Discover® Home Equity Loans offer lower-than-average minimum APRs and no application, loan or appraisal fees — a standout feature among lenders, especially since closing costs can amount to up to 6% of the total loan amount.
We also like that Discover approves loans in almost every state, even for borrowers with as little as 10% equity. Other mortgage lenders have stricter requirements and are much more geographically restricted.
But if you’re looking for a smaller loan (or even a very large loan), keep in mind that Discover only approves mortgages from $35,000 to $300,000.
Discover® Home Equity Loans
Annual Percentage Rate (APR)
Apply for personal rates online
Minimum and maximum loan amounts
Minimum: 35,000; Maximum: $300,000
Available Terms Credit Required Minimum Equity Required Higher than average 90% combined loan-to-value ratio. No origination fees, appraisal fees, upfront fees, or interest rate lock-in fees Interest rate locked when application is submitted Free online application Fewer brick-and-mortar locations Fewer other mortgage options Must apply online or over the phone Show Less
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A home equity loan allows you to borrow money against the equity in your home, which is the difference between your mortgage balance and the market value of your home.
Unlike a home equity line of credit, which is essentially a revolving line of credit, a home equity loan allows you to access a specific amount of money all at once. Most loans have a fixed interest rate, and borrowers make regular monthly payments over a pre-determined period of time.
This money can be used for any purpose, such as home repairs, paying for emergency medical expenses, or paying off high-interest debt like credit card bills.
Discover offers mortgage loans in every state except Iowa and Maryland.
APR: Fixed-rate options from 7.99% to 12.86% (as of July 2024)Repayment terms: 10, 15, 20, or 30 yearsLoan minimums and maximums: $35,000 to $300,000Time to close: 6 to 8 weeksCredit score: Discover requires a credit score of at least 680 for a home equity loan.Cumulative loan-to-value ratio (CLTV): A comparison of the total mortgage amount to the value of the home. Most lenders want a ratio of 80% or less, but Discover accepts CLTVs up to 90%.Debt-to-income ratio (DTI): The total portion of a homeowner's monthly income that goes towards paying off debt. Discover requires a DTI of 43% or less.Home appraisal: A full appraisal is required, but Discover doesn't charge a fee. Lender Fees: Discover doesn't charge application fees, loan fees, appraisal fees, or settlement costs. Prepayment Penalties: There are no fees if you pay off your loan early. Rate Lock-in Fee: Discover will lock in your fixed interest rate for free as soon as your application is complete.
Discover wasn't included in J.D. Power's mortgage study, but it ranked No. 2 in the 2024 Consumer Lending Satisfaction Study, which measures customer feedback on loan details, ease of doing business, reliability and staff.
The Better Business Bureau awarded Discover its highest rating, an A+ rating, based on the company's actions, including transparency, honest advertising, and response to consumer complaints.
Here's how Discover compares to two other mortgage lenders.
Check out our mortgage comparison chart
Discover®TD BankRocket MortgageMinimum Credit Score680660680Min. Loan Amount$35,000$10,000$45,000Max. Loan Amount$300,000$500,000+$500,000Max. CLTV90%90%90%Time to Close6-8 WeeksNot PublicNot PublicAvailabilityAll states except Iowa and Maryland13 statesAll 50 statesBest UsesLow Interest RatesIn-Person SupportCustomer Service
Discover
TD Bank Home Equity Loan
Annual Percentage Rate (APR)
Apply for personal rates online
Minimum and maximum loan amounts
Minimum: $10,000, Maximum: $500,000 with no additional requirements
Availability Credit requirements Minimum equity requirementHigher than average 90% overall loan-to-value ratio Online application available Many brick-and-mortar locations Higher maximum loan amount Low minimum loan amount Some one-time and annual fees Available in only 15 states Show less
TD Bank's interest rates on a 10-year, $30,000 mortgage start at 8.84%, which is higher than both Discover's minimum APR of 7.99% and the industry average of 8.60%, and TD charges a $99 origination fee that Discover doesn't charge.
But which lender is better for you will ultimately depend on the size of your loan, where you live, and whether you prefer an online or in-person experience.
Discover only approves loans between $35,000 and $300,000, while TD Bank will lend from $10,000 to $500,000 (and more under certain conditions).
Discover is the winner when it comes to availability, issuing loans in 48 states and Washington, D.C. Meanwhile, TD Bank only serves 15 states and Washington, D.C. TD Bank has over 1,000 branches for in-person service, while Discover only lets you apply online or over the phone.
Discover vs. Rocket Mortgage
Rocket Mortgage Home Equity Loan
Annual Percentage Rate (APR)
Apply for personal rates online
Minimum and maximum loan amounts
Minimum: $45,000 Maximum: $500,000
Available terms Credit requirements Minimum equity requirement Higher than average 90% overall loan-to-value ratio High customer satisfaction reviews Excellent online user experience Relatively high minimum amounts Minimum loan amount is $45,000 No brick-and-mortar locations Only two term options offered: 10 and 20 years View less
Comparing Discover with fellow online lender Rocket Mortgage is somewhat of a tie, as Rocket doesn't disclose its minimum APR.
However, Discover doesn't charge origination or closing fees, while Rocket Mortgage charges a $99 origination fee and a closing fee that ranges from 2% to 6% of the loan. Rocket also limits repayment terms to 10 or 20 years, while Discover offers 10-, 15-, 20-, and 30-year options.
When it comes to availability, Rocket Mortgage has a slight edge: Rocket Mortgage approves loans nationwide, while Discover lends in just 48 states.
Loan limits may be a bigger issue: Discover has a mortgage limit of $300,000, while Rocket has a limit of $500,000.
Discover Home Loan Pros and Cons.
Strong Points
We accept loan-to-value ratios up to 90%. There are no lender fees or settlement costs. We also offer mortgage refinancing. Available in most states.
Cons
Purchase mortgages and home equity loans are not available. You must apply online or over the phone. The minimum loan amount is $35,000, higher than most loans, and the maximum loan amount is $300,000, lower than most loans.
While you can't apply in person, you can apply for a mortgage through Discover's website or by calling 855-361-3435 between 8 a.m. and midnight ET Monday through Friday, or 10 a.m. and 6 p.m. Saturday and Sunday.
You'll need to provide personal information like your name, address, date of birth, employment status and income, as well as information about your home, including the property type, estimated value and current mortgage balance.
To get a customized quote, you'll need to upload your ID, mortgage statement, W2, and homeowners insurance policy. You may also need to mail in additional documents.
According to Discover, the process from quote to settlement date typically takes six to eight weeks, and while some lenders promise faster settlements, your mortgage timeline will vary depending on a variety of factors, including the amount you borrow, your credit history, and how quickly you can schedule an appraisal.
If cost and availability are important to you, a mortgage from Discover could be your best option: Its minimum APR is lower than many competitors, and it doesn't charge lender fees.
Additionally, Discover lends in all but two states and boasts easily accessible loan officers and a track record of excellent customer service.
But if you're looking to borrow a large amount, you may want to consider other options: Discover's mortgage limit is $300,000, while other lenders will lend up to $500,000 or even more.
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FAQ
What credit score do I need for a Discover mortgage?
Discover prefers mortgage borrowers to have a FICO 680 credit score.
How long does it take to be approved for a Discover mortgage?
According to Discover, the initial eligibility check takes about one to two weeks, followed by two weeks of review and closing. From application to closing, the entire process takes six to eight weeks.
Does Discover offer a Home Equity Line of Credit (HELOC)?
Discover offers mortgages and mortgage refinancing but does not offer mortgage lines of credit.
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