Best Home Equity Loan Rates for May 2025

A house fairness mortgage helps you to borrow towards your own home fairness, which is the distinction between your own home’s market worth and the remaining steadiness in your mortgage. Like dwelling fairness traces of credit score (HELOCs), dwelling fairness loans are secured by collateral: your own home.

In normal, dwelling fairness loans are likely to have decrease rates of interest than private loans or bank cards. That’s as a result of dwelling fairness loans are secured debt, which makes them much less dangerous for the lender. The draw back is that should you miss funds, you danger dropping your own home.

I’ve spoken with specialists in regards to the benefits and drawbacks of dwelling fairness loans, how they work and the place to seek out one of the best charges. Here’s what I’ve uncovered.

This week’s dwelling fairness mortgage charges

Here are the common charges for dwelling fairness loans and residential fairness traces of credit score as of May 14, 2025.

Note: These charges come from a survey carried out by Bankrate. The averages are decided from a survey of the highest 10 banks within the prime 10 US markets.

Current dwelling fairness mortgage charges and developments

Since March 2022, the Federal Reserve has elevated borrowing prices by climbing its benchmark charge in an try and carry inflation down. As inflation cooled, the Federal Reserve paused its charge hikes however dwelling fairness mortgage charges remained excessive for debtors. Now that the Fed has began to chop rates of interest once more, the borrowing value for monetary merchandise like dwelling fairness loans and HELOCs ought to start falling.

Over the previous three years, dwelling fairness loans have change into a well-liked different for borrowing, since they carry decrease rates of interest than different forms of loans. One main draw of a house fairness mortgage is that owners can leverage their dwelling’s fairness 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,” stated Vikram Gupta, head of dwelling fairness at PNC Bank.

Best dwelling fairness mortgage charges of May 2025

Note: The above annual share charges are present as of Feb. 4, 2025. Your APR will rely upon such elements as your credit score rating, revenue, mortgage time period and whether or not you enroll in autopay or different lender particular necessities.

Comparing one of the best dwelling fairness mortgage lenders of May 2025

U.S. Bank

Good for nationwide availability

U.S. Bank is the fifth largest banking establishment within the US. It provides each dwelling fairness loans and HELOCs in 47 states. You can apply for a house fairness mortgage or HELOC via a web-based utility, by cellphone or in individual. If you need a mortgage estimate for a house fairness mortgage with out finishing a full utility, you may get one by talking 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 : 660
• Loan quantity : $15,000 to $750,000 (as much as $1 million for California properties)
• Term lengths : Up to 30 years
• Fees : None
• Additional necessities : Subject to credit score approval
• Perks: You can obtain a 0.5% charge low cost by enrolling in automated funds from a U.S. Bank checking or financial savings account.

TD Bank

Good for value transparency

Primarily working on the East Coast, TD Bank provides dwelling fairness loans and HELOCs in 15 states. You can apply for a TD Bank dwelling fairness mortgage or HELOC on-line, by cellphone or by visiting a TD Bank in individual. The on-line utility features a calculator that can let you know the utmost quantity you possibly can borrow based mostly on the data you enter. You can even see a full breakdown of charges, charges and month-to-month funds. No credit score verify is required for this service.

• APR : From 7.99% (0.25% autopay low cost included)
• Max LTV ratio : Not specified
• Max debt-to-income ratio : Not specified
• Min credit score rating : Not specified
• Loan quantity : From $10,000
• Term lengths : Five to 30 years
• Fees : $99 origination charge at closing. Closing prices solely utility to mortgage quantities higher than $500,000.
• Additional necessities : Loan quantities lower than $25,000 can be found just for main residence property use.
• Perks: You will obtain a 0.25% low cost should you enroll in autopay from a TD private checking or financial savings account.

Connexus Credit Union

Good department community

Connexus Credit Union operates in all 50 states, however it provides dwelling fairness loans and HELOCs in 46 states (excluding Alaska, Hawaii, Maryland and Texas). The credit score union has greater than 6,000 native branches. To apply for a house fairness mortgage or HELOC with Connexus, you possibly can fill out a three-step utility on-line or in individual. You gained’t be capable of see a personalised charge or product phrases with out a credit score verify.

• APR : From 7.31%
• Max LTV ratio: 90%
• Max-debt-to-income ratio : Not specified
• Min credit score rating : Not specified
• Loan quantity : From $5,000
• Term lengths : Five to fifteen years
• Fees : No annual charge. Closing prices can vary from $175 to $2,000, relying in your mortgage phrases and property location. It has returned mortgage funds charges of $15, comfort charges of $9.95 (for paying by debit or bank card on-line) and $14.95 (for paying by cellphone) and a pressured place insurance coverage processing charge of $12.
• Additional necessities: Because Connexus is a credit score union, its services and products are solely out there to members. Member eligibility is open to most individuals: you (or a member of the family) simply should be a member of certainly one of Connexus’s associate teams, reside in one of many communities or counties on Connexus’s checklist or change into a member of the Connexus Association with a $5 donation to Connexus’s associate nonprofit.
• Perks: Flexible membership choices

KeyBank

Good on-line utility person expertise

Based in Cleveland, KeyBank provides dwelling fairness loans to clients in 15 states and HELOCs to clients in 44 states. Aside from an ordinary dwelling fairness mortgage, KeyBank provides a couple of completely different HELOC choices. The KeyBank utility means that you can apply for a number of merchandise at one time. If you’re undecided whether or not KeyBank loans can be found in your space, the applying will let you know when you enter your ZIP code. If you’re an present KeyBank buyer, you possibly can skim via the applying and import your private data out of your account.

• APR: From 9.59% (0.25% shopper low cost included)
• Max LTV ratio : 80% for traditional dwelling fairness loans, 90% for high-value dwelling fairness loans
• Max debt-to-income ratio : Not specified
• Min credit score rating : Not specified
• Loan quantity : From $25,000
• Term lengths : One to 30 years
• Fees : Origination charge of $295. Closing prices aren’t specified.
• Additional necessities: Borrowers should be a minimum of 18 years of age and reside in one of many states KeyBank operates in.
• Perks: KeyBank provides a 0.25% charge low cost for purchasers who’ve eligible checking and financial savings accounts with them.

Spring EQ

Good possibility for top debt-to-income ratio limits

Spring EQ was based in 2016 and serves clients in 38 states. Spring EQ provides dwelling fairness loans and HELOCs. Spring EQ doesn’t show charges for its dwelling lending merchandise on-line — you could full an utility to see your personalised charge. The Spring EQ mortgage utility course of is easy although. Customers can see an in depth breakdown of their mortgage time period and charge choices with no need to bear a credit score verify or present their Social Security quantity.

• APR: Not specified
• Max LTV ratio : 90%
• Max debt-to-income ratio : 50%
• Min credit score rating : 640
• Loan quantity : Up to $500,000
• Term lengths : Not specified
• Fees : Spring EQ loans could also be topic to an origination charge of $995 and an annual charge of $99 in some states.
• Additional necessities : Spring EQ doesn’t show charges for its dwelling lending merchandise on-line — you could full an utility to see your personalised charge.
• Perks: Spring EQ has the next most DTI ratio than most different lenders — evaluate 50% with the standard 43% common.

Third Federal Savings & Loan

Good possibility for charge match assure

Third Federal Savings & Loan first opened in 1938. Today, the financial institution provides dwelling fairness loans in eight states and HELOCs in 26 states. Third Federal provides a lowest charge assure on its HELOCs and residential fairness loans, which means Third Federal will give you the bottom rate of interest relative to different related lenders or pay you $1,000. You can apply for a house fairness mortgage or HELOC on the Third Federal web site. You gained’t should register an account to use, however you’re nonetheless in a position to save 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 : Not specified
• Loan quantity : $10,000 to $200,000
• Term size s: Five to 30 years
• Fees : Home fairness loans and HELOCs with Third Federal have an annual charge of $65 (waived the primary 12 months). There are not any utility charges, closing charges or origination charges.
• Additional necessities : Specific necessities aren’t listed.
• Perks : If you arrange autopay from an present Third Federal account, you’ll be eligible for a 0.25% charge low cost.

Frost Bank

Good possibility for Texas debtors

Frost Bank’s dwelling fairness loans and HELOCs are solely out there to Texas residents. You can apply for a house fairness mortgage or HELOC on the Frost Bank web site, however you’ll have to create an account. According to the web site, the applying will solely take you quarter-hour.

• APR : From 7.32% (0.25% autopay low cost included, solely out there for 2nd liens)
• Max LTV ratio : 90%
• Max debt-to-income ratio : Not specified
• Min credit score rating : Not specified
• Loan quantity : $2,000 to $500,000
• Term lengths : 15 or 20 years
• Fees : No utility charge, annual charge or closing prices. Frost Bank does cost a $15 month-to-month service charge, which might be waived with a Frost Plus Account.
• Additional necessities : Borrowers should reside in Texas. The financial institution additionally requires proof of house owners insurance coverage.
• Perks: 0.25% charge low cost for purchasers who enroll in autopay from a Frost Bank checking or financial savings account. However, this function is just out there for second liens.

Regions Bank

Good for low charges

Regions Bank is among the nation’s largest banking, mortgage and wealth administration service suppliers. Regions provides dwelling fairness loans and HELOCs in 15 states. You can apply for a Regions dwelling fairness mortgage or HELOC on-line, in individual or over the cellphone. You’ll should create an account with Regions to use. Before you create an account, although, you should utilize the financial institution’s personal charge calculator to estimate your charge and month-to-month cost.

• APR : From 6.75% to 14.125%(0.25% autopay low cost included)
• Max LTV ratio : 89%
• Max debt-to-income ratio : Not specified
• Min credit score rating : Not specified
• Loan quantity : $10,000 to $250,000
• Term lengths : Seven, 10, 15, 20 or 30 years
• Fees : No closing prices and no annual charges. Late charges apply for five% of the cost quantity.
• Additional necessities : Not specified.
• Perks: This lender pays all closing prices for dwelling fairness loans.

Discover

Good possibility for no charges or closings prices

Discover is thought primarily for its bank cards, however it additionally provides dwelling fairness loans — out there in 48 states. The lender doesn’t provide HELOCs in any respect. You can apply for a house fairness mortgage from Discover on-line or over the cellphone. The utility course of takes roughly six to eight weeks in complete, in response to Discover’s web 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 : 680
• Loan quantity : $35,000 to $500,000
• Term lengths : 10, 15, 20 and 30 years
• Fees : None
• Additional necessities : Specific necessities not listed.
• Perks: The lender costs no origination charges, utility charges, appraisal charges or mortgage taxes.

BMO Harris

Good possibility for second liens

BMO Harris services and products can be found in 48 states (all however New York and Texas). BMO Harris provides dwelling fairness loans and three variations of a HELOC. You can apply for a house fairness mortgage or HELOC on-line or in individual, however so as to get personalised charges, you’ll have to talk with a consultant on the cellphone. Getting personalised charges doesn’t require a tough credit score verify.

Home fairness loans from BMO Harris are solely out there as second liens. If you’ve gotten already paid off your mortgage, a rate-lock HELOC from BMO Harris could also be a greater possibility.

• APR : From 8.97% (0.5% autopay low cost not included)
• Max LTV ratio : Not specified
• Max debt-to-income ratio : Not specified
• Min credit score rating : 700
• Loan quantity : From $5,000
• Term lengths : Five to twenty years
• Fees : There is not any utility charge. BMO Harris may also pay closing prices for loans secured by an owner-occupied 1-to-4-family residence. If you repay your mortgage inside 36 months of opening, you could be accountable for recoupment charges.
• Additional necessities : Home fairness loans are solely out there as a second lien (which means you possibly 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% charge low cost.

Reasons to get a house fairness mortgage

A house fairness mortgage is an effective selection should you want a big sum of money all of sudden. You can use that money for something you would like — it doesn’t should be home-related. However, some makes use of make extra sense than others.

1. Home renovations and enhancements: If you wish to improve your kitchen, set up photo voltaic panels or add on a second toilet, you should utilize the cash from a house fairness mortgage to pay for the price of these renovations. Then, at tax time, you possibly can deduct the curiosity you pay on the mortgage — so long as the renovations improve the worth of your own home and also you meet sure IRS criteria.

2. Consolidating high-interest debt: Debt consolidation is a technique the place you’re taking out one giant mortgage to repay the balances on a number of smaller loans, sometimes finished to streamline your funds or get a decrease rate of interest. Because dwelling fairness mortgage rates of interest are sometimes decrease than these of bank cards, they could be a nice choice to consolidate your high-interest bank card debt, letting you repay debt sooner and get monetary savings on curiosity in the long term. The solely draw back? Credit card and private mortgage lenders cannot take your own home from you should you cease making your funds, however dwelling fairness lenders can. 

3. College tuition: Instead of utilizing scholar loans to cowl the price of faculty for your self or a liked one, you should utilize the money from a house fairness mortgage. If you qualify for federal scholar loans, although, they’re nearly at all times a greater possibility than a house fairness mortgage. Federal loans have higher borrower protections and provide extra versatile reimbursement choices within the occasion of economic hardship. But should you’ve maxed out your monetary help and federal scholar loans, a house fairness mortgage could be a viable choice to cowl the distinction.

4. Medical bills: You can keep away from placing sudden medical bills on a bank card by tapping into your own home fairness earlier than a serious medical process. Or, when you have excellent medical payments, you possibly can pay them off with the funds from a house fairness mortgage. Before you do that, it’s value asking should you can negotiate a cost plan instantly along with your medical supplier.

5. Business bills: If you wish to begin a small enterprise or aspect hustle however lack cash to get it going, a house fairness mortgage can present the funding with out many hoops to leap via. However, you could discover that devoted small enterprise loans are a greater, much less dangerous possibility.

6. Down cost on a second dwelling: Homeowners can leverage their dwelling’s fairness to fund a down cost on a second dwelling or funding property. But it’s best to solely use a house fairness mortgage to purchase a second dwelling should you can comfortably afford a number of mortgage funds over the long run. 

Experts do not advocate utilizing a house fairness mortgage for discretionary bills like a trip or marriage ceremony. Instead, attempt saving up cash upfront for these bills so you possibly can pay for them with out taking up pointless debt.

Pros and cons of a house fairness mortgage

Home fairness mortgage vs. HELOC

Home fairness loans and HELOCs are related however have a couple of key distinctions. Both allow you to draw on your own home’s fairness and require you to make use of your own home as collateral to safe your mortgage. The two main variations are the way in which you obtain the cash and the way you pay it again.

A house fairness mortgage provides you the cash all of sudden as a lump sum, whereas a HELOC helps you to take cash out in installments over an extended time frame, sometimes 10 years. Home fairness loans have fixed-rate funds that can by no means go up, however most HELOCs have variable rates of interest that rise and fall with the prime charge.

A house fairness mortgage is healthier if:

• You need a fixed-rate cost: Your month-to-month cost won’t ever change even when rates of interest rise.
• You need one lump sum of cash: You obtain your entire mortgage upfront with a house fairness mortgage.
• You know the precise sum of money you want: If you realize the quantity you want and do not anticipate it to alter, a house fairness mortgage possible makes extra sense than a HELOC.

A HELOC is healthier if:

• You want cash over an extended time frame: You can take the cash as you want it and solely pay curiosity on the quantities you withdraw, not the complete mortgage quantity, as is the case with a house fairness mortgage.
• You need a low introductory rate of interest: Although HELOC charges might improve over time, additionally they sometimes provide decrease introductory rates of interest than dwelling fairness loans. So you can get monetary savings on curiosity costs.

Home fairness loans vs. cash-out refinances

A cash-out refinance is once you change your present mortgage with a brand new mortgage, sometimes to safe a decrease rate of interest and extra favorable phrases. Unlike a conventional refinance, although, you’re taking out a brand new mortgage for the house’s total worth — not simply the quantity you owe in your mortgage. You then obtain the fairness you’ve got already paid off in your house as a money payout.

For instance, if your own home is value $450,000, and also you owe $250,000 in your mortgage, you’d refinance for your entire $450,000, quite than the quantity you owe in your mortgage. Your new cash-out refinance dwelling mortgage would change your present mortgage after which give you a portion of the fairness you constructed (on this case $200,000) as a money payout.

Both a cash-out refi and a house fairness mortgage will offer you a lump sum of money that you’re going to repay in fastened quantities over a particular time interval, however they’ve some necessary variations. A cash-out refinance replaces your present mortgage cost. When you obtain a lump sum of money from a cash-out refi, it is added again onto the steadiness of your new mortgage, often inflicting your month-to-month cost to extend. A house fairness mortgage is completely different — it would not change your present mortgage and as an alternative provides a further month-to-month cost to your bills.

Who qualifies for a house fairness mortgage?

Although it varies by lender, to qualify for a house fairness mortgage, you are sometimes required to satisfy the next standards:

• At least 15% to twenty% fairness constructed up in your house: Home fairness is the quantity of dwelling you personal, based mostly on how a lot you’ve paid towards your mortgage. Subtract what you owe in your mortgage and different loans from the present appraised worth of your home to determine your own home fairness quantity.
• Adequate, verifiable revenue and steady employment: Proof of revenue is an ordinary requirement to qualify for a HELOC. Check your lender’s web site to see what types and paperwork you’ll need to submit alongside along with your utility.
• A minimal credit score rating of 620: Lenders use your credit score rating to find out the chance that you simply’ll repay the mortgage on time. Having a robust credit score rating — a minimum of 700 — will enable you qualify for a decrease rate of interest and extra amenable mortgage phrases.
• A debt-to-income ratio of 43% or much less: Divide your complete month-to-month money owed by your gross month-to-month revenue to get your DTI. Like your credit score rating, your DTI helps lenders decide your capability to make constant funds towards your mortgage. Some lenders choose a DTI of 36% or much less.

A house fairness mortgage is healthier if:

• You do not wish to pay personal mortgage insurance coverage: Some cash-out refinances require PMI, which may add a whole lot of {dollars} to your funds, however dwelling fairness loans do not.
• You cannot full a refinance: With charges rising, it is attainable that your mortgage charge is decrease than present refinance charges. If that is the case, it possible will not make monetary sense so that you can refinance. Instead, you should utilize a house fairness mortgage to take out solely the cash you want, quite than changing your total mortgage with the next rate of interest mortgage.

A cash-out refinance is healthier if:

• Refinance charges are decrease than your present mortgage charge: If you possibly can safe a decrease rate of interest by refinancing, this might prevent cash in curiosity, whereas offering entry to a lump sum of money. 
• You need just one month-to-month cost: The quantity you borrow will get added again to the steadiness of your mortgage so that you make just one cost to your lender each month.
• Less stringent eligibility necessities: If you do not have nice credit score or you’ve gotten a excessive debt-to-income ratio, or DTI, you could have a better time qualifying for a cash-out refi in contrast with a house fairness mortgage.
• Lower rates of interest: Cash-out refinances generally provide extra favorable rates of interest than dwelling fairness loans.

Tips for selecting a lender

You’ll wish to contemplate what kind of economic establishment most closely fits your wants. In addition to mortgage lenders, monetary establishments that provide dwelling fairness loans embody banks, credit score unions and online-only lenders.

“Select a lender that makes you feel comfortable and informed with the home equity loan process,” stated Rob Cook, vice chairman of selling, 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 possibility is to work with the lender that originated your first mortgage as you have already got a relationship and a historical past of on-time funds. Many banks and credit score unions additionally provide discounted charges and different advantages once you change into a buyer.

Some lenders provide decrease rates of interest however cost increased charges (and vice versa). What issues most is your annual share charge as a result of it displays each rate of interest and charges.

Ensure the precise phrases of the mortgage your lender is providing make sense on your price range. For instance, make sure the minimal mortgage quantity is not too excessive — be cautious of withdrawing extra funds than you want. You additionally wish to be sure that your reimbursement time period is lengthy sufficient so that you can comfortably afford the month-to-month funds. The shorter your mortgage time period, the upper your month-to-month funds might be.

“Costs and fees are an important consideration for anyone who is looking for a loan,” Cook stated. “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 is necessary to speak to quite a few lenders and discover one of the best charge out there.

How to use for a house fairness mortgage

Applying for a house fairness mortgage is just like making use of for any mortgage mortgage. You’ll want each a stable credit score rating and proof of sufficient revenue to repay your mortgage.

1. Interview a number of lenders to find out which lender can give you the bottom charges and charges. The extra firms you converse with, the higher your possibilities of discovering essentially the most favorable phrases.

2. Have a minimum of 15% to twenty% fairness in your house. If you do, lenders will then consider your credit score rating, revenue and present DTI to find out whether or not you qualify in addition to your rate of interest.

3. Be ready to have monetary paperwork on the prepared, similar to pay stubs and Form W-2s. Proof of possession and the appraised worth of your own home may also be vital.

4. Close in your mortgage. Once you submit your utility, the ultimate step is closing in your mortgage. In some states, you may have to do that in individual at a bodily department.

FAQs

Methodology

We evaluated a spread of lenders based mostly on elements similar to rates of interest, APRs and charges, how lengthy the draw and reimbursement durations are, and what sorts and number of loans are supplied. We additionally took into consideration elements that impression the person expertise similar to how straightforward it’s to use for a mortgage on-line and whether or not bodily lender places exist.