The top home equity loan lenders of 2024.

You can use a home equity loan to borrow money against your property's value for renovations, starting a business, consolidating debt, or covering major expenses. Home equity loans have lower interest rates than personal loans or credit cards, and if you use the funds for home improvements, you may be able to deduct the interest.

CNBC Select has identified top lenders for home equity loans across different categories. (For more details, refer to our methodology.)

Best if you don't have much equity: Discover

This is for whom? Discover only requires borrowers to have 10% equity in their home, which is much less than most lenders.

Standout benefits: Standout benefits: Discover offers lower-than-average interest rates on home equity loans and doesn't charge a lender fee or closing costs, which can save you up to 6% of your loan total.

Best for low interest rate: Third Federal Savings and Loan

If Third Federal cannot provide you with a lower mortgage rate, it will pay you $1,000 after you close with its competitor on the quoted terms and time frame. Notable advantages: Unlike many lenders, Third Federal offers both fixed- and adjustable-rate loans and permits borrowers to use a vacation home as collateral.

Best for a credit score below 680: TD Bank

TD Bank has a lower requirement for home equity loan applicants, accepting scores as low as 660, compared to the 680 most lenders require.

TD Bank offers small loans with benefits such as a minimum loan amount of $10,000 and a maximum loan amount of $500,000, as well as an origination fee of $99, which is lower than most lenders.

Best for rate discount: Flagstar Bank

Autopay customers with Flagstar bank accounts can receive a 0.25% rate discount.

Flagstar distinguishes itself from other lenders by not charging closing fees and offering home equity loans ranging from $10,000 to $1 million, compared to the typical range of $35,000 to $300,000 with many other lenders.

Best for no loan-to-value ratio: Rocket Mortgage

Rocket Mortgage offers higher loan-to-value ratio than most lenders, with a maximum of 90% of home equity.

Rocket's website offers transparent pricing and term details, while its mobile app is user-friendly. The lender has a reputation for top-notch customer service and has received high ratings from JD Power and the Better Business Bureau.

Discover

Discover Bank was founded in 1985 as a financial services division of Sears. Currently, Discover offers credit cards, checking and savings accounts, loans, and other financial products. In February 2024, Capital One announced its plan to acquire Discover.

Minimum/maximum loan amount$35,000 to $300,000

Repayment terms10, 15, 20 or 30 years

Loan-to-value ratio90%

Third Federal Savings and Loan

Third Federal, founded in Cleveland in 1938, went public in 2007 and operates in 20 U.S. states. However, it only issues home equity loans in California, Florida, Kentucky, New Jersey, North Carolina, Ohio, Pennsylvania, and Virginia. The minimum loan amount is $10,000, and the maximum loan amount is $300,000.

Repayment termsFixed-rate: 5 or 10 years, adjustable-rate: 30 years

Loan-to-value ratio79.99%

TD Bank

Since 1852, TD Bank has been the tenth largest bank in the U.S. by consolidated assets, as per the Federal Reserve. TD Bank offers home equity loans in several states, including Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and Washington, D.C.

Minimum/maximum loan amount$10,000 to $500,000

Repayment terms5, 10, 15, 20 or 30 years

Loan-to-value ratio89.99%

Flagstar Bank

In 1987, First Security Savings Bank was established and later acquired by New York Community Bank in 2022. Currently, it has 390 branches in 10 states. Although it received an A- rating from the Better Business Bureau, it fell below average in the J.D. Power 2024 U.S. Mortgage Servicer Satisfaction Study.

Minimum/maximum loan amount$10,000 to $1 million

Repayment terms10, 15 or 20 years

Loan-to-value ratio80%

Rocket Mortgage

Rocket Mortgage, an online lender, was the second largest mortgage provider in the U.S. in 2023, with nearly 289,000 home loans worth $78 billion. It was ranked second for customer satisfaction with mortgage origination by J.D. Power and came in first for mortgage servicing.

Minimum/maximum loan amount$45,000 to $500,000

Repayment terms10 or 20 years

Loan-to-value ratio90%

What is a home equity loan?

A second mortgage, also known as a home equity loan, is a lump sum loan that is secured by the value of your home. While not all lenders offer these loans, they are popular among borrowers because they typically come with lower interest rates compared to credit cards or personal loans.

While most lenders approve home equity loans for 80% of the house's value, some go as high as 85% or even 90%. And while you typically need 20% equity for approval, some lenders accept 15%.

If you require funds for renovations, education, or a medical emergency, a home equity loan could be beneficial. Nevertheless, since your house serves as collateral, you risk losing your home if you fall behind on payments.

Some lenders have more lenient requirements: For instance, TD Bank approves home equity loans for borrowers with credit scores as low as 640, while Rocket Mortgage accepts applicants with as little as 10% home equity.

Alternatives to home equitys

Some alternatives to home equity loans don't require the use of a home as collateral.

Home equity line of credit (HELOC)

Secured lines of credit known as HELOCs use your home as collateral, typically with a 10-year draw period and a 20-year repayment period. However, since a HELOC is backed by your home, the lender has the power to foreclose on your property if you default on the loan.

A home equity line of credit (HELOC) may be more suitable than a traditional home equity loan if you have a significant, ongoing project or renovation expense and are uncertain about the total amount you will require. During the draw period, you can withdraw funds as many times as necessary up to your credit limit.

Home equity sharing

Homeowners can obtain cash by giving up a portion of their home's future value through home equity sharing.

An investor purchases a portion of your home and defers payment until 30 years later or the time of sale, whichever comes first. You won't have to make any payments or pay interest until then. Instead, the investor applies a risk adjustment rate to the property, which could result in a higher interest-like payment if your house appreciates significantly.

Home equity sharing agreements are popular among cash-poor or weak-credit homeowners because they have laxer credit requirements. Additionally, these agreements require only a one-time repayment, which makes them appealing. However, if you fail to make the required payment when the term expires, your investor has the right to foreclose on your property.

Cash-out refinance

A cash-out refinance allows you to replace your original loan with a larger amount, which you can then take in cash after paying off the original balance.

Unlike other forms of financing, a cash out refinance requires only one payment and typically has a lower rate. However, to qualify for a cash out refinance, you must have at least 20% equity and a minimum credit score of 620.

Personal loan

A personal loan is an unsecured debt, meaning your home is not at risk of foreclosure. Additionally, credit score requirements are typically more lenient. While lenders may cap personal loans at $50,000 or $100,000, these loans often come with higher interest rates and shorter repayment terms. Moreover, even if you use a personal loan for home renovations, you won't be able to deduct the interest.

Home equity loan: Pros and cons

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Our methodology

We evaluated numerous U.S. lenders to determine the top home equity lenders. To determine the best home equity loans, we considered the following features:

We assess various fees, such as origination fees, application fees, underwriting fees, processing fees, administrative fees, and closing costs, in addition to other factors when evaluating lenders' overall offers.
We evaluated home equity lenders based on their interest rates, minimum and maximum loan amounts, and maximum loan-to-value ratio in addition to loan amounts and terms.
Lenders were evaluated based on their maximum debt-to-income ratio, minimum home equity allowed, and credit score needed, among other specified criteria.
We evaluated whether lenders provided an online or in-person application process at local branches.
Our list of mortgage lenders offers customer support through phone, email, or secure online messaging, as well as an online resource hub or advice center to assist you in understanding the personal loan process and managing your finances.

We ranked our options based on their suitability for low equity, fair credit, high loan-to-value ratio, and both large and small loan amounts.

We took into account CNBC Select audience data, including demographics and engagement with our content and tools, when possible.

Mortgage rates and fee structures can change based on the Federal Reserve rate and company policies.