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Hal Bundrick, CFP® · Senior Writer Updated Mon, December 1, 2025 at 7:00 PM GMT+8 If you need money for large purchases, a home equity line of credit (HELOC) is a solid choice — especially if you want to draw cash as you go rather than receive the money in one lump sum. The best home equity line of credit lenders offer low fees, repayment flexibility, great customer satisfaction ratings, and quick closings.
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Is a HELOC a good idea? Consider these pros and cons.
The best HELOC lenders: December 2025
Best HELOC lender overall: Truist Bank
The Yahoo view: Truist earns our top honors as a HELOC provider due to its high available credit lines and payment flexibility.
Key benefits
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Truist offers home equity credit lines up to $1 million.
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Allows borrowers to select interest-only or revolving payments during the draw period.
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Offers a fixed-rate option with up to five terms to choose from for a $15 fee in most states.
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Allows for a combined loan-to-value ratio (CLTV ratio) of up to 89%. This includes the loan-to-value ratio on your house with your primary mortgage and the amount you want to borrow with the HELOC.
Need to know
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There's no required minimum draw except in Texas or for fixed-rate HELOCs.
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Truist charges a $50 annual fee in some states.
Learn how to use a HELOC to pay off debt (and when it makes sense).
Up Next
Best HELOC lender runner-up: Better Mortgage
Better Mortgage
The Yahoo view: Better has much to offer: a high combined loan-to-value ratio, no prepayment penalty, and fast closings.
Key benefits
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Better offers the flexibility of a HELOC or a lump-sum home equity loan.
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Says it can close on a HELOC in as few as seven days.
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Has a CLTV ratio limit of 90% when considering your existing mortgage.
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Recently launched a Bank Statement HELOC, so borrowers only need to submit bank statements when they apply; this is ideal for self-employed homeowners or others with unique financial situations.
Need to know
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Better publishes a detailed list of HELOC closing costs on its website.
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Has a minimum initial draw of 75% of the credit line or $50,000, whichever is greater.
Best HELOC lender for customer satisfaction: Navy Federal Credit Union
The Yahoo view: Navy Federal Credit Union (NFCU) is a customer-satisfaction machine with no annual fee or closing costs for HELOCs. It has the highest lender score on our list, but we didn’t choose it as our top pick because Navy Federal membership is only available to military-affiliated families.
Key benefits
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NFCU ranks above average for customer satisfaction among mortgage lenders, according to the J.D. Power 2025 origination survey. Plus, it tops the list for satisfaction among loan servicers.
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Promotes no application, origination, annual, or inactivity fees.
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Closes on HELOCs in an average of just five days.
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Offers an interest-only payment option.
Need to know.
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Allows maximum credit lines up to $500,000.
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Most lenders offer a 30-year HELOC term with a 10-year draw period and a 20-year repayment term; NFCU's HELOC has a 40-year term consisting of a 20-year draw period and a 20-year repayment term.
Best HELOC lender for low fees: Bank of America
The Yahoo view: Bank of America stands out as a low-fee HELOC lender, offering credit lines up to a cool million dollars and discounts to loyal customers.
Key benefits
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Bank of America charges no application fees, annual fees, origination fees, or prepayment penalties. However, if you close your account within 36 months of opening it, you may have to pay an "early closure fee."
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Offers credit lines of up to $1 million.
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Bank of America rewards program for existing customers can provide interest rate discounts.
Need to know
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Bank of America requires a minimum draw of $15,000 to $25,000.
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Does not disclose a minimum qualifying credit score or debt-to-income ratio (DTI).
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Has an average HELOC closing time of 50 days.
Best HELOC lender for a quick closing: New American Funding
The Yahoo view: New American Funding beats other lenders to the HELOC finish line, with closings as quickly as in five days. It also has relatively low costs.
Key benefits
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New American Funding says it can close HELOCs in as little as five days.
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Has no annual fee.
Need to know
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You must withdraw the full amount of your credit line at closing
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Promotes "no out-of-pocket costs." While no clarification is available on its website, that may mean that lender expenses are deducted from your credit line.
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Requires a minimum 640 credit score and a maximum 50% DTI to qualify.
Read our full New American Funding mortgage review.
How does a home equity line of credit work?
HELOCs are versatile tools for homeowners with equity, and most providers allow you to draw cash as you need it. That reduces debt and interest costs as well. You can tap it, pay it back — and then circle back whenever you need more cash liquidity in your financial life.
There’s no limit on how you can use the money from a HELOC. However, you should always consider whether taking on more debt and using your home as collateral is worth the risk and costs.
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Learn how to use a HELOC for a down payment on a second home.
HELOC draw and repayment periods
A HELOC has two main components: You take out the money (the draw period) and pay it back over time (the repayment period). That means you can borrow and pay back the money during the initial draw period, but you can't access the credit line during the repayment period.
For example, many HELOCs allow 10-year draws and then 20-year repayment periods, although there can be variations.
Be sure to consider just how long you want to be saddled with the debt for something you spent money on years and years ago — and the interest you'll pay over what's likely to be 30 years.
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Determine whether now a good time to get a HELOC.
How do you get a HELOC?
You must have some value built into your house to qualify for a HELOC. That usually comes from years of payments and market-price appreciation. With 15% to 20% equity, you'll have enough to apply for a HELOC. As you did with your first mortgage, you'll want to shop around for the best offer.
Getting a HELOC won't be as hard as it was to get a mortgage (we heard that sigh of relief), but there's still some paperwork to do. As always, your creditworthiness comes into play: things like your credit score, existing debt — you know the drill. Be patient. Expect the process to take a few weeks, and then revel in the surprise if it happens sooner.
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Here's how to get a HELOC with poor credit.
Different types of HELOCs
When shopping for a HELOC, two options may be presented. Here's what you need to know.
Interest-only HELOCs
It may seem pretty easy to understand an interest-only HELOC. You're not paying the debt down during the draw period; you're just paying interest to the lender. When the draw period ends, your payments are amortized with principal and interest.
One thing to remember: Most HELOCs have adjustable interest rates, so your monthly interest payment is likely to vary.
Fixed-rate HELOCs
Some lenders offer fixed-rate HELOCs. You may have to pay a fee to get it, but you'll lock in an interest rate on some or all of your balance for the long term. That's a good idea if interest rates are rising — maybe not so much if rates are expected to go lower.
In our current world of range-bound interest rates, it may be a toss-up. But the lure of an interest rate that won't jump higher can be appealing.
Can you refinance a HELOC?
The repayment period on a HELOC can be grueling. You've depleted most of, if not all, your home's equity and now face many years of paying down debt. You might wonder if a HELOC can be refinanced.
If you have already tapped out your home equity, the options may be limited. If you truly have difficulty making the payments, a loan modification may be your best choice.
Can you deduct HELOC interest on your taxes?
If you wait, the answer is likely to be yes. The rules are changing. After the 2025 tax year, you may be able to deduct HELOC interest on your taxes regardless of what you used the proceeds for. Right now, the IRS says you have to spend the money to "buy, build, or substantially improve" your house for the interest to be deductible, up to a limit.
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Read about how to pay off your mortgage with a HELOC.
Alternatives to a HELOC
Cashing in on the equity in your house without selling it can be achieved in three additional ways besides using a HELOC.
Home equity loan
Qualifying for a home equity loan (HEL) is similar to the process involved with a HELOC. The primary difference is that while you draw from a line of credit as you wish with a HELOC, a home equity loan is delivered in a lump sum of cash. There's no 10-year draw term, so repayment begins shortly after closing and can last from five to 30 years.
One other distinction: While HELOCs usually have variable interest rates with some lenders offering fixed-rate options for a fee, HELs are usually fixed-rate loans from the start.
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HELOC vs. home equity loan
Cash-out refinance
Rather than adding a second mortgage to your home with a HELOC or a HEL, you can trade in your old home loan for a new cash-out refinance. You get the lump sum and make one payment on the new mortgage.
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HELOC vs. cash-out refinance
HECM reverse mortgage
If you're 62 or older, a Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage, may be an appealing option. A portion of your equity can be distributed to you in a few ways: as a lump sum, a monthly payment to you, a line of credit, or a combination of a line and a monthly payment.
As you receive that money, interest and debt accrue against the home's value, which is repaid when you move, sell the house, or die.
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HELOC vs. home equity loan vs. reverse mortgage
Personal loan
A personal loan doesn't draw from your home's equity, but it can put cash in your pocket. And you don't have to put your home up as collateral. However, an unsecured personal loan can mean a higher interest rate.
Personal loans won't usually put tens of thousands of dollars in your pocket, but terms are shorter than HELOCs so your debt won't linger for decades.
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HELOCs vs. personal loans
Best HELOC lender FAQs
What is the best place to get a HELOC loan?
In our view, the overall best place to get a HELOC is Truist Bank. You'll also find our other reviewed lenders are worthy contenders and outstanding in one way or another.
Who has the best HELOC deals right now?
The best deals are fleeting and require a hunting instinct. Since interest rates are constantly changing and mortgage lenders are often tweaking available specials, you'll want to keep a few lenders on your radar. Check their websites for limited-time offers. But when you're ready to get rolling with a HELOC, ask your contenders for any unadvertised specials that may be available.
What are HELOC rates right now?
HELOC rates generally range from about 6.5% to near 9% right now, with an overall average rate of 8.29%. Rates vary by location, property value, mortgage balance, loan amount, and credit score.
Methodology:
Yahoo Finance reviews and scores HELOC lenders based on: 1) Available products, 2) Fees, 3) CLTV, 4) Closing times, 5) Maximum DTI, 6) Minimum credit scores, 7) Maximum credit line, 8) Minimum draw, 9) Prepayment penalties, 10) Special features, and 11) Customer satisfaction.
Advertisers or sponsorships do not influence ratings.
Editorial disclosure for mortgages:
The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender's website for the most current information. This site doesn't include all currently available offers.
Laura Grace Tarpley edited this article.
Read More
Is now a good time to take out a HELOC?
It can be a good time to get a HELOC, especially if you don’t want to lose the low rate on your first mortgage. Learn how the housing market could affect your decision.
Is a HELOC a good idea? Pros and cons to consider.
A home equity line of credit (HELOC) can help many homeowners, but it’s not right for everyone. Before you take one out, consider the pros and cons.
How to use a HELOC to pay off debt (and when it makes sense)
If you’re burdened by loan payments, using a HELOC to pay off debt could save you big in interest. But it’s not for everyone. See if this option is for you.
HELOC vs. personal loan: Which should you choose?
HELOCs and personal loans are two strong financing options for home improvements or other large expenses. Learn which is the better fit for your situation.
How much can you borrow with a HELOC?
The amount you can borrow with a HELOC depends on your home value, outstanding mortgage balance, and lender. Learn to calculate how much HELOC money you can get.
How to get a HELOC when you have a bad credit score
Learn how to get a HELOC with bad credit. If you have a lot of home equity or a low debt-to-income ratio, lenders may still accept your application.
