California homeowners seeking to borrow against their home’s value have several and flexible lending options. However, not all equity borrowing options are created equal. The best home equity loans in California offer competitive rates, transparent fees, and favorable borrowing terms to meet a variety of needs.
Whether you’re funding home improvements, consolidating credit card debt, or investing in more real estate, We’re highlighting the best home equity lenders offering fixed-rate home equity loans, equity lines of credit (HELOCs), or both. We’ve chosen the best based on borrower qualifications, loan features, and customer satisfaction.
What Is a Home Equity Loan?
As you pay down your mortgage, you build equity in your home, which is the monetary portion you truly own. You can borrow against that equity using a home equity loan or HELOC, using the home as collateral. These funds are useful for various purposes, including home improvements, medical bills, or making major purchases.
Lenders determine the amount you can borrow based on your equity, income, credit limit, and your loan-to-value ratio (LTV). These loans are typically tax-deductible when used for property improvements, though tax rules may vary. It’s essential to note that the interest is not deductible for most other uses. Consult a tax professional for more information.
Home Equity Loan vs. HELOC
Both options allow you to tap into your home’s equity, but they differ in structure and repayment terms.
Home Equity Loan
- Provides a lump sum of money upfront
- Feature fixed monthly payments with a fixed rate
- Ideal for single large expenses like renovations or debt consolidation
- Predictable payment structure offers a budget-friendly option
HELOC (Home Equity Line of Credit)
- Works as a revolving line of credit
- Features a draw period followed by a repayment period
- Interest often, but not always, based on variable interest rates
- Ideal for flexible or ongoing expenses
Which Is Better for California Homeowners?
A home equity loan is great for California residents seeking a one-time payout for significant expenses, like a kitchen remodel or debt consolidation, with a fixed APR and set monthly payments.
It’s also useful for financing investment properties or other large upfront costs. In fact, some lenders allow you to get home equity loans on existing investment properties. However, extra rules apply in those situations.
On the other hand, a HELOC is more flexible. You can access funds as needed throughout the draw period, making it an excellent choice for funding projects that evolve over time. Some lenders and online platforms now offer fixed-rate HELOCs for better payment predictability.
Related Article: Can I Get a Home Equity Loan On Investment Property?
Comparing the Best Home Equity Loans in California
California’s real estate market is as diverse as its landscape, from coastal cities like San Diego and San Francisco to suburban and rural areas. Borrowers in California experience higher home values than many parts of the County, which affects loan sizes, interest rate offers, and combined loan-to-value ratios.
We evaluated the lenders below based on many factors to determine what each is best at to help you choose the one that’s right for you. Here are the primary factors.
- Interest rate structures, including fixed and variable rates
- Qualification criteria, such as income, credit score, and LTV
- Fees and terms, including any annual fees, repayment period, and loan types available
- Customer support specifics
- Other financial products available
Top Home Equity Loan Lenders in California
LendingTree
Best for Shopping Multiple Lenders and Low APRs
Why LendingTree Stands Out
LendingTree isn’t a lender. It’s a marketplace that helps Californians compare offers for home equity loans and HELOCs, among many other financial tools. You can compare several lenders at once without multiple credit pulls, making it easier to find the best terms and protecting your credit score in the process.
Pros
- Fast comparison of multiple lenders
- Offers both equity loan and line of credit options
Cons
- Not a direct lender
- Customer service quality depends on your selected lender
Better Mortgage
Most Convenient
Why Better Stands Out
Better Mortgage is a fully online lender offering both home equity loans and HELOCs. It eliminates traditional fees, including annual fees, origination charges, and hidden costs, making it ideal for Californians who prefer convenience and cost savings.
Pros
- Streamlined approval process
- Strong customer satisfaction ratings
Cons
- Limited in-person support
- Some customers report higher-than-average interest rates
Rocket Mortgage
Best for Large Loan Amounts
Why Rocket Mortgage Stands Out
Rocket Mortgage is a top pick for its simple online process and fast approvals. It offers fixed rate home equity loans with no surprises in monthly payments. While it doesn’t offer a home equity line, it remains ideal for borrowers who want stability and clear payment terms.
Pros
- Competitive interest rates
- Best for lump-sum home improvements and debt consolidation
Cons
- No available HELOC option
- Requires higher credit scores than some alternatives
Navy Federal Credit Union
Best for Military Members in California
Why Navy Federal Stands Out
Navy Federal Credit Union serves active-duty military, veterans, and their families. It offers both home equity loans and equity lines of credit with excellent terms and low fees. Its support and educational tools cater specifically to military households, making it a standout provider in California’s military communities.
Pros
- Low fees and competitive rates
- Excellent support for military borrowers
Cons
- Membership required
- Not available to all civilians
Discover Home Equity Loans
Best for Fixed Monthly Payments
Why Discover Stands Out
Discover offers fixed-rate home equity loans with no added fees, application fees, or hidden charges. Its fixed structure is ideal for homeowners who want consistent monthly payments. However, it doesn’t offer a HELOC option.
Pros
- No extra fees
- Great for debt consolidation and remodeling projects
Cons
- No home equity line of credit option
- Generally requires a higher credit score than its competitors
How to Get the Best Home Equity Loan in California
Getting the best home equity financing in California requires more than picking a top lender. By evaluating your credit, understanding your equity, and comparing offers, you’ll maximize your approval odds and will be more likely to secure better terms.
1. Review Your Finances
Check your credit score, income, and debt-to-income ratio. Lenders generally offer better rates to borrowers with scores above 700, and minimum score requirements vary.
2. Calculate Your Equity
Subtract your mortgage balance from your home’s current appraised value. Lenders typically allow borrowing up to 80% to 90% of your existing equity. Many lenders can assist you in determining your home’s value and other calculations.
3. Compare Lenders
To compare lenders, consider the following factors. Keep in mind that many online lenders and marketplace platforms, like LendingTree, offer a pre-qualification step that allows you to shop around without affecting your credit score until you choose a loan product and officially apply.
- Interest rates
- Type of rate, such as fixed vs. variable
- Fees, including origination, application, or any membership or annual fees
- Customer support reviews
- Available loan amounts
4. Submit Your Application
After choosing a lender and loan product, be prepared to share these documents with your chosen provider. Remember that making a formal application will incur a hard inquiry on your credit report and cause a temporary reduction of your credit score.
- Proof of income
- ID and residency documents if applicable
- Recent mortgage statement
- Home valuation documents
- Bank statements
- Tax records
Whether you live in San Diego, Sacramento, or the heart of Silicon Valley, leveraging your home’s equity can be a smart financial move if done right. Be sure to compare HELOCs and fixed-rate home equity loans based on your needs and budget.
Related Article: Home Equity Loan Vs Personal Loan: Pros, Cons, Choices
Also check out: Best Personal Loans for Fair Credit
