Best Home Equity Loan Rates for May 2025

A home equity mortgage lets you borrow in 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 personal 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 regard to the advantages and downsides of dwelling equity loans, how they work and the place to hunt out top-of-the-line costs. Here’s what I’ve uncovered.

This week’s dwelling equity mortgage costs

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

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

Current dwelling equity mortgage costs and developments

Since March 2022, the Federal Reserve has elevated borrowing costs by climbing its benchmark cost in an attempt to carry inflation down. As inflation cooled, the Federal Reserve paused its cost hikes nonetheless dwelling equity mortgage costs 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 develop into a popular completely different for borrowing, since they carry lower charges of curiosity than completely different types of loans. One major draw of a home equity mortgage is that house owners 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,” said Vikram Gupta, head of dwelling equity at PNC Bank.

Best dwelling equity mortgage costs of May 2025

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

Comparing top-of-the-line 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 offers 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 get hold of a 0.5% cost low price 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 offers 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 contains a calculator that may let you recognize the utmost amount you probably can borrow primarily based totally on the info you enter. You may even see a full breakdown of costs, costs and month-to-month funds. No credit score rating confirm is required for this service.

• APR : From 7.99% (0.25% autopay low price 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 greater than $500,000.
• Additional requirements : Loan portions decrease than $25,000 could be discovered only for major residence property use.
• Perks: You will get hold of a 0.25% low price must you enroll in autopay from a TD personal checking or monetary financial savings account.

Connexus Credit Union

Good division group

Connexus Credit Union operates in all 50 states, nonetheless it offers dwelling equity loans and HELOCs in 46 states (excluding Alaska, Hawaii, Maryland and Texas). The credit score rating union has better than 6,000 native branches. To apply for a home equity mortgage or HELOC with Connexus, you probably 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 fluctuate from $175 to $2,000, relying in your mortgage phrases and property location. It has returned mortgage funds costs of $15, consolation costs 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 definitely one in all Connexus’s affiliate groups, reside in one in all 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 selections

KeyBank

Good on-line utility particular person experience

Based in Cleveland, KeyBank offers dwelling equity loans to shoppers in 15 states and HELOCs to shoppers in 44 states. Aside from an bizarre dwelling equity mortgage, KeyBank offers a few utterly completely different HELOC selections. The KeyBank utility means which you could apply for a lot of merchandise at one time. If you’re undecided whether or not or not KeyBank loans could be present in your area, the making use of will let you recognize while you enter your ZIP code. If you’re an current KeyBank purchaser, you probably can skim by way of the making use of and import your personal information out of your account.

• APR: From 9.59% (0.25% shopper low price 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 all many states KeyBank operates in.
• Perks: KeyBank offers a 0.25% cost low price for purchasers who’ve eligible checking and monetary financial savings accounts with them.

Spring EQ

Good risk for prime debt-to-income ratio limits

Spring EQ was primarily based in 2016 and serves shoppers in 38 states. Spring EQ offers dwelling equity loans and HELOCs. Spring EQ doesn’t present costs for its dwelling lending merchandise on-line — you possibly can full an utility to see your personalised cost. The Spring EQ mortgage utility course of is simple though. Customers can see an in depth breakdown of their mortgage time interval and cost selections 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 may be matter to an origination cost of $995 and an annual cost of $99 in some states.
• Additional requirements : Spring EQ doesn’t present costs for its dwelling lending merchandise on-line — you possibly can full an utility to see your personalised cost.
• Perks: Spring EQ has the subsequent most DTI ratio than most completely different lenders — consider 50% with the usual 43% frequent.

Third Federal Savings & Loan

Good risk for cost match guarantee

Third Federal Savings & Loan first opened in 1938. Today, the monetary establishment offers dwelling equity loans in eight states and HELOCs in 26 states. Third Federal offers a lowest cost guarantee on its HELOCs and residential equity loans, which implies Third Federal gives you the underside charge of curiosity relative to completely different associated lenders or pay you $1,000. You can apply for a home equity mortgage or HELOC on the Third Federal site. 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 should not any utility costs, closing costs or origination costs.
• 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 price.

Frost Bank

Good risk 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 site, nonetheless you’ll must create an account. According to the site, the making use of will solely take you quarter-hour.

• APR : From 7.32% (0.25% autopay low price 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 price a $15 month-to-month service cost, which is likely to be 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 price for purchasers who enroll in autopay from a Frost Bank checking or monetary financial savings account. However, this perform is simply on the market for second liens.

Regions Bank

Good for low costs

Regions Bank is among the many nation’s largest banking, mortgage and wealth administration service suppliers. Regions offers 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, it’s best to make the most of the monetary establishment’s private cost calculator to estimate your cost and month-to-month price.

• APR : From 6.75% to 14.125%(0.25% autopay low price 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 costs. Late costs apply for 5% of the fee amount.
• Additional requirements : Not specified.
• Perks: This lender pays all closing costs for dwelling equity loans.

Discover

Good risk for no costs or closings costs

Discover is assumed primarily for its financial institution playing cards, nonetheless it moreover offers 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 site.

• 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 costs, utility costs, appraisal costs or mortgage taxes.

BMO Harris

Good risk for second liens

BMO Harris companies and merchandise could be present in 48 states (all nonetheless New York and Texas). BMO Harris offers 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 costs, you’ll have to speak with a advisor on the cellphone. Getting personalised costs 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 may be a better risk.

• APR : From 8.97% (0.5% autopay low price 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 may 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 possibly can be accountable for recoupment costs.
• Additional requirements : Home equity loans are solely on the market as a second lien (which implies you probably 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 price.

Reasons to get a home equity mortgage

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

1. Home renovations and enhancements: If you want to enhance your kitchen, arrange photograph voltaic panels or add on a second rest room, it’s best to make the most of the money from a home equity mortgage to pay for the worth of those renovations. Then, at tax time, you probably can deduct the curiosity you pay on the mortgage — as long as the renovations enhance the price of your individual dwelling and in addition you meet positive IRS criteria.

2. Consolidating high-interest debt: Debt consolidation is a way the place you’re taking out one large mortgage to repay the balances on a lot of smaller loans, typically completed to streamline your funds or get a lower charge of curiosity. Because dwelling equity mortgage charges of curiosity are typically lower than these of financial institution playing cards, they might 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 it’s best to you stop making your funds, nonetheless dwelling equity lenders can. 

3. College tuition: Instead of using scholar loans to cowl the worth of school in your self or a preferred one, it’s best 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 better risk than a home equity mortgage. Federal loans have greater borrower protections and supply further versatile reimbursement selections throughout the event of financial hardship. But must you’ve maxed out your financial assist and federal scholar loans, a home equity mortgage might be a viable option to cowl the excellence.

4. Medical payments: You can avoid putting 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 wonderful medical funds, you probably pays them off with the funds from a home equity mortgage. Before you do this, it’s worth asking ought to you may negotiate a price plan immediately alongside along with your medical provider.

5. Business payments: If you want to start a small enterprise or facet 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 possibly can uncover that devoted small enterprise loans are a better, a lot much less harmful risk.

6. Down price on a second dwelling: Homeowners can leverage their dwelling’s equity to fund a down price on a second dwelling or funding property. But it’s greatest to solely use a home equity mortgage to buy a second dwelling ought to you may comfortably afford a lot of 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 probably pays 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 let you draw by yourself dwelling’s equity and require you to utilize your individual dwelling as collateral to secure your mortgage. The two major variations are the way in which through which you get hold of the money and the way in which you pay it once more.

A home equity mortgage offers you the money unexpectedly as a lump sum, whereas a HELOC lets you take money out in installments over an prolonged timeframe, typically 10 years. Home equity loans have fixed-rate funds that may certainly not 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 price: Your month-to-month price received’t ever change even when charges of curiosity rise.
• You want one lump sum of money: You get hold of your complete mortgage upfront with a home equity mortgage.
• You know the exact sum of cash you need: If you understand the amount you need and don’t anticipate it to change, a home equity mortgage attainable makes further sense than a HELOC.

A HELOC is more healthy if:

• You need money over an prolonged timeframe: You can take the money as you need it and solely pay curiosity on the portions you withdraw, not the whole mortgage amount, as is the case with a home equity mortgage.
• You want a low introductory charge of curiosity: Although HELOC costs would possibly enhance over time, moreover they generally present lower introductory charges of curiosity than dwelling equity loans. So you may 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 charge of curiosity and additional favorable phrases. Unlike a typical refinance, though, you’re taking out a model new mortgage for the home’s whole value — not merely the amount you owe in your mortgage. You then get hold of the equity you’ve acquired already paid off in your 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 complete $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 simply’re going to repay in mounted portions over a specific time interval, nonetheless they’ve some mandatory variations. A cash-out refinance replaces your current mortgage price. When you get hold of 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 price to increase. A home equity mortgage is totally completely different — it might not change your current mortgage and in its place offers an additional month-to-month price 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 subsequent requirements:

• At least 15% to twenty% equity constructed up in your home: Home equity is the amount of dwelling you private, primarily based totally on how lots you’ve paid in direction of your mortgage. Subtract what you owe in your mortgage and completely different loans from the current appraised value of your private home to find out your individual dwelling equity amount.
• Adequate, verifiable income and regular employment: Proof of income is an bizarre requirement to qualify for a HELOC. Check your lender’s site to see what varieties and paperwork you’ll must submit alongside alongside along with your utility.
• A minimal credit score rating ranking of 620: Lenders use your credit score rating ranking to search out out the prospect that you just’ll repay the mortgage on time. Having a sturdy credit score rating ranking — a minimal of 700 — will allow you qualify for a lower charge 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 resolve your functionality to make fixed funds in 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 a complete lot of {{dollars}} to your funds, nonetheless dwelling equity loans don’t.
• You can not full a refinance: With costs rising, it’s attainable that your mortgage cost is lower than current refinance costs. If that’s the case, it attainable is not going to make financial sense to be able to refinance. Instead, it’s best to make the most of a home equity mortgage to take out solely the money you need, fairly than altering your whole mortgage with the subsequent charge of curiosity mortgage.

A cash-out refinance is more healthy if:

• Refinance costs are lower than your current mortgage cost: If you probably can secure a lower charge 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 price: The amount you borrow will get added once more to the stableness of your mortgage so that you simply make only one price to your lender every month.
• Less stringent eligibility requirements: If you shouldn’t have good credit score rating otherwise you’ve gotten a extreme debt-to-income ratio, or DTI, you possibly can have a greater time qualifying for a cash-out refi in distinction with a home equity mortgage.
• Lower charges of curiosity: Cash-out refinances usually present further 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,” said 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 risk 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 costs and completely different benefits as soon as you modify right into a purchaser.

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

Ensure the exact phrases of the mortgage your lender is offering make sense in your worth vary. For occasion, be sure that the minimal mortgage amount is just not too extreme — be cautious of withdrawing further funds than you need. You moreover want to ensure that your reimbursement time interval is prolonged adequate to be able to comfortably afford the month-to-month funds. The shorter your mortgage time interval, the higher your month-to-month funds is likely to be.

“Costs and fees are an important consideration for anyone who is looking for a loan,” Cook said. “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 mandatory to talk to fairly just a few lenders and uncover top-of-the-line 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 adequate income to repay your mortgage.

1. Interview a lot of lenders to search out out which lender can provide the backside costs and costs. The further companies you converse with, the upper your prospects of discovering basically probably the most favorable phrases.

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

3. Be able to have financial paperwork on the ready, much like pay stubs and Form W-2s. Proof of possession and the appraised value of your individual dwelling may 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 try this in particular person at a bodily division.

FAQs

Methodology

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