Report on Home Equity Loans and Sustainable Development Goals (SDGs) Integration

Note: Sample rates and APRs are subject to change. All information is accurate as of June 27, 2025.

Introduction

Home equity loans and home equity lines of credit (HELOCs) provide homeowners with financial tools to leverage the equity built in their homes. These products enable borrowers to access funds for various purposes such as home repairs, medical expenses, or debt consolidation. This report evaluates the best home equity lenders as of July 2025, emphasizing their alignment with Sustainable Development Goals (SDGs), particularly SDG 1 (No Poverty), SDG 8 (Decent Work and Economic Growth), and SDG 11 (Sustainable Cities and Communities).

Understanding Home Equity Loans and HELOCs

• Home equity loans provide a lump sum of cash based on the equity in a home.
• HELOCs function like credit cards, offering a revolving credit line secured by home equity.
• These products are available through banks, credit unions, fintech companies, and online lenders.
• Qualifying criteria, loan amounts, and property requirements vary by institution.

Selection Methodology

Over 60 home equity products and lenders were reviewed using publicly available data and lender interviews. Evaluation criteria included:

1. Interest rates (30%)
2. Loan terms (20%)
3. Credit score minimums (20%)
4. Loan-to-value (LTV) ratios (15%)
5. Maximum loan amounts (15%)

These factors were scored on a scale of one to five to identify top-performing lenders.

Top Home Equity Lenders of July 2025

PNC Bank

• Product Type: HELOC
• Maximum Loan Amount: $1 million
• Maximum LTV: 80% to 89.99%
• Terms: 10-year draw, 30-year repayment; fixed and variable rates
• Interest Rates: Intro APR 0.25% for six months; starting at 7.99% APR
• Credit Score Minimum: Over 600
• Properties Allowed: Single-family, multi-family, condos, mobile homes

SDG Alignment: By offering low credit score requirements and high loan amounts, PNC Bank supports SDG 1 (No Poverty) by increasing financial inclusion and SDG 8 (Decent Work and Economic Growth) by enabling access to capital for home improvements and debt management.

Figure

• Product Type: HELOC
• Maximum Loan Amount: $400,000
• Maximum LTV: 85%
• Terms: 5, 10, 15, 30 years
• Interest Rates: Fixed rates starting at 6.95% APR
• Credit Score Minimum: 640
• Properties Allowed: Single-family, townhouses, condos, duplexes

SDG Alignment: Figure’s use of Automated Valuation Models reduces the need for in-person appraisals, promoting SDG 9 (Industry, Innovation and Infrastructure) by leveraging technology to improve financial services accessibility.

Discover

• Product Type: Home equity loans
• Maximum Loan Amount: $300,000
• Maximum LTV: 90%
• Interest Rates: Fixed
• Credit Score Minimum: 680
• Properties Allowed: Single-family primary residences

SDG Alignment: Discover’s no closing costs and appraisal waivers reduce financial barriers, supporting SDG 1 and SDG 10 (Reduced Inequalities) by making home equity loans more accessible.

Connexus Credit Union

• Product Types: Home equity loans and HELOCs
• Maximum LTV: 90%
• Terms: 5, 10, 15 years (loans); 15-year draw and repayment (HELOCs)
• Interest Rates: Intro APR 5.99% until April 2026; fixed rates starting at 7.31% APR
• Credit Score Minimum: 640
• Properties Allowed: Primary residences, second homes, duplexes, townhomes, condos

SDG Alignment: By allowing borrowing against second homes and offering flexible terms, Connexus promotes SDG 11 (Sustainable Cities and Communities) by facilitating investments in diverse housing types.

Navy Federal Credit Union

• Product Types: Home equity loans and HELOCs
• Maximum Loan Amount: $500,000
• Maximum LTV: 95% to 100%
• Terms: 5 to 20 years (loans); 20-year draw and repayment (HELOCs)
• Interest Rates: Fixed starting at 7.34% APR (loans); variable starting at 7.75% APR (HELOCs)
• Credit Score Minimum: 650
• Properties Allowed: Primary and second homes within 50 miles

SDG Alignment: Navy Federal’s extended draw periods and high LTV ratios support SDG 8 by providing long-term financial solutions and SDG 10 by catering to military members and government employees, promoting equitable access.

M&T Bank

• Product Type: HELOC
• Maximum Loan Amount: $1 million
• Maximum LTV: 85.99% (primary residences)
• Terms: 10-year draw, 20-year repayment
• Interest Rates: Intro 5.99% for six months; variable starting at 6.94%
• Credit Score Minimum: 680
• Properties Allowed: Primary residences, vacation homes, condos, townhomes

SDG Alignment: M&T Bank’s no application or closing fees reduce financial barriers, supporting SDG 1 and SDG 10 by enhancing affordability.

Rate

• Product Type: HELOC
• Maximum Loan Amount: $400,000
• Maximum LTV: 85%
• Terms: 2 to 5-year draw; 5 to 30-year repayment
• Interest Rates: Fixed starting at 6.60% APR
• Credit Score Minimum: 640
• Properties Allowed: Primary residences, second homes, investment properties

SDG Alignment: Rate’s allowance for investment properties supports SDG 8 by facilitating economic growth through real estate investments.

Fifth Third Bank

• Product Types: Home equity loans and HELOCs
• Maximum Loan Amount: $500,000
• Maximum LTV: 90%
• Interest Rates: Starting at 6.97% APR (HELOCs)
• Credit Score Minimum: Varies
• Properties Allowed: Owner-occupied and multi-unit properties

SDG Alignment: Flexible rate lock options promote financial stability, aligning with SDG 8 by supporting responsible economic growth.

Other Considered Lenders

TD Bank

Offered both HELOC and home equity loans with loan amounts up to $6 million. Limited geographic availability restricted selection.

Achieve

Provided fixed-rate HELOCs with low credit score requirements but limited draw periods and loan amounts.

Rocket Mortgage

Known for online application ease but high credit score requirements and mandatory in-person appraisals were drawbacks.

SoFi

Offered home equity loans with multiple term options but higher credit score minimums and interest rates compared to competitors.

Home Equity Loans: Key Information

Definition and Function

Home equity loans are second mortgages secured by the borrower’s home, providing a lump sum with fixed repayment terms. HELOCs offer revolving credit lines with flexible borrowing and repayment options.

Borrowing Limits and Repayment

• Lenders typically allow borrowing up to 80-90% of home value minus existing mortgage balance.
• Home equity loans have fixed monthly payments over 5-30 years.
• HELOCs often have interest-only payments during draw periods, followed by principal and interest payments.

Choosing a Lender

• Consider eligibility requirements including credit scores and appraisal needs.
• Check property types allowed, especially for second homes or investment properties.
• Evaluate loan amounts, LTV ratios, fees, interest rates, and repayment terms.
• Review customer feedback and regulatory records via the Nationwide Mortgage Licensing System (NMLS).

Pros and Cons of Home Equity Loans

Alternatives to Home Equity Loans

• Cash-Out Refinance: Replaces existing mortgage with a larger loan, providing lump sum cash. May not be advisable if interest rates have risen.
• Personal Loans or Credit Cards: Avoids using home as collateral but usually involves higher interest rates.
• Reverse Mortgages: Available to seniors, allowing access to home equity without monthly payments, repaid upon sale or permanent move.

Recent Trends and Economic Context

Despite a sluggish housing market due to high mortgage rates and rising home prices, homeowners possess record-high equity levels, averaging $212,000 accessible per mortgage holder. This financial resilience supports SDG 1 by reducing poverty risk and SDG 8 by enabling economic stability. The increasing preference for HELOCs to manage higher-interest debts reflects evolving financial strategies aligned with sustainable economic growth.

Conclusion

Home equity loans and HELOCs are vital financial instruments that can empower homeowners to improve their living conditions, manage debt, and invest in sustainable housing solutions. Lenders offering accessible terms, low credit requirements, and innovative technologies contribute to achieving multiple Sustainable Development Goals by promoting financial inclusion, economic growth, and sustainable communities.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 1: No Poverty
   • Access to home equity loans and HELOCs can provide financial resources to manage unexpected expenses, consolidate debt, and improve living conditions, thus helping to reduce poverty and financial vulnerability.
2. SDG 8: Decent Work and Economic Growth
   • Home equity lending supports economic growth by enabling consumers to invest in home improvements, manage debts, and maintain financial stability.
3. SDG 10: Reduced Inequalities
   • The article discusses varying credit score requirements and loan-to-value ratios, highlighting efforts to make home equity products accessible to a broader range of borrowers, including those with lower credit scores.
4. SDG 11: Sustainable Cities and Communities
   • Home equity loans can be used for home repairs and improvements, contributing to sustainable housing and community development.
5. SDG 17: Partnerships for the Goals
   • The article references collaboration between financial institutions, technology companies, and regulatory bodies (e.g., NMLS database), which supports partnerships to enhance financial services.

2. Specific Targets Under the Identified SDGs

1. SDG 1: No Poverty
   • Target 1.4: Ensure that all men and women have equal rights to economic resources, including access to basic services and financial services.
2. SDG 8: Decent Work and Economic Growth
   • Target 8.10: Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all.
3. SDG 10: Reduced Inequalities
   • Target 10.2: Empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.
4. SDG 11: Sustainable Cities and Communities
   • Target 11.1: Ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.
5. SDG 17: Partnerships for the Goals
   • Target 17.17: Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships.

3. Indicators Mentioned or Implied to Measure Progress

1. Access to Financial Services
   • Credit score minimums required by lenders (e.g., 600, 640, 680) indicate inclusivity and accessibility of financial products.
   • Loan-to-value (LTV) ratios (e.g., up to 90%, 95%, 100%) measure the extent to which borrowers can leverage home equity.
   • Maximum loan amounts offered by lenders (ranging from $150,000 to $6 million) reflect the scale of financial support available.
   • Availability of products across states (not all lenders operate in all 50 states) indicates geographic accessibility.
2. Financial Product Features
   • Interest rates (fixed and variable) and introductory rates provide indicators of affordability of credit.
   • Loan terms and draw periods (e.g., 5 to 30 years) measure flexibility and suitability for borrowers’ needs.
   • Use of appraisal requirements (in-person vs. automated valuation models) affects cost and accessibility.
3. Consumer Protection and Risk
   • Foreclosure risk and potential for being “upside down” on a mortgage are implied risks that relate to financial stability indicators.
4. Regulatory Oversight
   • Reference to the Nationwide Mortgage Licensing System (NMLS) database implies monitoring and regulation indicators for consumer protection.

4. Table of SDGs, Targets, and Indicators

Source: money.com