Best HELOC & Home Equity Loans of 2026

Home equity lines of credit (HELOC) and home equity loans allow you to tap the accumulated value of your home without refinancing your primary low-interest mortgage. Compare top lenders on speed, closing costs, and fixed-rate conversion options.

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Top 2 Options — Ranked & Reviewed

⭐ Editor's Choice 2026
Rank #1

Figure HELOC

★4.8 / 5.0Issuer: Figure Technology Solutions

Figure is a leader in modern consumer home equity lending. By leveraging automated desktop valuation models (AVMs), Figure allows homeowners to apply online in 5 minutes, get an instant decision, and access their home equity in as few as 5 business days without an in-person appraiser walking through their home. Every draw is locked into a fixed interest rate.

Loan Amount
$15,000 - $400,000
APR Range
7.55% - 14.75% Fixed APR
Term Lengths
5, 10, 15, or 30 Years
Credit Needed
Good to Excellent (680+ FICO)
Origination Fee:0.0% - 4.99%
Prepayment Penalty:None

Top Benefits

  • Fastest HELOC funding in the industry (as few as 5 business days)
  • Fixed interest rate protects you against Federal Reserve rate volatility
  • Fully digital workflow with online automated notarization and valuation
  • Higher borrowing limits up to $400,000

Considerations

  • Requires 100% initial draw of the approved credit line at closing
  • Origination fee can reach up to 4.99% on lower credit profiles
  • Minimum 680 credit score excludes borrowers with fair credit
5-Minute Online ApprovalFixed-Rate on Every DrawNo In-Person Appraisal Needed0.25% Autopay DiscountUp to 85% Combined LTV
⭐ Editor's Choice 2026
Rank #2

Discover Home Equity Loan

★4.7 / 5.0Issuer: Discover Bank

Discover Home Equity Loans provide a low-friction second mortgage solution for homeowners who want a fixed interest rate and zero closing costs. Unlike traditional banks that nickel-and-dime borrowers with appraisal and title fees, Discover covers all upfront origination and closing costs.

Loan Amount
$35,000 - $300,000
APR Range
7.99% - 13.99% Fixed APR
Term Lengths
10, 15, 20, or 30 Years
Credit Needed
Good (660+ FICO)
Origination Fee:$0 (Zero closing costs)
Prepayment Penalty:None

Top Benefits

  • Absolutely zero closing costs and zero origination fees
  • Predictable fixed payments over the entire loan life
  • Ideal for home renovations or high-interest debt consolidation
  • Direct US-based customer service

Considerations

  • Higher minimum loan amount ($35,000) prevents smaller borrowing
  • Closing timeline typically takes 4 to 6 weeks
  • Combined loan-to-value (CLTV) capped strictly at 80% to 85%
$0 Closing Costs & $0 Origination FeesFixed Rate & Fixed Monthly PaymentSecond Mortgage Structure10, 15, 20, or 30-Year TermsNo Cash Required at Closing

Direct Head-to-Head Matchups in HELOC & Home Equity Loans

Still torn between two top contenders? Inspect our side-by-side mathematical showdowns:

1v1 Showdown
Figure HELOC vs Discover Home Equity Loan

Understanding Home Equity: HELOC vs. Home Equity Loan

Your home equity is the difference between your property's current appraised market value and your outstanding mortgage balance. Tapping home equity is one of the lowest-cost borrowing methods available because the loan is secured by your residential real estate.

HELOC vs. Home Equity Loan: Key Differences

  1. HELOC (Home Equity Line of Credit): Functions like a credit card with a revolving credit line. During the Draw Period (typically 5 to 10 years), you borrow what you need and usually pay interest only on what you use. During the Repayment Period (10 to 20 years), the line closes and you pay both principal and interest. Most traditional HELOCs feature variable interest rates, though modern fintech lenders like Figure now offer fixed-rate draws.
  2. Home Equity Loan (Second Mortgage): You receive a single lump-sum payout at closing with a fixed interest rate and fixed monthly payment over a 10 to 30-year term. Lenders like Discover offer zero closing costs.

Combined Loan-to-Value (CLTV) Ratios

Lenders evaluate your borrowing power using your CLTV ratio. Most institutions cap total borrowing at 80% to 85% of your home's appraised value:

  • Example: If your home is worth $500,000 and your primary mortgage balance is $300,000:
  • At an 85% max CLTV ($425,000 total debt allowance), your maximum equity line is $125,000 ($425,000 minus $300,000).

IRS Tax Deductibility Rules

Under current IRS tax guidelines, interest paid on a HELOC or home equity loan is only tax-deductible if the borrowed funds are used strictly to buy, build, or substantially improve the residence that secures the debt. If you use equity to consolidate credit cards or pay tuition, the interest is not tax-deductible.

Frequently Asked Questions

What credit score do I need for a HELOC? Most traditional banks require a minimum FICO score of 680 to qualify for competitive rates and high LTVs. Digital lenders like Figure can approve borrowers starting at 620 to 680 depending on the property equity buffer.

What happens if home prices drop after I take out a HELOC? If local home prices decline significantly, your lender reserves the legal right to freeze or reduce your available credit line to prevent you from being underwater.

Crunch the Numbers

Before you apply, use our pro-grade calculators to estimate your costs, payoffs, and potential rewards.