Who Offers the Best Home Equity Loan Rates?

Active senior man walking his dog after looking into home equity loan rates.

Tap into your home equity

home equity cta - Who Offers the Best Home Equity Loan Rates?

If you have a large expense coming in your near future and no cash handy to pay it with, then you may want to consider taking out a home equity loan. These versatile loans can be used to pay for any kind of expense, and the interest that is charged on these loans may even be tax-deductible for borrowers who are able to itemize deductions on their tax returns.


Introduction to Home Equity Loans

Home equity loans are essentially second mortgages. They function in exactly the same manner as a primary mortgage, with a fixed interest rate and fixed monthly payment that must be made until the loan has been repaid. The rate that is assessed to the borrower is determined by the borrower’s credit score, the size of the loan and the borrower’s home value.

Home equity loans are often used to pay for items such as credit card debt, home improvements, the purchase or repair of a vehicle or a special event such as a vacation or wedding.

  • There is virtually no limit as to what these loans can be used for. And they may be easier home loans to get than going through the process for a cash-out refinance.
  • They are also usually cheaper than personal loans or other high-interest debt because they charge a lower interest rate.

Of course, home equity is simply the amount of your house that has been paid off. If you have a house that is worth $300,000 and a remaining mortgage balance of $100,000, then you have $200,000 of equity in your home. This is the amount against which you can take out a home equity loan or home equity line of credit. The amount of equity in your home can rise and fall with the value of your home in the open market.

  • This variability created an unpleasant surprise for many homeowners who had second liens on their homes during the Subprime Mortgage Meltdown of 2008. The drop in home values left thousands of homeowners upside down on their home loans, owing more than their homes were worth. It took some of them many years to recover from this debacle.

Needless to say, this mess caused a steep drop in the number of home equity loans that were taken out. But conditions have improved dramatically since then, and home values have been on the rise for the past several years. Homeowners today may benefit from a home equity loan because interest rates have started to go back up again.

Locking in a home equity loan now allows borrowers to access funds at a cheaper rate than they will pay for most any other type of credit, such as credit cards, personal loans or student loans. If you’re a homeowner looking for a source of cash, don’t wait for interest rates to rise again before you apply for this type of loan.


Home Equity Loans VS. HELOCs

Home equity loans and HELOCs are fundamentally different types of loans.

  • With a home equity loan, the borrower receives the full amount of the loan up front in a lump sum of cash. The borrower must then begin making payments on the full amount of the loan plus interest from the beginning.
  • A home equity line of credit is simply a line of credit that the borrower can access whenever they wish. Borrowers only have to make payments on the amount that they actually withdraw, not the maximum amount of the line of credit.

Group of friends hiking through the woods celebrating that they found the best home equity loan rates.

HELOCs are divided up into two periods. The draw period is the first period, and this is the period when the borrower can withdraw funds against the credit line. The repayment period is the period during which the borrower must repay the interest and principal of the amount that was withdrawn.

Many HELOC lenders allow borrowers to make interest-only payments during the draw period. Helocs are more appropriate for people who will need money on a periodic basis, such as to pay for college tuition on a yearly basis.

Unlike home equity loans, HELOCs also charge a variable rate of interest. This variable interest rate will rise and fall in tandem with interest rates in the market. The interest rates for both HELOCs and home equity loans are often tied to the Prime Rate or the Fed Funds Rate. But the interest rates for HELOCs will continue to adjust based on current market rates.


Best Home Equity Loan Rates

Borrowers today have more choices than ever when it comes to choosing a home equity loan. Both large and small home equity lenders offer these loans with varying terms and unique incentives designed to reward borrowers for choosing them. There may never be a better time for you to get one of these loans. Here is a list of some of the best rates that are available on home equity loans in 2019.

Alliant Home Equity Loan Rates.

This credit union offers home equity loans at rates as low as 4.45% to a maximum rate of 6.25% with terms lasting from 5 to 30 years. The maximum loan-to-value ratio is 90%. Their current rates are broken down as follows:

First Lien

Terms from 12 to 60 Months

  • Loan Amount           APR as low as
  • $10,000 – $24,999        4.95%
  • $25,000 – $49,999       4.59%
  • $50,000 – $99,999       4.29%
  • $100,000 – $249,999   4.16%

Terms from 61 to 120 Months

  • Loan Amount            APR as low as
  • $10,000 – $24,999        5.05%
  • $25,000 – $49,999       4.74%
  • $50,000 – $99,999       4.47%
  • $100,000 – $249,999   4.35%

Terms from 121 to 180 Months

  • Loan Amount           APR as low as
  • $10,000 – $24,999        5.12%
  • $25,000 – $49,999       4.83%
  • $50,000 – $99,999       4.56%
  • $100,000 – $249,999   4.45%

Terms from 181 to 240 Months

  • Loan Amount           APR as low as
  • $10,000 – $24,999         N/A
  • $25,000 – $49,999       4.97%
  • $50,000 – $99,999       4.70%
  • $100,000 – $249,999   4.60%

Terms from 241 to 360 Months

  • Loan Amount           APR as low as
  • $10,000 – $24,999         N/A
  • $25,000 – $49,999        N/A
  • $50,000 – $99,999       4.90%
  • $100,000 – $249,999   4.79%

Interest rates for second liens start at 5.17% and go up to 6.21%. There is an origination fee of $125, and the loan size for either type of lien must be at least $10,000.


third federal home equity loan - Who Offers the Best Home Equity Loan Rates?

This savings and loan institution offers home equity loans that have both fixed and adjustable interest rates. Their fixed rates are as low as 4.87% APR, and their highest rate is 5.49% APR. Loan sizes range from $10,000 to $200,000, and the maximum loan-to-value ratio is 80%.


connexus home equity loan - Who Offers the Best Home Equity Loan Rates?

This credit union offers home equity loan rates as low as 4.49% with an APR of 4.615%. Terms can last from 5 to 20 years with a maximum loan-to-value ratio of 90%.


Navy Federal best home equity loan rates.

This financial institution offers home equity loans with rates ranging from 5.75% APR to 9.88% APR depending on various factors, such as the term and the size of the loan and the value of your home. Terms last from 5 to 20 years, and the maximum combined LTV ratio is 100% in some cases.


PenFed home equity loan rates.

This financial institution offers a range of rates that vary according to certain criteria, such as the loan size, the borrower’s creditworthiness and the LTV ratio. Loan amounts can be from $10,000 to $400,000 with a maximum term of 20 years. Their rates are broken down as follows:

Owner Occupied Homes: 80% or Less Loan to Value

  • MONTH           APR      APPROX. PYMT
  • ($25,000)
  • 60 Months      5.34%       $475.68
  • 120 Months     5.59%       $272.43
  • 180 Months     5.84%       $208.81
  • 240 Months    6.09%       $180.41

Owner Occupied Homes: 80.01% – 85% Loan to Value

  • MONTH           APR      APPROX. PYMT
  • ($25,000)
  • 60 months      5.59%       $478.57
  • 120 months     6.09%       $278.68
  • 180 months     6.34%       $215.58
  • 240 months    6.84%       $191.43

Owner Occupied Homes: 85.01% – 90% Loan to Value

  • MONTH           APR      APPROX. PMT
  • ($25,000)
  • 60 Months      6.09%       $484.37
  • 120 Months     6.59%       $285.02
  • 180 Months     6.84%       $222.48
  • 240 Months    7.34%       $198.96

Non-Owner Occupied Homes: 80% or Less Loan to Value

  • MONTH           APR      APPROX. PMT
  • ($25,000)
  • 60 months      7.24%       $497.87
  • 144 months     7.24%       $260.30

Tap into your home equity

home equity cta - Who Offers the Best Home Equity Loan Rates?

bbt home equity loan - Who Offers the Best Home Equity Loan Rates?

Brotherhood Bank and Trust doesn’t publish the exact rates it charges its borrowers, but they are competitive with other major banks and they do not charge an appraisal fee. It also gives borrowers flexible repayment options, and there is no prepayment penalty.


discover home equity loan - Who Offers the Best Home Equity Loan Rates?

This lender offers home equity loans with introductory rates starting at 4.99% APR and going up to  to 11.99% APR. Terms can last from 10 to 30 years, and it does not charge its borrowers anything for closing costs or application fees.


BMO Harris Bank home equity loan rates.

This bank gives rate quotes based on the borrower’s state of residence, the loan amount and term. A Kansas resident who applies for a home equity loan will pay a rate between 5.24% APR and 6.49% APR, depending upon the size of the loan and the term, which ranges from 5 to 20 years in 5-year increments.


Spring EQ home equity loan rates.

This lender does not publish its exact rates on its website, but they are competitive with other major lenders. Their terms can last as long as 30 years and the maximum loan-to-value ratio goes as high as 100% in some cases.


citibank home equity loan - Who Offers the Best Home Equity Loan Rates?

This bank has terms for its home equity loans of 5, 10, 15, 20, 25 and 30 years. It doesn’t publish specific rates on its website or offer a teaser rate like many other banks. However, their rate calculator shows that for a borrower living in Kansas, a $100,000 home equity loan taken out against a house worth $300,000 with a first mortgage balance of $100,000 will charge the borrower a rate of 6.59% APR for a 5 year loan, a rate of 6.69% APR for a 15 year loan and a rate of 6.79% APR for a 30 year loan. Citibank offers home equity loans ranging from $25,000 to $300,000.


TD Bank home equity loan rates.

This bank also doesn’t publish its home equity loan rates on its website. But its rate calculator shows that a $100,000 home equity loan taken out on a home worth $300,000 with a first mortgage of $100,000 will charge the borrower an interest rate of 4.70% APR for a term of 15 years. TD Bank customers who set up an automatic payment plan using their checking or savings account can also earn an additional discount of 0.25%. There is a $99 origination fee but no annual fees.


citizens bank home equity loan - Who Offers the Best Home Equity Loan Rates?

This bank doesn’t list its interest rates for home equity loans on its homepage, but its home equity loan page contains a range of interest rates depending upon the size and term of the loan. However, only borrowers who live in one of the areas that they service can access this part of the website.


pnc home equity loan - Who Offers the Best Home Equity Loan Rates?

This bank also doesn’t publish its home equity loan rates on its website, but its loan terms can last for up to 30 years, and borrowers who set up an automatic payment plans with a PNC Bank checking account will get an additional 0.25% APR discount. They do not charge an application fee, and there is usually no appraisal fee either. Minimal closing costs are charged at closing.

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mark cussen - Who Offers the Best Home Equity Loan Rates?

Mark Cussen is a financial counselor with more than 13 years of experience and has professional designations as a CFP®, CMFC and AFC. Mark has worked in all segments of the financial industry from investment management to mortgage loan origination, life insurance and annuities, financial planning and income tax preparation. He currently works with the U.S. military, helping service members transition financially into civilian life and in other capacities. Mark also sells life insurance and annuities on the side. He graduated from the University of Kansas with a Bachelor’s degree in English.