Low Interest HELOC for Veterans

Accessing your home’s equity through a secured Home Equity Line of Credit can be a strategic financial move, especially for veterans seeking low-interest options. The RefiGuide explains the best HELOC options for veterans in 2025, covering eligibility requirements, credit score requirements and current home equity interest rates and lenders offering favorable terms.

• Low Interest HELOC for Veterans
• Best HELOC for Veterans in 2025
• Special Military HELOC loans
• HELOC credit score requirements for veterans
• Affordable Home Equity Loan for Veterans
• Great HELOC Rates for veterans 2025

Additionally, we published two case studies that illustrate how savvy veterans can effectively utilize military HELOCs and home equity loans.

What is the Best HELOC for Veterans in 2025?

Identifying the best HELOC for veterans involves evaluating factors such as interest rates, loan-to-value (LTV) ratios, repayment terms, and lender benefits tailored to military members.

Several military mortgage lenders stand out in 2025 for offering competitive HELOC options to veterans:​

• Navy Federal Credit Union (NFCU): NFCU allows borrowing up to 95% of your home’s equity with competitive interest rates. They offer both variable-rate HELOCs and fixed-rate home equity loans, providing flexibility based on your financial needs. ​

• PenFed Credit Union: PenFed offers HELOCs with amounts ranging from $25,000 to $500,000 and repayment terms of 10-year draw periods followed by 20-year repayment periods. A minimum credit score of 700 is required.

• Armed Forces Bank: Known for low promotional APRs, Armed Forces Bank offers HELOCs with introductory rates as low as 5.99% for the first six months, followed by variable rates. They also provide options to waive annual fees and have low closing costs.

When selecting a HELOC, consider your borrowing needs, repayment capacity, and the specific benefits each lender offers to veterans.​

What Credit Scores Do You Need for Military HELOC Loans?

Credit score requirements for HELOCs can vary by lender, but generally, a higher credit score improves your chances of approval and securing favorable terms. For military-focused lenders:

For most military HELOC loans, lenders typically require a minimum credit score between 620 and 700, depending on the institution. Credit unions like Navy Federal Credit Union may approve applicants with scores starting around 620, while others, such as PenFed, prefer borrowers with scores of 700 or higher for the best rates. A higher score can unlock lower interest rates, better terms, and greater borrowing limits. If your credit is below average, improving it before applying—by reducing debt and making timely payments—can significantly boost your chances of qualifying for a favorable military HELOC loan.

Maintaining a strong credit profile not only aids in HELOC approval but also influences the interest rates offered.​

Who Offers the Low Interest Home Equity Loans and HELOCs for Veterans?

Several financial institutions cater specifically to veterans, offering home equity loans and HELOCs with favorable terms:​

• Navy Federal Credit Union: Offers both veteran home equity loans and HELOCs, allowing borrowing up to 100% of your home’s equity.

• PenFed Credit Union: Provides HELOCs with competitive rates and terms tailored to veterans and military families. ​

• Armed Forces Bank: Offers HELOCs with promotional introductory rates and flexible terms, designed to meet the needs of military members. ​

It’s essential to compare offers from multiple lenders to find the best fit for your financial situation and goals.​

What Are the Current HELOC Rates for Veterans?

As of April 2, 2025, the average HELOC interest rate in the 10 largest U.S. markets is approximately 7.90%.

However, military HELOC rates can vary based on the lender, your credit profile, loan amount, and LTV ratio.

For example from check out these lender rate quotes from BankRate:

• Navy Federal Credit Union: Offers variable APRs as low as 7.75%, with rates based on an evaluation of credit history, CLTV ratio, line amount, and occupancy.

• Armed Forces Bank: Provides introductory rates as low as 5.99% for the first six months, with post-promotional period APRs around 7.49% with auto-draft payments.

To secure the best VA HELOC rate, it’s advisable to maintain a strong credit score, compare offers from multiple lenders, and consider the loan terms that best suit your financial needs.​

Case Study 1: Veteran Utilizes a HELOC for Home Renovations

Background: John, a retired Navy veteran, owns a home valued at $300,000 with an outstanding mortgage balance of $150,000. He wishes to renovate his kitchen and bathrooms, estimated to cost $50,000.​

Solution: John applies for a HELOC with Navy Federal Credit Union, which allows borrowing up to 95% of his home’s equity. Given his home’s value and existing mortgage, John is eligible to borrow up to $135,000. He secures a HELOC with an initial variable APR of 7.75%.

Outcome: John uses $50,000 from his HELOC to complete the renovations, enhancing his home’s value and comfort. He benefits from the flexibility of drawing funds as needed and making interest-only payments during the draw period.​

Case Study 2: Military Veteran Consolidating Debt with a HELOC

Solution (continued):
Sarah explores a HELOC with PenFed Credit Union, which offers up to 85% LTV and competitive variable rates. With $150,000 in available equity and a credit score of 720, she qualifies for a $50,000 HELOC. She draws $30,000 to pay off her high-interest credit cards and locks in a portion at a fixed rate for five years to protect against rising interest rates.

Outcome:
Sarah reduces her monthly payments by over $400 and lowers her interest rate from over 20% to just under 8%. The flexible repayment terms allow her to pay off the balance on her own timeline while improving her credit score due to a significantly lower credit utilization rate. Most importantly, she regains peace of mind and financial control.

Why a HELOC for Veterans Is Like a Swiss Army Knife

A HELOC for veterans is like a Swiss Army knife in your financial toolkit—versatile, reliable, and ready for anything life throws at you. Whether you’re renovating a kitchen, consolidating debt, covering education expenses, or investing in another property, a low-interest HELOC for veterans gives you options—on your terms.

Unlike traditional loans with fixed lump-sum amounts, HELOCs provide flexibility. You borrow only what you need, pay interest only on what you use, and often have the option to lock in fixed rates on your terms. For veterans, many credit unions and banks go the extra mile—offering low rates, relaxed fees, and tailored repayment plans.

Pros and Cons of Veteran HELOC Programs

✅ Pros:

• Low introductory and long-term rates for qualified veterans

• Flexible borrowing terms (draw and repayment phases)

• Option to lock in fixed rates with some lenders

• Interest may be tax-deductible if used for home improvements

• Special perks for military families (waived fees, auto-payment discounts)

❌ Cons:

• Variable interest rates can increase over time (unless locked)

• Minimum credit score requirements apply (usually 620–700)

• Closing costs or annual fees may be charged

• Risk of overborrowing against home equity if not managed wisely

Tips for Choosing the Best HELOC for Veterans

1. Compare Rates & Terms: Look at both variable and fixed rate options, especially if you’re borrowing a large amount.

2. Consider Fees: Some lenders waive application, appraisal, or annual fees for veterans.

3. Check Credit Requirements: If your score is below 680, shop around—some credit unions are more flexible.

4. Evaluate Draw Periods: Make sure the draw and repayment terms align with your financial goals.

5. Ask About Fixed-Rate Conversion Options: Great for managing large projects like renovations.

6. Choose Lenders That Understand VA Borrowers: Like Navy Federal, PenFed, and Armed Forces Bank.

Frequently Asked Questions for Veteran HELOCS

Can I get a HELOC on a VA loan?

Yes, veterans can get a HELOC even if they currently have a VA loan. However, it won’t be backed by the VA. The HELOC is considered a second lien if you already have a first mortgage.

Can I get a fixed rate on my Veteran HELOC?

Yes. Many lenders offer fixed rate options within a HELOC. You can often lock in a fixed rate on a portion or all of your drawn balance, depending on the lender’s terms. More and more mortgage lenders are offering a fixed-rate HELOC loan, so find out the specific details when shopping lenders online.

Can Veterans get HELOCs with bad credit?

It’s possible but more difficult. Some lenders may approve HELOCs with scores as low as 620, but expect higher interest rates. Improving your credit score first is recommended for better terms. Learn more about the HELOC with bad credit. Military Veterans can get HELOCs with bad credit, but options may be limited. Some lenders and military-friendly credit unions, like Navy Federal, may approve borrowers with credit scores as low as 620. However, interest rates are typically higher, and loan terms may be less favorable. Improving your credit score before applying—by paying down debt and making on-time payments—can help you qualify for better rates and increase your chances of approval.

Is a HELOC better than a VA Cash-Out Refinance?

It depends. The VA cash-out refinance loan replaces your existing mortgage, while a HELOC is a separate line of credit. If you have a low VA loan rate already, a HELOC may allow you to access equity without refinancing your entire loan. It’s ideal if you have a low first mortgage rate you want to keep. A VA cash-out refinance replaces your current mortgage with a new VA-backed loan and allows you to access equity in a lump sum. It may be better if you want to lower your interest rate or consolidate debt into one payment.

Is a Low-Interest HELOC Right for You as a Veteran?

In 2025, veterans have more options than ever to access home equity with flexibility, low rates, and military-friendly terms. Whether you’re looking to fund home improvements, eliminate high-interest debt, or simply have a financial cushion for emergencies, a low-interest HELOC for veterans is a powerful tool.

The best HELOC lenders for veterans—such as Navy Federal, PenFed, and Armed Forces Bank—offer competitive VA HELOC rates, customized benefits, and flexible terms. Many even allow fixed-rate conversions, which protect you from future rate hikes. And with credit score requirements ranging from 620 to 700, there’s room for veterans at various financial stages to qualify.

The key to choosing the right HELOC? Shop around. Compare terms. Ask questions. And pick the loan that fits not just your wallet—but your life.