A home equity loan gives you a lump sum at a fixed rate, repaid over a set term (usually 5–30 years) with predictable monthly payments. A HELOC (Home Equity Line of Credit) works more like a credit card — you draw funds as needed during a draw period (typically 10 years) and pay interest only on what you actually use.

Most lenders require a credit score of 620–680 to qualify, with the best rates reserved for scores of 740+. Some equity-sharing products like Unlock and Hometap accept scores as low as 500–550 because they take an equity stake rather than charge interest. The higher your score, the lower your APR.

Most lenders require you to retain at least 15%–20% equity after borrowing — meaning your combined loan-to-value (CLTV) can't exceed 80%–85%. A few lenders go to 90% CLTV for top borrowers. Example: a $500,000 home with a $300,000 mortgage has $200,000 in equity, and at 85% CLTV you could borrow up to $125,000.

As of July 2026, HELOC rates start around 5.87%–7.25% APR (variable, tied to Prime), and fixed home equity loan rates range 6.50%–8.50% APR depending on the lender, your credit score, loan-to-value ratio, and term. The leaderboard above shows live offers refreshed continuously.

Some lenders charge appraisal fees ($300–$700), origination fees (0.5%–2% of the loan), annual fees ($50–$100), and closing costs (1%–5%). The lenders we feature highlight low or no upfront fees — Figure, Spring EQ, and others have eliminated most traditional closing costs. Always compare APR (which includes fees) rather than just the headline rate.

Online-first lenders like Figure can fund in as little as 5 business days from application to wire. Traditional banks and credit unions typically take 2–6 weeks for full underwriting, appraisal, and closing. The fastest paths skip in-person appraisal in favor of automated valuation models (AVMs).

A home equity loan is a one-time lump sum at a fixed rate with fixed monthly payments — best for known expenses like a major renovation or debt consolidation. A HELOC is a revolving line of credit with a variable rate — best for ongoing expenses or when you want flexibility to draw over time (multi-phase remodels, tuition, emergency fund backup).

Under current tax law (through at least 2025), interest is deductible only when proceeds are used to 'buy, build, or substantially improve' the home securing the loan, and total mortgage debt stays under $750,000 ($375,000 if married filing separately). Using funds for debt consolidation or other purposes makes the interest non-deductible. Consult a CPA for your specific situation.

A cash-out refinance replaces your existing mortgage with a new, larger one and gives you the difference in cash. A HELOC is a second loan that sits behind your existing mortgage. Cash-out is usually better if today's mortgage rates are lower than your current rate; a HELOC is better if you want to preserve a low existing mortgage rate.

Equity-sharing products give you a lump sum in exchange for a share of your home's future appreciation — with no monthly payments and no interest charged. You settle up (usually within 10 years) by selling, refinancing, or buying out the investor. Good fit for borrowers with low credit or who can't service additional monthly debt; trade-off is giving up some future appreciation.

Yes, but the requirements are stricter: typically 25%+ equity required (vs 15%–20% for a primary residence), higher minimum credit scores (often 700+), and rates 0.50%–1.50% higher than on owner-occupied homes. Fewer lenders offer this product, so shop carefully.

Anything you want — there are no restrictions. Most common uses: home renovations and additions (the only use that qualifies for tax-deductible interest), consolidating high-interest credit card debt, funding college tuition, covering medical expenses, starting a business, or simply having an emergency line of credit available at a low rate.

Because the loan is secured by your home, missing payments puts your home at risk of foreclosure — this is a much higher-stakes loan than a credit card. Contact your lender immediately if you anticipate difficulty; most offer hardship programs, modified payments, or forbearance before pursuing foreclosure. Never take a home equity loan you can't comfortably afford.

The hard inquiry knocks 5–10 points off your FICO score temporarily, recovering within a few months. Once open, a HELOC adds to your total available credit (helping utilization) and creates a new account (slightly hurting average account age). Net long-term impact is usually neutral to mildly positive, assuming on-time payments.

We score every offer on APR (including fees), loan-to-value flexibility, minimum credit score, draw period and repayment terms, funding speed, fee structure, customer reviews, and lender reputation. Rates are pulled directly from each lender and updated continuously. Reviews are editorially independent and never paid for placement.