U.S. Bank Home Equity Review: Rates, Features and How It Compares
Written by
Sarah Sharkey
Edited by
Emily Gadd
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U.S. Bank offers both home equity loans and home equity lines of credit. If you are looking for a way to tap into the hard-earned home equity you’ve built, U.S. Bank might be the right option.
In this guide, we’ll cover what U.S. Bank offers, how its rates and fees stack up, who qualifies, and how it compares to other lenders.
Is U.S. Bank the Right Fit for You?
Ideal for:
- HELOC borrowers seeking a fixed-rate option.
- Borrowers who want to avoid closing costs.
Not ideal for:
- HELOC borrowers who want to avoid an annual fee.
- Borrowers who don’t want to open a U.S. Bank checking account.
Pros and Cons of U.S. Bank Home Equity Products
| Pros | Cons |
|---|---|
| No closing costs | Home equity loan not available in all states |
| HELOC comes with a fixed-rate option for some debt | Must have a U.S. Bank personal checking account for best rates |
| High maximum loan amount |
What Types of Home Equity Products Does U.S. Bank Offer?
U.S. Bank offers both home equity loans and home equity lines of credit. Below is a closer look at each:
Home Equity Line of Credit
A home equity line of credit gives approved homeowners the ability to borrow from their line of credit on an as-needed basis during the draw period. Once the draw period ends, you’ll repay the balance.
Generally, HELOCs come with a variable interest rate. But some U.S. Bank borrowers can lock in a fixed interest rate during the repayment period.
| Interest Rate | As low as 7.95%; variable |
| Closing Costs | $0 |
| Minimum Loan Amount | $25,000 |
| Maximum Loan Amount | $750,000 ($1 million to properties in California) |
| Application Fee | $0 |
| Early Closure Fee | 1% of the original line amount, up to $500 |
| Annual Fee | Up to $75 |
| Discounts available | Uo to 0.50% interest rate discount for borrowers making payments directly from their U.S. personal checking or savings account |
| Terms | 10-year draw period; Repayment periods of 10, 15, or 20 years |
| Borrowing options | Borrow up to 90% of your home’s equity |
Home Equity Loan
A home equity loan involves receiving a lump sum upfront, then making fixed monthly payments.
| Interest Rate | As low as 7.65%; fixed |
| Closing Costs | $0 |
| Minimum Loan Amount | $25,000 |
| Maximum Loan Amount | $750,000 ($1 million to properties in California) |
| Application Fee | $0 |
| Origination Fee | $0 |
| Annual Fee | $0 |
| Inactivity Fee | $0 |
| Terms | 10 to 30 years |
| Borrowing options | Borrow up to 80% of your home’s equity |
What Rates and Discounts Can You Get?
U.S. Bank accountholders who make their payments from their U.S. Bank personal checking or savings account can tap into an interest rate discount of up to 0.50%.
It’s not enough to be a customer of U.S. Bank, you must use the deposit account to make your payments in order to snag the discount.
Are There Fees or Closing Costs?
Homeowners won’t face out-of-pocket costs at closing through U.S. Bank.
The home equity loan doesn’t include any application fees, origination fees, annual fees or prepayment penalties.
The home line of credit doesn’t include any application fees. But it does include an annual fee of up to $75. Additionally, you may face an early closure fee of 1% of the original line amount if the line is paid off early and closed within the first 30 months.
Who Qualifies for a Home Equity Product?
If you want to tap into your home equity through U.S. Bank, plan to meet the following requirements.
- Equity requirements: You’ll need at least 10% to 20% in home equity in order to apply for a home equity-based loan.
- Credit score: Generally, you’ll need a credit score of at least 660 to qualify for a home equity product with U.S. Bank.
- Income requirements: Borrowers need to have enough income to support the loan payments. Generally, you’ll prove your income through a W-2 or tax returns.
- Debt-to-income (DTI) ratio: Typically, you’ll need a DTI below 50% to qualify for a home equity product.
For self-employed homeowners, tapping into your home equity is still possible. But you’ll likely need to share more information about your income to get approved for the loan.
What’s the Application Process Like?
- How to apply: Online or by calling 1-800-642-3547
- Prequalification: You can get an idea of whether or not you’ll get approved for a loan with a soft credit pull during a prequalification.
- Funding time: Usually 30 to 40 days
- Documents needed: Proof of income, property tax info, mortgage statement, tax returns, original purchase price, and more.
How Does U.S. Bank Compare to Other Lenders?
U.S. Bank offers a solid option for homeowners looking to borrow against their equity. It’s an especially attractive option for homeowners with high-value homes looking for large loan amounts.
Below is a look at how U.S. Bank home equity lending options stack up against the competition:
| Starting APR | Closing Costs | Maximum Loan Amount | |
|---|---|---|---|
| U.S. Bank | As low as 7.65%; fixed | $0 | $750,000 (Up to $1 million in CA) |
| Navy Federal Credit Union [3] | As low as 7.750%; variable | $0 | $500,000 |
| Four Leaf Federal Credit Union [3] | As low as 7.50%; variable | $0 | $500,000 |
| Fifth Third Bank [4] | As low as 7.50%; variable | $0 | $500,000 |
Final Verdict: Should You Choose U.S. Bank?
U.S. Bank offers a worthwhile option for homeowners with stable financial situations. It’s especially attractive for homeowners seeking to tap into relatively large loan amounts. Additionally, customers with existing U.S. Bank accounts can find extra value through the available interest rate discounts.
Key Takeaways
- Minimum credit score: 660
- Most users will qualify if they have 15%+ home equity and a solid income.
- Best for: Homeowners with a solid financial situation hoping to tap into a significant amount of their home equity.
- Online tools are strong.
FAQ
- Does U.S. Bank offer fixed-rate HELOCs?
- Yes, homeowners can tap into a fixed-rate option for up to 20 years on funds borrowed during the draw period.
- What happens if I pay off my loan early?
- If you pay off your HELOC and close the account within the first 30 months, you'll face an early closure fee of 1% of the original line amount.
- Is the interest tax-deductible?
- If you use the funds from a home equity loan or HELOC to buy, build, or substantially improve your home, the interest might be tax-deductible. But if you use the funds for other reasons, like paying for a vacation or medical bills, the interest isn't tax-deductible.
- Do I need to be a customer to apply?
- No, you don't need to be an existing customer to apply for home equity lending through U.S. Bank.
