Now that tapping home equity is back in fashion, I figured it’d be helpful to see who the top HELOC lenders are.
Last year, banks and mortgage lenders doled out nearly one million home equity lines of credit (HELOCs), per HMDA data.
A total of 962,000 HELOCs were opened in 2021, up 10.7% from the 869,000 originated in 2020, the first annual increase in three years.
I expect HELOC originations to rise again in 2022 now that mortgage rates on existing first mortgages are so low relative to what’s available today.
Read on to see who the top HELOC originators were last year.
Top HELOC Lenders
| Ranking | Company Name | 2021 Loan Count |
| 1. | Citizens Bank | 48,992 |
| 2. | PNC Bank | 40,566 |
| 3. | Truist | 40,088 |
| 4. | U.S. Bank | 34,470 |
| 5. | Bank of America | 31,375 |
| 6. | Huntington Bank | 27,783 |
| 7. | Third Federal | 16,449 |
| 8. | Figure Lending | 14,726 |
| 9. | Regions Bank | 13,266 |
| 10. | Boeing Employees CU | 13,202 |
| 11. | Mountain America CU | 12,241 |
| 12. | Zions Bank | 11,127 |
| 13. | State Employees CU | 11,053 |
| 14. | PenFed | 10,362 |
| 15. | KeyBank | 10,238 |
| 16. | Fifth Third | 10,194 |
| 17. | TD Bank | 9,536 |
| 18. | First Citizens | 9,518 |
| 19. | M&T Bank | 9,287 |
| 20. | America First CU | 9,065 |
| 21. | BMO Bank | 8,870 |
| 22. | Bank of the West | 8,395 |
| 23. | Alliant CU | 7,992 |
| 24. | Idaho Central CU | 7,413 |
| 25. | Ent CU | 7,399 |
Last year, Citizens Bank led all HELOC lenders with nearly 50,000 lines of credit originated (48,992), representing a solid 5.1% market share, per HMDA data from the CFPB.
They were followed by PNC Bank with 40,566 HELOCs originated for a 4.2% share.
A similar total was generated by Truist Bank (40,088) for a market share of 4.2%.
U.S. Bank took third with 34,470 HELOCs opened and a 3.6% market share, followed by Bank of America with 31,375 lines of credit opened for a 3.3% market share.
In 2020, Bank of America had been the #1 HELOC lender with a 5.6% market share before falling to fifth in 2021.
Huntington Bank took sixth with a 2.9% market share, Third Federal came in seventh with a 1.7% share of the market, and newcomer Figure Lending took eighth with a 1.5% market share.
Regions Bank and Boeing Employees Credit Union rounded out the top 10 with 1.4% of the market, each.
You can see the top 25 HELOC lenders in the above table for more details. These 25 institutions alone accounted for 44% of the overall HELOC market.
Looking for a HELOC? Try a Depository Institution
If you’re in need of a HELOC, know that they’re mostly offered by depository institutions, also known as DIs.
In 2021, 809 DIs, including 271 banks and 538 credit unions, originated 934,000 HELOCs, per the HMDA data.
That represented 97.1% of all HELOC originations reported. In other words, practically every HELOC was opened by a bank or a credit union.
This differs from first mortgages, which have been dominated by nonbank lenders over the past several years.
These nonbank lenders, or non-DIs, accounted for just 2.9% of the HELOC market.
For the record, just one of the top 25 HELOC lenders was an independent mortgage company, Figure Lending.
It’s unclear if that will change in 2022 and beyond, though these companies are looking to get in on the action by offering HELOCs and home equity loans.
For example, Rocket Mortgage launched a closed-end home equity loan (HEL) in early August.
Meanwhile, wholesale lender United Wholesale Mortgage (UWM) released two HELOCs, including a standalone and a piggyback.
Regardless, there’s a good chance a local credit union (or the bank you already do business with) will offer HELOCs.
Who Are the Best HELOC Lenders?
So we know it’s mostly banks and credit unions that offer HELOCs. The question is which one is the best of the bunch?
That’s hard to quantify because banks and credit unions offer lots of different products, not just HELOCs.
As such, reading their reviews probably won’t give us a lot to chew on. Sure, we can see how they are rated on the whole.
But that might mean nothing with regard to their home equity lending.
You still want them to have favorable ratings, but that aside, I would look at the interest rate and loan term offered.
HELOC rates can range quite a bit from bank to bank, so put in the time to see who is offering what.
And pay attention to the margin (which is added to the prime rate), the loan term (how many years to draw and pay it off), and the starting interest rate.
Also take note of any perks such as the ability to lock in your rate so it’s no longer adjustable.
Though the way things are going, HELOC rates might peak in 2023 before beginning to flatten or fall as the Fed stops raising rates (and maybe even lowers them).
Either way, be sure to exhaust all your options in your HELOC search to ensure you don’t miss out on a better deal.
Source: thetruthaboutmortgage.com