Guide to the Best Home Equity Loan Rates

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Contributor, Benzinga
November 17, 2023

Even the most prepared homeowners can find themselves on the receiving end of an unexpected auto repair bill, health expense or other unanticipated cost. In events like these — or whenever you need to access quick cash — a home equity loan can be a low-cost, easily accessible solution for homeowners.

Home equity loans tap into the amount of your home that you have paid off in order to cover an expense that you have right now. Read on to learn everything you need to know about home equity loans and how to find the best home equity loan rate.


Best Home Equity Loan Rates

  • Best for Online Mortgage: Rocket Mortgage
  • Best for Flexible HELOCs: U.S. Bank
  • Best for Low in Cash: Discover
  • Best for Fast Closing: Spring EQ

Best Home Equity Loan Rates

For most homeowners, home equity loans are easier to access than competing financing options. Many have fixed interest rates, and there are no limitations on how you can use the money from the loan, which can make home equity loans an appealing option for a variety of needs. Here's Benzinga’s take on the best home equity loan lenders.

1. Best Online Lender: Rocket Mortgage 

Rocket Mortgage is an online mortgage financing option now offering home equity lines of credit (HELOCs) and home equity loans. One of the largest online loan providers, Rocket Mortgage offers a range of mortgage and purchase choices, including a learning center to help you find the best product for you. Resources are also available in Spanish, and mortgage rates are updated on the company’s website regularly to help you keep up with how prices are changing.

To qualify for a home equity loan from Rocket Mortgage, you’ll need a credit score of at least 680 points or better. However, the lender does make exceptions if you have a lower credit score but you also have a co-signer on your loan. 

You must also have at least 10% equity in your property, which is lower than many other home equity loan providers that might require you to have up to 20% equity in your home to qualify. You can also qualify for a loan with a debt-to-income ratio as high as 45%, which is about average when compared to other home equity loan options. 

Loans are available for primary and secondary residences, and you cannot have a missed or late mortgage payment in the last 12 months to qualify. 


  • Apply online through their website
  • Faster loan processing times
  • Variety of mortgage options


  • Lack of personal interaction
  • Inability to negotiate terms

2. Best for Flexible HELOCs: U.S. Bank 

If you prefer the touch of personal service, you might want to consider getting your home equity loan from U.S. Bank. U.S. Bank is one of the largest and longest-standing banks in the country, with thousands of branches spread across 27 states. 

If you’d prefer to meet with a representative in person to discuss your home equity line of credit and loan options, U.S. Bank can be an appealing option. If you aren’t sure which financing option would be best for your situation, an in-person meeting is also a great way to begin comparing your choices.

U.S. Bank offers home equity loans and HELOCs with terms of 10 and 15 years, and annual percentage rates (APRs) start at around 6.1% for basic home equity loans. You will need a credit score of at least 740 points to qualify, but U.S. Bank does not provide information on the maximum debt-to-income ratio (DTI) you can have and still qualify for financing. 

While you can start an application in person when you meet with a representative, you can also apply for a loan completely online using U.S. Bank’s streamlined virtual application process. 


  • Flexibility in accessing funds as needed
  • Can be used for a variety of purposes, such as home renovations or debt consolidation.
  • Interest may be tax-deductible, depending on the specific circumstances


  • Requires collateral, typically in the form of your home.
  • Potential for foreclosure if unable to repay the loan
  • Closing costs and fees associated with opening and maintaining the HELOC

3. Best for Low in Cash: Discover

While you’re probably already familiar with Discover for its credit card reward programs, you might not know that the company also offers home equity loan options. Discover can be a choice worth considering for your home equity loan if you’re low on cash and you’re looking for a lender with low upfront fees. Unlike some competitors, Discover’s home equity loans require $0 in cash at closing, and you also won’t need to worry about appraisal, application or origination fees.

APRs on home equity loans from Discover begin at 6.99% APR but may go as high as almost 13%, depending on your personal application details. You will need to have a credit score of at least 620 points and a DTI ratio of no more than 43%. 

Loans from Discover are available in balances as low as $35,000 and as high as $300,000, but you must already have at least 10% equity in your property to begin. Terms vary between 10 and 30 years, which can make Discover a great choice if you’re looking for a loan with a longer term to take advantage of lower monthly payments. 


  • Low interest rates
  • Flexible terms and repayment options
  • No application fees or closing costs
  • Easy online application process


  • Requires home ownership
  • Risk of losing home if loan is not repaid
  • Limited loan amounts based on equity
  • Credit and income requirements may restrict eligibility

4. Best for Fast Closing: Spring EQ

If you need to close on your home equity loan sooner than later, you might want to consider working with Spring EQ. Spring EQ prides itself on providing a fast option for homeowners to close on their loan by using a streamlined, straightforward application process. Thanks to artificial intelligence (AI)-assisted underwriting processes, Spring EQ may be able to close your home equity loan in as little as 11 days after they receive your paperwork.

To qualify for a loan approval from Spring EQ, you’ll need to have a credit score of at least 680 points. Loan balances are available up to $500,000, which can make Spring EQ a stronger option if you have a high-value property and you’re looking for the ability to borrow more. The maximum acceptable DTI ratio for Spring EQ’s home equity loans is 50%, and you must already have at least 10% equity in your home.  


  • Competitive interest rates
  • Flexible loan options
  • Quick and easy online application process


  • Available in only certain states
  • Requires minimum credit score and home equity requirements
  • May have fees and closing costs

How to Find the Best Home Equity Loan Rate

If you're looking to tap into the equity of your home to finance a major purchase or pay off high-interest debt, a home equity loan can be a good option. To ensure you get the best possible deal, it's important to research current market rates and compare loan offers from multiple lenders. Here are some tips on how to find the best home equity loan rates:

Understand Your Financial Situation

Start by taking inventory of your existing debts, including credit card bills and outstanding loans. A lender will want to see that you are responsible for your existing debts before offering a new one, so focus on paying down these balances and reducing your overall debt-to-income ratio. A lower debt-to-income ratio may also result in a lower overall home equity loan rate.

Check Your Credit Score

Your credit score plays a big role in determining the interest rate you'll be offered and can help you get a lower interest rate. You can improve your credit score by paying your bills on time, paying off debt and reducing any outstanding balances. Aim to have a credit score of at least 700, ideally 750 or higher, before applying for a home equity loan.

Research Current Market Rates

You can start by researching online and comparing rates from different lenders. You may want to consider both traditional banks and credit unions as well as online lenders. Banks and credit unions tend to offer lower home equity loan interest rates than online lenders. But online lenders may offer faster approval times and more flexibility when it comes to loan terms.

Keep in mind that rates can vary widely depending on your credit score, loan amount and other factors.

Get Quotes From Multiple Lenders

A simple online search can give you an idea of the different interest rates various lenders offer. It is advisable to focus on reputable lenders with a history of fair lending practices and good customer reviews. You can also check out lender review sites to see how other borrowers rate their experiences with different lenders.

Consider a Variable-Rate Loan

Typically, the introductory rate on a variable-rate loan is lower than that of a fixed-rate loan. This makes variable-rate loans an attractive option for borrowers who are looking to save money on interest in the short term.

Keep in mind that with variable-rate loans, your payments could increase if interest rates rise in the future. This introduces an element of risk that isn't present in fixed-rate loans.

Why Take Out a Home Equity Loan?

A home equity loan can provide you with a flexible option for financing when you need quick cash at an affordable rate. Below are a few reasons you might take a home equity loan.

You Need to Pay Off Credit Card Debt

The average credit card has an APR of about 14.6% as of June 2022, while the APR you’re likely to pay on your home equity loan is less than half of that. If you have outstanding credit card debt that’s accruing interest at a high rate, you can save money over time by taking out a home equity loan to pay it down. While you’ll still need to pay back what you borrow in a loan, you won’t pay quite as much in interest.

You’re Having Trouble Qualifying for Other Types of Loans

If you have a lower credit score or other considerations that make it more difficult to qualify for a loan, a home equity loan might be the solution. Unlike credit cards and personal loans, home equity loans are secured loans because they are backed by the equity that you have in your property. This means that issuing home equity loans is less risky when compared to unsecured loans, making them easier to qualify for.

You Need an Immediate Lump Sum of Cash

When you take out a home equity loan, you receive your money in an immediate lump sum. You can use this lump sum for any purpose you want — unlike other types of loans like an auto loan, you won’t need a specific reason to be approved for a home equity loan. From funding home improvements to paying for a child’s college education, there are no limitations.

You Need a Loan with a Longer Term

Home equity loans usually come with terms between 10 and 20 years, which means you have up to two decades to pay back money you borrow from your home’s equity. The longer a loan’s term, the less you need to pay each month to remain on schedule. This means that home equity loans can be a great solution if you need financing that you can pay back in small increments.

You might also want to take out a home equity loan if you need a fixed-rate option, which isn’t available with some other options like HELOCs.

Drawbacks of a Home Equity Loan

While a home equity loan can be a valuable tool, there are a few drawbacks. Make sure you consider the following before you sign on any home equity loan, no matter the provider.

Home Equity Loans Use Your Home as Collateral

Home equity loans are easier to qualify for than credit cards and other financing choices because they are secured with your home. If you miss regular payments on your home equity loan, you run the risk of falling into foreclosure. Be sure you can pay back the money you borrow before you take out a home equity loan.

You’ll be Taking on a Second Mortgage

Unlike refinancing your mortgage loan, taking out a home equity loan does not replace or remove your original mortgage. You must continue making payments on your mortgage loan while also paying down your home equity loan, which means you’ll need to budget for two premium payments per month until you pay back what you owe. Both loans will accrue interest, which compounds the price you pay for your home by the time you finally own your property in full.

Longer Terms Come with Higher APRs

One of the top reasons homeowners choose a home equity loan over a credit card when they need to cover a last-minute expense is that home equity loans tend to have lower APRs. While a lower APR will help you pay less over time when you borrow money, you will only be able to access very low APRs when you take out a loan with a shorter term. If you take a longer term, you’ll pay less each month, but you might also pay an APR comparable to what you’d find on a credit card.

Home Equity Loans Have Minimum Balances

Depending on the lender you get your home equity loan from, you might have to borrow at least a minimum balance. For example, if you get your loan from Discover, you must borrow at least $35,000 to be approved. This can potentially force you to borrow more money than you need, which can lead to wasteful excess spending.

If you need to borrow less money than the minimum loan balances you’re offered when you shop, you might want to consider a home equity line of credit instead. HELOCs function similarly to credit cards because they have no minimum loan balance — you can borrow as little as you need or as much as you’d like up to your credit limit.

Choose the Best Home Equity Loan Rate

Home equity loans play a crucial role in providing financial assistance to homeowners. By leveraging the equity in you homes, you can secure competitive interest rates and flexible terms. Factors such as credit score, loan-to-value ratio, and market conditions determine the best home equity loan rates. It is essential for you to research and compare various lenders to find the most favorable loan options. Making informed decisions and doing thorough evaluations will ultimately lead to obtaining the best home equity loan rates.

Frequently Asked Questions


What is a home equity loan, and how does it work?


A home equity loan is a type of loan that allows you to borrow money using the equity in your home as collateral. The loan is usually paid back over a fixed term with a fixed interest rate.


How can I find the best home equity loan rates?


To find the best home equity loan rates, it’s important to shop around and compare rates from multiple lenders. You can also check with your current mortgage lender to see whether it offers home equity loans with competitive rates.


What are some factors that can affect home equity loan rates?


The interest rate on a home equity loan can be affected by a variety of factors, including your credit score, the amount of equity you have in your home, and the overall health of the economy. Additionally, the type of loan you choose (fixed or variable) can also impact your interest rate.

Get Ready for Take Off

Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.

You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.