Best Home Equity Loan Rates for May 2025

A home equity mortgage lets you borrow in the direction of your individual dwelling equity, which is the excellence between your individual dwelling’s market value and the remaining steadiness in your mortgage. Like dwelling equity traces of credit score rating (HELOCs), dwelling equity loans are secured by collateral: your individual dwelling.

In regular, dwelling equity loans are more likely to have lower charges of curiosity than non-public loans or financial institution playing cards. That’s on account of dwelling equity loans are secured debt, which makes them a lot much less harmful for the lender. The draw again is that ought to you miss funds, you hazard dropping your individual dwelling.

I’ve spoken with specialists with reference to the advantages and disadvantages of dwelling equity loans, how they work and the place to hunt out the most effective fees. Here’s what I’ve uncovered.

This week’s dwelling equity mortgage fees

Here are the widespread fees for dwelling equity loans and residential equity traces of credit score rating as of May 14, 2025.

Note: These fees come from a survey carried out by Bankrate. The averages are determined from a survey of the best 10 banks throughout the prime 10 US markets.

Current dwelling equity mortgage fees and developments

Since March 2022, the Federal Reserve has elevated borrowing costs by climbing its benchmark cost in an try to carry inflation down. As inflation cooled, the Federal Reserve paused its cost hikes nonetheless dwelling equity mortgage fees remained extreme for debtors. Now that the Fed has started to cut charges of curiosity as soon as extra, the borrowing worth for financial merchandise like dwelling equity loans and HELOCs ought to start out falling.

Over the earlier three years, dwelling equity loans have grow to be a popular totally different for borrowing, since they carry lower charges of curiosity than totally different types of loans. One primary draw of a home equity mortgage is that homeowners can leverage their dwelling’s equity with out having to refinance. 

“Most homeowners with mortgages are choosing home equity loans or HELOCs, instead of a cash-out refinance, to avoid losing their attractive interest rates,” acknowledged Vikram Gupta, head of dwelling equity at PNC Bank.

Best dwelling equity mortgage fees of May 2025

Note: The above annual share fees are current as of Feb. 4, 2025. Your APR will rely on such components as your credit score rating ranking, income, mortgage time interval and whether or not or not you enroll in autopay or totally different lender explicit requirements.

Comparing the most effective dwelling equity mortgage lenders of May 2025

U.S. Bank

Good for nationwide availability

U.S. Bank is the fifth largest banking institution throughout the US. It supplies every dwelling equity loans and HELOCs in 47 states. You can apply for a home equity mortgage or HELOC by way of a web-based utility, by cellphone or in particular person. If you want a mortgage estimate for a home equity mortgage with out ending a full utility, you could get one by speaking with a banker over the cellphone.

• APR : From 7.65%
• Max LTV ratio : Not specified
• Max debt-to-income ratio : Not specified
• Min credit score rating ranking : 660
• Loan amount : $15,000 to $750,000 (as a lot as $1 million for California properties)
• Term lengths : Up to 30 years
• Fees : None
• Additional requirements : Subject to credit score rating approval
• Perks: You can acquire a 0.5% cost low value by enrolling in automated funds from a U.S. Bank checking or monetary financial savings account.

TD Bank

Good for worth transparency

Primarily engaged on the East Coast, TD Bank supplies dwelling equity loans and HELOCs in 15 states. You can apply for a TD Bank dwelling equity mortgage or HELOC on-line, by cellphone or by visiting a TD Bank in particular person. The on-line utility includes a calculator that may let you already know the utmost amount you presumably can borrow primarily based totally on the info you enter. You may even see a full breakdown of fees, fees and month-to-month funds. No credit score rating confirm is required for this service.

• APR : From 7.99% (0.25% autopay low value included)
• Max LTV ratio : Not specified
• Max debt-to-income ratio : Not specified
• Min credit score rating ranking : Not specified
• Loan amount : From $10,000
• Term lengths : Five to 30 years
• Fees : $99 origination cost at closing. Closing costs solely utility to mortgage portions larger than $500,000.
• Additional requirements : Loan portions decrease than $25,000 might be discovered only for primary residence property use.
• Perks: You will acquire a 0.25% low value do you have to enroll in autopay from a TD non-public checking or monetary financial savings account.

Connexus Credit Union

Good division neighborhood

Connexus Credit Union operates in all 50 states, nonetheless it supplies dwelling equity loans and HELOCs in 46 states (excluding Alaska, Hawaii, Maryland and Texas). The credit score rating union has higher than 6,000 native branches. To apply for a home equity mortgage or HELOC with Connexus, you presumably can fill out a three-step utility on-line or in particular person. You gained’t be able to see a personalised cost or product phrases with out a credit score rating confirm.

• APR : From 7.31%
• Max LTV ratio: 90%
• Max-debt-to-income ratio : Not specified
• Min credit score rating ranking : Not specified
• Loan amount : From $5,000
• Term lengths : Five to fifteen years
• Fees : No annual cost. Closing costs can differ from $175 to $2,000, relying in your mortgage phrases and property location. It has returned mortgage funds fees of $15, consolation fees of $9.95 (for paying by debit or financial institution card on-line) and $14.95 (for paying by cellphone) and a pressured place insurance coverage protection processing cost of $12.
• Additional requirements: Because Connexus is a credit score rating union, its companies and merchandise are solely on the market to members. Member eligibility is open to most people: you (or a member of the household) merely must be a member of actually one in every of Connexus’s affiliate groups, reside in one in every of many communities or counties on Connexus’s guidelines or change right into a member of the Connexus Association with a $5 donation to Connexus’s affiliate nonprofit.
• Perks: Flexible membership decisions

KeyBank

Good on-line utility particular person experience

Based in Cleveland, KeyBank supplies dwelling equity loans to shoppers in 15 states and HELOCs to shoppers in 44 states. Aside from an unusual dwelling equity mortgage, KeyBank supplies a few fully totally different HELOC decisions. The KeyBank utility means that you would be able to apply for quite a few merchandise at one time. If you’re undecided whether or not or not KeyBank loans might be present in your area, the making use of will let you already know once you enter your ZIP code. If you’re an current KeyBank purchaser, you presumably can skim by way of the making use of and import your non-public information out of your account.

• APR: From 9.59% (0.25% shopper low value included)
• Max LTV ratio : 80% for conventional dwelling equity loans, 90% for high-value dwelling equity loans
• Max debt-to-income ratio : Not specified
• Min credit score rating ranking : Not specified
• Loan amount : From $25,000
• Term lengths : One to 30 years
• Fees : Origination cost of $295. Closing costs aren’t specified.
• Additional requirements: Borrowers must be a minimal of 18 years of age and reside in one in every of many states KeyBank operates in.
• Perks: KeyBank supplies a 0.25% cost low value for purchasers who’ve eligible checking and monetary financial savings accounts with them.

Spring EQ

Good chance for prime debt-to-income ratio limits

Spring EQ was primarily based in 2016 and serves shoppers in 38 states. Spring EQ supplies dwelling equity loans and HELOCs. Spring EQ doesn’t present fees for its dwelling lending merchandise on-line — you would full an utility to see your personalised cost. The Spring EQ mortgage utility course of is straightforward though. Customers can see an in depth breakdown of their mortgage time interval and cost decisions without having to bear a credit score rating confirm or current their Social Security amount.

• APR: Not specified
• Max LTV ratio : 90%
• Max debt-to-income ratio : 50%
• Min credit score rating ranking : 640
• Loan amount : Up to $500,000
• Term lengths : Not specified
• Fees : Spring EQ loans is also matter to an origination cost of $995 and an annual cost of $99 in some states.
• Additional requirements : Spring EQ doesn’t present fees for its dwelling lending merchandise on-line — you would full an utility to see your personalised cost.
• Perks: Spring EQ has the following most DTI ratio than most totally different lenders — consider 50% with the usual 43% widespread.

Third Federal Savings & Loan

Good chance for cost match guarantee

Third Federal Savings & Loan first opened in 1938. Today, the monetary establishment supplies dwelling equity loans in eight states and HELOCs in 26 states. Third Federal supplies a lowest cost guarantee on its HELOCs and residential equity loans, which suggests Third Federal provides you with the underside fee of curiosity relative to totally different associated lenders or pay you $1,000. You can apply for a home equity mortgage or HELOC on the Third Federal website online. You gained’t ought to register an account to make use of, nonetheless you’re nonetheless ready to avoid wasting your utility and return to it later.

• APR : From 6.99%
• Max LTV ratio : 80%
• Max debt-to-income ratio : Not specified
• Min credit score rating ranking : Not specified
• Loan amount : $10,000 to $200,000
• Term dimension s: Five to 30 years
• Fees : Home equity loans and HELOCs with Third Federal have an annual cost of $65 (waived the first 12 months). There aren’t any utility fees, closing fees or origination fees.
• Additional requirements : Specific requirements aren’t listed.
• Perks : If you organize autopay from an current Third Federal account, you’ll be eligible for a 0.25% cost low value.

Frost Bank

Good chance for Texas debtors

Frost Bank’s dwelling equity loans and HELOCs are solely on the market to Texas residents. You can apply for a home equity mortgage or HELOC on the Frost Bank website online, nonetheless you’ll must create an account. According to the website online, the making use of will solely take you quarter-hour.

• APR : From 7.32% (0.25% autopay low value included, solely on the market for 2nd liens)
• Max LTV ratio : 90%
• Max debt-to-income ratio : Not specified
• Min credit score rating ranking : Not specified
• Loan amount : $2,000 to $500,000
• Term lengths : 15 or 20 years
• Fees : No utility cost, annual cost or closing costs. Frost Bank does value a $15 month-to-month service cost, which is perhaps waived with a Frost Plus Account.
• Additional requirements : Borrowers ought to reside in Texas. The monetary establishment moreover requires proof of homeowners insurance coverage protection.
• Perks: 0.25% cost low value for purchasers who enroll in autopay from a Frost Bank checking or monetary financial savings account. However, this operate is simply on the market for second liens.

Regions Bank

Good for low fees

Regions Bank is among the many nation’s largest banking, mortgage and wealth administration service suppliers. Regions supplies dwelling equity loans and HELOCs in 15 states. You can apply for a Regions dwelling equity mortgage or HELOC on-line, in particular person or over the cellphone. You’ll ought to create an account with Regions to make use of. Before you create an account, though, you need to make the most of the monetary establishment’s private cost calculator to estimate your cost and month-to-month value.

• APR : From 6.75% to 14.125%(0.25% autopay low value included)
• Max LTV ratio : 89%
• Max debt-to-income ratio : Not specified
• Min credit score rating ranking : Not specified
• Loan amount : $10,000 to $250,000
• Term lengths : Seven, 10, 15, 20 or 30 years
• Fees : No closing costs and no annual fees. Late fees apply for 5% of the associated fee amount.
• Additional requirements : Not specified.
• Perks: This lender pays all closing costs for dwelling equity loans.

Discover

Good chance for no fees or closings costs

Discover is assumed primarily for its financial institution playing cards, nonetheless it moreover supplies dwelling equity loans — on the market in 48 states. The lender doesn’t present HELOCs the least bit. You can apply for a home equity mortgage from Discover on-line or over the cellphone. The utility course of takes roughly six to eight weeks in full, in response to Discover’s website online.

• APR : From 7% for first liens, from 8% for second liens
• Max LTV ratio : 90%
• Max debt-to-income ratio : 43%
• Min credit score rating ranking : 680
• Loan amount : $35,000 to $500,000
• Term lengths : 10, 15, 20 and 30 years
• Fees : None
• Additional requirements : Specific requirements not listed.
• Perks: The lender prices no origination fees, utility fees, appraisal fees or mortgage taxes.

BMO Harris

Good chance for second liens

BMO Harris companies and merchandise might be present in 48 states (all nonetheless New York and Texas). BMO Harris supplies dwelling equity loans and three variations of a HELOC. You can apply for a home equity mortgage or HELOC on-line or in particular person, nonetheless in order to get personalised fees, you’ll have to speak with a advisor on the cellphone. Getting personalised fees doesn’t require a troublesome credit score rating confirm.

Home equity loans from BMO Harris are solely on the market as second liens. If you’ve gotten already paid off your mortgage, a rate-lock HELOC from BMO Harris is also a higher chance.

• APR : From 8.97% (0.5% autopay low value not included)
• Max LTV ratio : Not specified
• Max debt-to-income ratio : Not specified
• Min credit score rating ranking : 700
• Loan amount : From $5,000
• Term lengths : Five to twenty years
• Fees : There isn’t any utility cost. BMO Harris might also pay closing costs for loans secured by an owner-occupied 1-to-4-family residence. If you repay your mortgage inside 36 months of opening, you would be accountable for recoupment fees.
• Additional requirements : Home equity loans are solely on the market as a second lien (which suggests you presumably can’t be mortgage free)
• Perks: If you enroll in autopay with a BMO Harris checking account, you’ll be eligible for a 0.5% cost low value.

Reasons to get a home equity mortgage

A home equity mortgage is an efficient choice do you have to need a huge sum of cash suddenly. You can use that cash for one thing you desire to — it doesn’t must be home-related. However, some makes use of make additional sense than others.

1. Home renovations and enhancements: If you want to enhance your kitchen, arrange picture voltaic panels or add on a second bathroom, you need to make the most of the money from a home equity mortgage to pay for the value of those renovations. Then, at tax time, you presumably can deduct the curiosity you pay on the mortgage — as long as the renovations enhance the value of your individual dwelling and in addition you meet positive IRS criteria.

2. Consolidating high-interest debt: Debt consolidation is a method the place you’re taking out one large mortgage to repay the balances on quite a few smaller loans, typically completed to streamline your funds or get a lower fee of curiosity. Because dwelling equity mortgage charges of curiosity are typically lower than these of financial institution playing cards, they may very well be a pleasant option to consolidate your high-interest financial institution card debt, letting you repay debt sooner and get financial financial savings on curiosity in the long run. The solely draw again? Credit card and personal mortgage lenders can not take your individual dwelling from you need to you stop making your funds, nonetheless dwelling equity lenders can. 

3. College tuition: Instead of using scholar loans to cowl the value of school in your self or a preferred one, you need to make the most of the cash from a home equity mortgage. If you qualify for federal scholar loans, though, they’re almost always a higher chance than a home equity mortgage. Federal loans have larger borrower protections and supply additional versatile reimbursement decisions throughout the event of financial hardship. But do you have to’ve maxed out your financial assist and federal scholar loans, a home equity mortgage may very well be a viable option to cowl the excellence.

4. Medical payments: You can avoid inserting sudden medical payments on a financial institution card by tapping into your individual dwelling equity sooner than a critical medical course of. Or, when you’ve got glorious medical funds, you presumably will pay them off with the funds from a home equity mortgage. Before you do this, it’s worth asking ought to you’ll be able to negotiate a value plan immediately alongside together with your medical provider.

5. Business payments: If you want to start a small enterprise or side hustle nonetheless lack money to get it going, a home equity mortgage can current the funding with out many hoops to leap by way of. However, you would uncover that devoted small enterprise loans are a higher, a lot much less harmful chance.

6. Down value on a second dwelling: Homeowners can leverage their dwelling’s equity to fund a down value on a second dwelling or funding property. But it’s finest to solely use a home equity mortgage to buy a second dwelling ought to you’ll be able to comfortably afford quite a few mortgage funds over the long term. 

Experts don’t advocate using a home equity mortgage for discretionary payments like a visit or wedding ceremony. Instead, try saving up money upfront for these payments so that you presumably will pay for them with out taking on pointless debt.

Pros and cons of a home equity mortgage

Home equity mortgage vs. HELOC

Home equity loans and HELOCs are associated nonetheless have a few key distinctions. Both assist you to draw by yourself dwelling’s equity and require you to utilize your individual dwelling as collateral to secure your mortgage. The two primary variations are the way in which through which you acquire the money and the way in which you pay it once more.

A home equity mortgage supplies you the money suddenly as a lump sum, whereas a HELOC lets you take money out in installments over an prolonged time-frame, typically 10 years. Home equity loans have fixed-rate funds that may in no way go up, nonetheless most HELOCs have variable charges of curiosity that rise and fall with the prime cost.

A home equity mortgage is more healthy if:

• You want a fixed-rate value: Your month-to-month value gained’t ever change even when charges of curiosity rise.
• You want one lump sum of money: You acquire your total mortgage upfront with a home equity mortgage.
• You know the exact sum of cash you need: If you notice the amount you need and don’t anticipate it to change, a home equity mortgage attainable makes additional sense than a HELOC.

A HELOC is more healthy if:

• You need money over an prolonged time-frame: You can take the money as you need it and solely pay curiosity on the portions you withdraw, not the entire mortgage amount, as is the case with a home equity mortgage.
• You want a low introductory fee of curiosity: Although HELOC fees would possibly enhance over time, moreover they often present lower introductory charges of curiosity than dwelling equity loans. So you will get financial financial savings on curiosity prices.

Home equity loans vs. cash-out refinances

A cash-out refinance is as soon as you modify your current mortgage with a model new mortgage, typically to secure a lower fee of curiosity and additional favorable phrases. Unlike a typical refinance, though, you’re taking out a model new mortgage for the home’s complete value — not merely the amount you owe in your mortgage. You then acquire the equity you’ve obtained already paid off in your own home as a cash payout.

For occasion, if your individual house is worth $450,000, and in addition you owe $250,000 in your mortgage, you’d refinance in your total $450,000, fairly than the amount you owe in your mortgage. Your new cash-out refinance dwelling mortgage would change your current mortgage after which offer you a portion of the equity you constructed (on this case $200,000) as a cash payout.

Both a cash-out refi and a home equity mortgage will give you a lump sum of cash that you just’re going to repay in fixed portions over a specific time interval, nonetheless they’ve some needed variations. A cash-out refinance replaces your current mortgage value. When you acquire a lump sum of cash from a cash-out refi, it’s added once more onto the stableness of your new mortgage, usually inflicting your month-to-month value to increase. A home equity mortgage is totally totally different — it might not change your current mortgage and instead supplies an additional month-to-month value to your payments.

Who qualifies for a home equity mortgage?

Although it varies by lender, to qualify for a home equity mortgage, you might be typically required to fulfill the following requirements:

• At least 15% to twenty% equity constructed up in your own home: Home equity is the amount of dwelling you private, primarily based totally on how loads you’ve paid in the direction of your mortgage. Subtract what you owe in your mortgage and totally different loans from the current appraised value of your property to find out your individual dwelling equity amount.
• Adequate, verifiable income and regular employment: Proof of income is an unusual requirement to qualify for a HELOC. Check your lender’s website online to see what varieties and paperwork you’ll must submit alongside alongside together with your utility.
• A minimal credit score rating ranking of 620: Lenders use your credit score rating ranking to search out out the possibility that you just’ll repay the mortgage on time. Having a strong credit score rating ranking — a minimal of 700 — will allow you qualify for a lower fee of curiosity and additional amenable mortgage phrases.
• A debt-to-income ratio of 43% or a lot much less: Divide your full month-to-month cash owed by your gross month-to-month income to get your DTI. Like your credit score rating ranking, your DTI helps lenders determine your functionality to make fixed funds in the direction of your mortgage. Some lenders select a DTI of 36% or a lot much less.

A home equity mortgage is more healthy if:

• You don’t want to pay private mortgage insurance coverage protection: Some cash-out refinances require PMI, which can add an entire lot of {{dollars}} to your funds, nonetheless dwelling equity loans don’t.
• You can not full a refinance: With fees rising, it’s attainable that your mortgage cost is lower than current refinance fees. If that’s the case, it attainable is not going to make financial sense with the intention to refinance. Instead, you need to make the most of a home equity mortgage to take out solely the money you need, fairly than altering your complete mortgage with the following fee of curiosity mortgage.

A cash-out refinance is more healthy if:

• Refinance fees are lower than your current mortgage cost: If you presumably can secure a lower fee of curiosity by refinancing, this would possibly forestall money in curiosity, whereas providing entry to a lump sum of cash. 
• You want only one month-to-month value: The amount you borrow will get added once more to the stableness of your mortgage so that you just make only one value to your lender every month.
• Less stringent eligibility requirements: If you do not need good credit score rating otherwise you’ve gotten a extreme debt-to-income ratio, or DTI, you would have a greater time qualifying for a cash-out refi in distinction with a home equity mortgage.
• Lower charges of curiosity: Cash-out refinances typically present additional favorable charges of curiosity than dwelling equity loans.

Tips for choosing a lender

You’ll want to ponder what sort of financial institution best suits your needs. In addition to mortgage lenders, financial institutions that present dwelling equity loans embody banks, credit score rating unions and online-only lenders.

“Select a lender that makes you feel comfortable and informed with the home equity loan process,” acknowledged Rob Cook, vice chairman of promoting, digital and analytics for Discover Home Loans. “Look at what tools a lender makes available to borrowers to help inform their decision. For many borrowers, being able to apply and manage their application online is important.”

One chance is to work with the lender that originated your first mortgage as you already have a relationship and a historic previous of on-time funds. Many banks and credit score rating unions moreover present discounted fees and totally different benefits as soon as you modify right into a purchaser.

Some lenders present lower charges of curiosity nonetheless value elevated fees (and vice versa). What points most is your annual share cost on account of it shows every fee of curiosity and fees.

Ensure the exact phrases of the mortgage your lender is offering make sense in your worth vary. For occasion, ensure the minimal mortgage amount isn’t too extreme — be cautious of withdrawing additional funds than you need. You moreover want to ensure that your reimbursement time interval is prolonged ample with the intention to comfortably afford the month-to-month funds. The shorter your mortgage time interval, the higher your month-to-month funds is perhaps.

“Costs and fees are an important consideration for anyone who is looking for a loan,” Cook acknowledged. “Homeowners should understand any upfront or ongoing fees applicable to their loan options. Also look for prepayment penalties that might be associated with paying off your loan early.” 

No matter what, it’s needed to talk to fairly just a few lenders and uncover the most effective cost on the market.

How to make use of for a home equity mortgage

Applying for a home equity mortgage is rather like making use of for any mortgage mortgage. You’ll need every a steady credit score rating ranking and proof of ample income to repay your mortgage.

1. Interview quite a few lenders to search out out which lender can provide the backside fees and fees. The additional companies you converse with, the upper your prospects of discovering primarily probably the most favorable phrases.

2. Have a minimal of 15% to twenty% equity in your own home. If you do, lenders will then take into account your credit score rating ranking, income and current DTI to search out out whether or not or not you qualify along with your fee of curiosity.

3. Be able to have financial paperwork on the ready, just like pay stubs and Form W-2s. Proof of possession and the appraised value of your individual dwelling might also be important.

4. Close in your mortgage. Once you submit your utility, the final word step is closing in your mortgage. In some states, you will have to do this in particular person at a bodily division.

FAQs

Methodology

We evaluated a variety of lenders primarily based totally on components just like charges of curiosity, APRs and fees, how prolonged the draw and reimbursement durations are, and what kinds and variety of loans are provided. We moreover took into consideration components that impression the particular person experience just like how simple it’s to make use of for a mortgage on-line and whether or not or not bodily lender locations exist.