motley Fool employee since 2005, making errors his arch-enemies in a variety of roles including a six-year stint as the dedicated fact-checker for The Motley Fool's premium newsletter services. As Motley Fool Money's Compliance Lead, he makes sure that all the site's information is accurate and up to date, which ensures we always steer readers right and keeps various financial partners happy. A graduate of Northwestern University's Medill School of Journalism, Nathan spends his spare time volunteering for civic causes, writing and podcasting for fun, adoring his wife, and wrangling his two very large young children.

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A home equity line of credit, or HELOC, can be an excellent tool that allows homeowners to access the equity in their home as needed. Most mortgage lenders offer HELOCs in some form, so here's a rundown of the important concepts you should know before applying for a HELOC of your own, as well as a list of the best HELOC lenders right now.

Our best HELOC lenders

Lender Best For Next Steps
Graphic of PenFed Mortgage
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
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Best For

Easy online application
Read Review
Graphic of PNC Mortgage
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Best For

Diverse loan offerings
Read Review
Graphic of Bank of America Mortgage
Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Best For

Diverse loan offerings and relationship discounts
Read Review
Graphic of US Bank Mortgage
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
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Best For

Down payment assistance
Read Review

How to find the best HELOC lender

Interest rates, closing costs, and other fees vary dramatically among HELOC lenders.

The best way to compare HELOC lenders is to get pre-approved. Multiple HELOC applications won't negatively impact your credit score more than just one application would; the FICO® credit scoring formula has special provisions that encourage rate shopping. Whether you apply with one HELOC lender or a dozen, it will count the same for your credit score as long as all of your applications take place within a couple weeks of each other.

You might be surprised how much your HELOC offers can differ between lenders. Once you've done this, simply choose the best one and accept the offer.

Compare HELOC lenders

Ratings Methodology
PenFed Mortgage
Read Review

Best for: Easy online application

PenFed Mortgage

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor

Bottom Line

PenFed is a great all-around credit union that offers affordable financial products, including a free checking account and annual-fee-free credit card. The mortgages here are just as friendly, with low fees, opportunities for credits, and competitive rates. PenFed offers highly rated customer service, and a good online mortgage experience.

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Min. Credit Score FHA- 620 Conventional- 650 HELOC- 680 Jumbo- 700

  • 620

Min. Down Payment 0% (VA loans); 3% Conventional; 5% Home Ready

  • 0%-3%

Key Features

  • Good selection
  • Lender credits
  • Great BBB rating

Loan Types

  • Conventional
  • FHA
  • VA
  • Jumbo

Fixed Rate Terms

  • 30y, 20y, 15y, 10y

Adjustable Rate Terms

  • N/A
PNC Mortgage
Read Review

Best for: Diverse loan offerings

PNC Mortgage

Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor

Bottom Line

PNC is a large bank with a wide range of financial products. It offers an online tool called Home Insight Planner to help borrowers find a home that fits their budget and needs. It then matches a borrower to its diverse loan products and terms. PNC can accommodate many borrowers, including those looking for mortgage options with no PMI.

Read Full Review

Min. Credit Score

  • 600

Min. Down Payment 0% VA and USDA 3% conventional 3.5% FHA

  • 0% - 3.5%

Key Features

  • 3% down no PMI offering
  • HELOCs
  • Cash grants
  • Several low down payment mortgage options

Loan Types

  • Conventional
  • FHA
  • VA
  • USDA
  • Jumbo

Fixed Rate Terms

  • 10-30 years

Adjustable Rate Terms

  • 10/6, 7/6
Bank of America Mortgage
Read Review

Best for: Diverse loan offerings and relationship discounts

Bank of America Mortgage

Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor

Bottom Line

Bank of America is one of the largest banks in the U.S., offering a wide variety of financial products in addition to its mortgages. Few lenders can match the lineup of loan products and terms. Bank of America offers a Preferred Rewards program for borrowers who have bank accounts at the bank and investment accounts at Merrill. Borrowers can qualify for an origination fee or interest rate reduction based on their eligible tier at the time of application.

Read Full Review

Min. Credit Score

  • Undisclosed

Min. Down Payment 0% VA loans 3.5% FHA 3% Conventional loans, Affordable Loan Solution® mortgage, Freddie Mac Home Possible® mortgage 5% Other loans

  • 0%-3%

Key Features

  • Wide range of financial products
  • Preferred Rewards program
  • Ability to apply entirely online
  • Loans up to $2 million

Loan Types

  • Conventional
  • FHA
  • VA
  • Jumbo

Fixed Rate Terms

  • 30y, 20y, 15y

Adjustable Rate Terms

  • 10/6, 7/6, 5/6

US Bank Mortgage
Read Review

Best for: Down payment assistance

US Bank Mortgage

Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor

Bottom Line

A good option for a traditional bank mortgage loan with a diversity of offerings, an easy online prequalification experience, and customer loyalty discounts.

Read Full Review

Min. Credit Score 580 (FHA) 620 (other mortgage products)

  • 580 - 620

Min. Down Payment 0% - 3.5% (FHA and VA loans) 3% (conventional loans)

  • 0% - 3.5%

Key Features

  • Great customer reputation
  • Loyalty discounts
  • Down payment assistance

Loan Types

  • Conventional
  • FHA
  • VA
  • USDA
  • Jumbo

Fixed Rate Terms

  • 30y, 20y, 15y, 10y

Adjustable Rate Terms

  • 10/1, 5/1, 3/1

What are the requirements for a HELOC?

The main requirement for a HELOC is that you have sufficient equity in your home from which to borrow. The most common cap in the mortgage industry is an 80% loan-to-value (LTV) ratio, so if your primary mortgage is equal to 50% of your home's value, you would potentially be able to obtain a HELOC with a limit equal to 30% of its value.

Example: Let's say that your home is worth $500,000 and you owe $150,000 on your mortgage. 80% of your home's value would be $400,000, so you should expect the maximum HELOC limit most lenders will approve to be the difference between this amount and your mortgage amount, or $250,000.

Some lenders have slightly higher LTV maximums of 85% or even 90%. In any event, your home will need to be worth significantly more than you owe on your primary mortgage for a HELOC to be possible.

You'll also need to qualify for a HELOC based on your credit score and income. Even though the HELOC is secured by the equity in your home, the lender will want to verify that you're able to pay it back and are likely to make your payments on time.

What is a home equity line of credit (HELOC)?

A home equity line of credit, or HELOC, is a type of revolving credit line that is backed by the equity you have in your home. If you aren't familiar with the concept of home equity, it is the difference between the market value of your home and any existing mortgage debt you owe on it. For example, if you own a home worth $250,000 and have a $150,000 mortgage balance, you have $100,000 in home equity.

When a borrower applies for and receives a HELOC, they don't receive any money right away. Instead, they receive a credit line with a limit determined by their lender and based on their home equity that they can choose to draw from as they need funds.

Pros and cons of HELOCs

Pros

  • Only borrow what you need
  • Less complicated to apply for than a mortgage refinance
  • May be a cheaper way to borrow money than a personal loan or credit card
  • Interest can be tax deductible if the HELOC is used to make home repairs or renovations

Cons

  • Interest rate is likely higher than with a cash-out refinance
  • Most HELOCs have variable interest rates
  • You're reducing the amount of equity in your home
  • Nonpayment can result in foreclosure
  • HELOCs typically have transaction fees and closing costs, like an origination fee

Alternatives to HELOCs

There are a few potential alternatives to obtaining a home equity line of credit. To name the most common:

  • Home equity loan: We mentioned this earlier, but a home equity loan is similar to a HELOC, with the main difference being that the loan amount is fixed. Check out our picks for the best home equity loans.
  • Cash-out refinance: Like a home equity loan, a cash-out refinance is for a set amount of money. However, while a home equity loan is completely separate from your primary mortgage, a cash-out refinancing replaces your existing mortgage with a completely new (and larger) one. This is usually a more desirable option when interest rates are low, and is less attractive if prevailing mortgage rates are significantly more than you're paying on your current loan.
  • Credit card: Credit cards are typically not desirable ways to pay for large expenses, with one key exception. If you can get a credit card with a 0% intro APR, and you're sure you can pay the balance before interest starts to kick in, this can be a reasonable way to finance home improvements or other major purchases.
  • Personal loan: A personal loan is distinguished by two characteristics. First, it is an installment loan, not a revolving credit line. Second, it isn't backed by any asset (like your home), making it an unsecured form of debt. Personal loans are commonly used for many of the same purposes as HELOCs, such as home renovations, but since they aren't secured by your home equity, you may be able to use one even if you don't have much equity in your home.

FAQs

  • You can use a home equity line of credit to pay for pretty much whatever you want to buy. However, the interest you pay will only be tax deductible if the funds are used to pay for home improvements, repairs, or renovations.

  • As long as the home's equity justifies it, there's nothing preventing a borrower from obtaining a refinancing loan to pay off both an existing primary mortgage and a HELOC.

  • HELOCs often have transaction fees when a borrower makes a withdrawal. They also typically have certain closing costs (although less than most primary mortgages) that can include things like origination fees, appraisal fees, credit report fees, and attorney fees. Fees can vary dramatically by lender.

  • Yes, but the HELOC will almost certainly have to be paid off upon closing. Since it's secured by the home, the lender will typically demand that the loan be immediately repaid if you sell the house.

  • A HELOC can be a good idea if you have substantial equity in your home and you want easy access to it when necessary. If you need to borrow a set amount, or if you don't have enough equity in your home to justify a HELOC, there are other options that may fit your situation better. A HELOC can also be a smart idea if interest rates have risen significantly since you obtained your primary mortgage, and therefore a cash-out refinancing doesn't make financial sense.