Best HELOC Lenders
A home equity line of credit (HELOC) lets you borrow against your home's equity as you need it, usually at a lower rate than a personal loan or card. When you compare lenders, the rate is only part of it. Also compare the margin over the prime rate, closing costs and annual fees, how much of your equity you can borrow, and how long the draw period lasts. Your home secures the line, so if you can't repay, you can lose it.
Checked October 12, 2026. Lender terms change often; confirm on each lender's site before applying.
- A HELOC is a credit line secured by your home. Rates are usually the prime rate (7.00% now) plus a margin.
- Compare the margin, closing costs, annual fee, how much equity you can borrow and the draw period, not just the advertised rate.
- Payments can jump sharply when the draw period ends and you start repaying principal.
- Your home is the collateral. If you can't repay, you can lose it.
How HELOCs are priced
Most HELOC rates are variable: the prime rate plus a margin set by the lender. When the Federal Reserve moves rates, your payment moves too. The prime rate is 7.00% as of October 12, 2026, after the Fed raised rates in September. Fed officials have signaled another increase is possible this year (see how Fed meetings work). The margin is what lenders actually compete on. Ask for it directly, not just the "rate today."
Some lenders let you lock part of your balance at a fixed rate, which helps with a large, one-off cost.
Lenders compared
| Lender | Known for | Fees | Worth knowing |
| Figure | Online application, fast funding | Origination fee up to 4.99% of the draw. No annual fee | You must draw the full line at closing, at a fixed rate. Funding in as few as 5 days. Draw period only 2 to 5 years |
| Bank of America | No closing costs on many lines | No annual fee | Rate discounts for existing customers and autopay |
| PenFed Credit Union | Borrowing a high share of your equity | Varies | Membership required |
| Your local credit union | Low margins | Often low | Often the cheapest, so ask before committing elsewhere |
What to compare
| Why it matters | |
| Margin over prime | Sets your rate for the life of the line |
| Maximum combined loan-to-value (CLTV) | How much you can borrow. Usually 80–90% of your home's value, minus your mortgage |
| Closing costs | Appraisal, title and recording fees. Some lenders pay them but charge them back if you close the line early |
| Annual fee | Some lenders charge $50–$100 a year |
| Draw period | Usually 10 years of borrowing, often interest-only |
| Repayment period | Usually up to 20 years, when payments jump because you're repaying principal |
| Minimum draw | Some lenders require an initial draw |
How much can you borrow?
Home value × maximum CLTV − mortgage balance = your maximum line.
For example: a $400,000 home with an 85% CLTV limit and a $250,000 mortgage allows up to $90,000 ($340,000 − $250,000).
Watch the payment jump
During the draw period you might pay interest only. When repayment starts, you pay principal too, and the payment can double or more. Plan for that payment from the start.
HELOC or personal loan?
A HELOC usually suits large or staged costs, such as a long renovation. For a single job under about $50,000 that you need done quickly, a personal loan avoids putting your home up as collateral.
Questions to ask each lender
- What's the margin over prime, and is there an introductory rate?
- What are the closing costs, and do I owe them if I close the line early?
- Is there an annual fee or a minimum draw?
- Can I lock part of the balance at a fixed rate?
- How long does it take to close?
What a $50,000 HELOC costs each month
Assume a rate of 8.50% (prime of 7.00% plus a 1.50% margin):
| Stage | Monthly payment |
| Draw period, interest only | About $354 |
| Repayment over 20 years | About $434 |
| If prime rises 0.25%, interest only | About $365 |
Because most HELOCs are variable, the payment changes whenever the Fed moves rates. See how Fed meetings work.
HELOC vs. home equity loan vs. cash-out refinance
| HELOC | Home equity loan | Cash-out refinance | |
| How you get money | Borrow as needed, up to a limit | One lump sum | Replace your mortgage with a bigger one |
| Rate | Usually variable | Fixed | Fixed or adjustable |
| Closing costs | Low to moderate | Moderate | Highest (a full mortgage) |
| Affects your first mortgage rate | No | No | Yes, replaces it |
| Best for | Ongoing or uncertain costs | A single known cost | When new mortgage rates are lower than your current one |
If you have a low fixed rate on your current mortgage, a cash-out refinance usually means giving it up. A HELOC or home equity loan keeps it. To compare refinancing costs, use the refinance breakeven calculator.
What lenders usually require
- Equity: at least 15–20% left after the line, since most lenders cap combined borrowing at 80–90% of your home's value.
- Credit score: often 620–680 or higher; the best margins go to scores above 740.
- Debt-to-income ratio: usually no more than about 43%, including the new line.
- Proof of income and an appraisal or automated valuation of the home.
Good and bad uses
| Usually reasonable | Usually risky |
| Home repairs and renovations that add value | Vacations and everyday spending |
| Paying off much higher-rate debt, if you won't run it up again | Investing in stocks or crypto |
| A planned, large cost with a repayment plan | Covering a shortfall you can't repay from income |
Interest is only tax-deductible if you use the money to buy, build or substantially improve the home that secures the line.
How to apply
- Estimate your available equity with the formula above.
- Check your credit report and score.
- Get quotes from at least three lenders, including a local credit union, on the same day.
- Compare the margin, fees and draw terms side by side.
- Expect an appraisal or automated valuation, then closing. Banks often take 30–45 days; some online lenders, like Figure, can fund in about a week.
FAQ
Is HELOC interest tax-deductible? Only if you spend the money buying, building or substantially improving the home that secures it (IRS Publication 936).
Does opening a HELOC hurt my credit? Applying causes a hard inquiry. Most scoring models don't count a HELOC in card utilization, but some can.
Can a lender freeze my line? Yes. If your home's value falls a lot or your finances change, a lender can freeze or reduce the line.
What credit score do I need for a HELOC? Many lenders want at least 620–680. Figure's minimum is reported at 600. A higher score gets a lower margin.
How long does it take to get a HELOC? About 2–6 weeks at most banks and credit unions. Some online lenders fund in as few as 5 business days.
Can I pay off a HELOC early? Usually yes, but check for an early-closure fee if the lender paid your closing costs.
What happens to my HELOC if I sell my house? The balance is paid off from the sale proceeds at closing, along with your mortgage.
Figures and rules in this article are checked against the official sources below. Where they disagree with us, they win.
