Discover Home Equity Review: Rates, Features and How It Compares

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Discover home equity loans offer low rates, no fees and higher-than-average loan limits. It’s a solid choice for borrowers with high credit scores and verifiable income. Here’s how to decide if Discover is the right lender for you. 

Quick Summary: Is Discover the Right Fit for You?

Discover® Bank, Member FDIC, is a strong choice for homeowners looking for affordable home equity loans. With no fees and rates that are lower than average, it’s a top contender if you want predictable payments and low borrowing costs. However, Discover HELOCs are not on offer, so it may not be the best fit if you need more flexible access to your home’s equity.

• Ideal for:
  • Homeowners with high credit scores.
  • Borrowers who want to pay zero fees.
• Not ideal for:
  • Borrowers who need a HELOC.
  • Anyone who needs fast funding.

Pros and Cons of Discover Home Equity Products

Discover’s rates are competitive, and you can have a combined loan-to-value ratio of up to 90% — much more than you can borrow with most lenders. However, it takes a long time to get the funds, and the application is complex.

Here’s a look at some of the benefits and drawbacks of Discover home equity loans.

What Types of Home Equity Products Does Discover Offer?

You can use your equity to borrow money in two ways: home equity loans and HELOCs. Discover only offers a home equity loan, so you can’t work with the bank to get a Discover HELOC. 

The limited home equity products might be a dealbreaker for some borrowers. But if you’re looking for a home equity loan, Discover is a solid option.

Discover Home Equity Loan Features

• Fixed-rate
• Terms of 10, 15, 20 or 30 years
• $35,000 – $300,000 loan amounts
• Availability varies by state

What Rates and Discounts Can You Get?

Discover offers a fixed interest rate from 7.81% to 12.44% APR. Your credit score, income and other factors determine your rate. 

The bank doesn’t have any rate discount for home equity loans. 

Are There Fees or Closing Costs?

Discover doesn’t charge any fees, and there’s zero due at closing, making it one of the most affordable home equity loan options. 

You won’t pay any application fees, origination fees, annual fees, appraisal fees, closing cost fees or prepayment penalties. 

You might have a late payment fee for missed or late payments, though. 

Who Qualifies for a Home Equity Product?

Discover is transparent about the qualification process for a home equity loan. Here are the minimum eligibility requirements: 

Can You Qualify?

• Is my credit score at least 680?
  • Tip: You can get a free copy of your credit report at AnnualCreditReport.com or check your credit score for free.
• Can I verify my income and provide pay stubs?
  • Tip: If you’re self-employed, you might need to submit extra documentation, including tax returns. 
• Is my loan-to-value ratio at least 85%?
  • Tip: Here’s the formula you can use to calculate your LTV: [Current loan balance ÷ Current appraised value]
• Do I know how much debt I have compared to my income?
  • Tip: Figure out how much debt you have, including credit cards and loans.

What’s the Application Process Like?

Discover’s application process is easy to understand: apply, wait for a decision and then finalize the loan. Here are some steps to get you started:

1. Start the application: You can apply online or over the phone. You’ll need to provide basic information about your identity and finances. 
2. Prequalification: Once you apply, Discover will send you a personalized quote. You can ask questions over the phone and upload documents to finalize the application. Discover requires proof of income, government-issued ID, property tax information and a mortgage statement.
3. Get ready to close: You’ll need to complete a few additional steps like an appraisal. After that, you’ll wait for the loan to close. 
4. Sign the documents: Finalize the loans with your signature and receive the money three days later. 

While the process is simple, it can take up to eight weeks to complete, which might be too long for some borrowers. 

How Does Discover Compare to Other Lenders?

Discover stands out with low rates and low fees. Plus, you won’t pay any money when you close. Here’s how Discover compares to similar lenders:

Final Verdict: Should You Choose Discover?

Choose Discover Home Equity Loan if:

• You have a strong credit score.
• You’re only interested in a home equity loan, not a HELOC.
• You want fixed, straightforward rates.
• You want $0 closing costs and can wait up to 8 weeks.

Look elsewhere if:

• You have lower credit and can’t meet the minimum requirement.
• You need quicker funding in 2-3 weeks.
• You prefer rate discounts or introductory rates that increase later.
• You want a HELOC.

Key Takeaways

• Discover offers home equity loans with low rates and absolutely $0 fees.
• Minimum credit score: 680.
• Borrowers need a high credit score, solid income and a debt-to-income ratio of less than 43%.
• Online tools and customer support are strong, but the loan process takes a long time. 
• Best for: Borrowers with good credit who don’t need funds right away. 

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

Data is accurate as of April 24, 2025, and is subject to change.

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