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Published: Jul 20, 2023 11 min read

Best for Lowest Home Equity Rates

The interest rate on your home equity line of credit (HELOC) tremendously impacts your cost over the life of the loan. With a lower interest rate, you’ll pay less for the money you borrow. Third Federal rates are guaranteed to be the lowest; if you find a lower interest rate with comparable terms, they’ll match it or pay you $1,000.

The amount you will spend on additional fees or costs is also significantly low, as they don’t charge application fees, origination fees or closing costs. This can save you a substantial amount of money upfront.

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Third Federal HELOC Pros and Cons

  • Lowest interest rate guarantee
  • No closing costs, application fees or origination fees
  • No minimum draw requirements
  • Limited availability
  • No interest-only payments on HELOCs
  • Preapproval requires a hard credit pull

Pros explained

Lowest interest rate guarantee

Third Federal Savings and Loan HELOCs come with a lowest rate guarantee, which offers customers the lowest rate available for similar HELOCs on the market. By combining this with their Early Approval program, you can lock in a guaranteed lowest rate at the preapproval stage, which is earlier than many lenders allow. This protects you from rising rates. If interest rates decrease even further after locking in the rate, you can receive the lower rate by simply asking. If you find a lower purchase rate elsewhere, Third Federal promises to beat that rate or pay you $1,000.

No closing costs, application fees or origination fees

Third Federal doesn’t charge customers any closing costs. Closing costs may include expenses such as credit bureau reports, appraisals, title work, flood evaluations, mortgage filings and other miscellaneous fees. You also won’t have to pay an application fee or a loan origination fee, which many other lenders charge to help recover the costs of processing loan applications, underwriting the loans and other services related to originating a home equity account. Additionally, you don’t have to pay prepayment penalties if you pay off your Third Federal loan early.

No minimum draw requirements for HELOCs

With a Third Federal HELOC, there’s no required minimum draw, although the minimum loan amount is $10,000. With no minimum draw requirement, you won’t be locked into borrowing more money than you need. This can be more convenient in situations where you aren’t sure exactly how much you need to borrow, such as if you need to cover an unexpected home repair.

Cons explained

Limited availability

Third Federal HELOCs are available in only 24 states and Washington, D.C., and home equity loans are only available in eight states, including California, Florida, Kentucky, New Jersey, North Carolina, Ohio, Pennsylvania and Virginia.

No interest-only payments on HELOCs

Unlike many lenders, Third Federal HELOCs don’t offer interest-only payment options. This means your payments may be higher from the beginning. If you want to defer larger payments during the draw period, this could be a disadvantage. However, Third Federal notes that most customers save around $8,000 over the course of their loan by avoiding interest-only payments.

Preapproval requires a hard credit pull

Third Federal doesn’t publish its minimum credit score requirement for home equity products. You’ll have to complete a full application to determine if you qualify. A hard inquiry into your credit can lower your score, so it's valuable to know your chances before you apply. However, Third Federal doesn't increase your interest rate based on your credit score.

Third Federal HELOC Offerings

Home equity lines of credit (HELOCs)

Third Federal makes HELOCs available in 24 states (plus Washington, D.C.). You can apply for a credit line ranging from a minimum of $10,000 to a maximum of $200,000. These HELOCs feature a 10-year draw period, during which you can actively borrow against your home's equity. Once the draw period ends, you have a 30-year repayment term to settle the borrowed amount.

Although Third Federal does not impose origination fees or closing costs on their HELOCs, there is an annual fee of $65, which Third Federal waives for the first year. It's important to note that Third Federal does not allow you to make interest-only payments during the draw period, which may result in higher initial payments but can save you money over the long term. Additionally, Third Federal guarantees the lowest rate; if you discover a lower interest rate with another lender, Third Federal pledges to either match that rate or pay you $1,000 if they can't.

Home equity loans

Third Federal Savings & Loan offers various options for home equity loans with different terms. Below you’ll find the loan details for each one:

  • Fixer Upper Home Repair Loan: This loan is available for homeowners who want to make repairs to their homes. Some of the specifics of this loan include:
    • Low monthly payments, with the option to pay as little as $10 per month
    • No hidden fees and Third Federal pays all closing costs
    • Loan amounts can range between $1,000 and $9,900
    • Only available in participating counties in Ohio and Florida.
  • Low monthly payments, with the option to pay as little as $10 per month
  • No hidden fees and Third Federal pays all closing costs
  • Loan amounts can range between $1,000 and $9,900
  • Only available in participating counties in Ohio and Florida.
  • 5/1 Adjustable Home Equity Loan: This loan has an initial fixed rate for the first five years, after which you'll have a variable interest rate that is adjusted once a year.
  • 10-Year Fixed Rate Home Equity Loan: This loan offers a fixed rate over a 10-year term.
  • 5-Year Fixed Rate Home Equity Loan: This loan offers a fixed rate over a 5-year term.

Third Federal HELOC Pricing

Third Federal offers one of the lowest-cost options for obtaining a home equity line of credit or a home equity loan. It doesn’t charge application, origination or closing fees. There is a $65 yearly fee for a HELOC, but it’s waived for the first year. If you pay off your loan early, you won’t have to pay prepayment fees.

Third Federal HELOC Financial Stability

Third Federal Savings and Loan has been in business since 1938. The majority — 99% — of its deposits come from individuals, not businesses. It’s had a five-star (superior) rating from Bauer Financial, an independent bank rating agency, for over 35 years. In addition, it keeps more than double the capital reserves required by federal regulations, giving it excellent financial stability.

Third Federal HELOC Accessibility


One of the biggest downsides to Third Federal is its limited availability. Third Federal HELOCs are only available in Washington, D.C. and the following states:

  • California
  • Colorado
  • Connecticut
  • Florida
  • Georgia
  • Illinois
  • Indiana
  • Kentucky
  • Maine
  • Michigan
  • Maryland
  • Minnesota
  • Missouri
  • North Carolina
  • New Hampshire
  • New Jersey
  • New York
  • Ohio
  • Oregon
  • Pennsylvania
  • Tennessee
  • Virginia
  • Washington
  • Wisconsin

Home equity loans are available only in the following states:

  • California
  • Florida
  • Kentucky
  • New Jersey
  • North Carolina
  • Ohio
  • Pennsylvania
  • Virginia

Additionally, the Fixer Upper Home Repair Loan is only available in certain counties in Ohio and Florida.

Contact Information

Third Federal Savings & Loan can be contacted through various means:

  • Phone: You can contact their customer service by calling 1-800-THIRD-FED (1-800-844-7333).
  • Mail: You can send mail to their corporate headquarters at the following address: Third Federal Savings and Loan, 7007 Broadway Avenue, Cleveland, OH 44105
  • Website: Once you become a Third Federal customer, you can also message one of their representatives through their online banking portal.
  • Branch Locations: Third Federal Savings & Loan has branches in Ohio and Florida. You can visit a local branch for in-person service. The branch locator on their website can help you find the nearest one.

User Experience

Unfortunately, Third Federal isn’t as forthcoming as other lenders about their requirements regarding eligibility or required documentation. In general, you’ll need to provide one month's pay stubs and the most recent W2 statements for each borrower. If you are self-employed, you must submit two years of complete personal tax returns, W2s and schedules included. You’ll also need to provide other supporting documentation about your income, assets and the property.

You can complete the application online, but to close the loan, you’ll need to visit a branch, a local title company, or arrange a meeting with a loan representative at your home.

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Third Federal HELOC Customer Satisfaction

Although Third Federal has an A- rating from the Better Business Bureau, its customer ratings average 1.75/5. Negative Third Federal bank reviews focus mainly on slow funding and denied applications. There are also positive reviews that mention its low rates and an effective application process.

Third Federal HELOC FAQ

Is Third Federal a good bank?

Third Federal Savings and Loan has a superior rating from Bauer Financial, which rates the financial strength of banks, and an A- rating from the Better Business Bureau. However, it does have a low average rating from customers on the BBB website.

Is Third Federal bank legit?

Third Federal bank is legitimate. It has been open since 1938 and consistently receives superior ratings from an independent backing agency.

What does your credit need to be for a home equity line of credit?

Third Federal credit score requirements aren't disclosed, but generally, lenders look for a credit score of at least 620 to 700. Some lenders might approve a HELOC for borrowers with a score below this range, but the terms may not be as favorable.

It's important to note that while your credit score is a significant factor in qualifying for a HELOC, lenders also consider other factors. These include your debt-to-income ratio and the amount of equity you have, which is why you need to understand how to build equity in a home.

How we Evaluated Third Federal HELOC

  • Pros and Cons: We weighed Third Federal’s overall home equity line of credit pros and cons, taking into account the features it provides and its standing in comparison to other home equity loan originators.
  • Pricing: We analyzed Third Federal's transparency concerning interest rates, service fees, closing costs and other expenses such as appraisals.
  • Offerings: We checked the types of loans Third Federal offers, including the flexibility of their terms, and evaluated the minimum and maximum loan amounts and the amount of home equity that customers can borrow.
  • Customer Experience and Satisfaction: We sifted through complaints and reviews lodged with the Better Business Bureau to gauge the level of customer happiness with Third Federal.
  • Accessibility: We examined the eligibility criteria, application process, and the states where Third Federal operates. We also looked into how easy it is to contact them.

Summary of Money's Third Federal HELOC Review

Third Federal mortgage rates are among the lowest in the industry. With minimal fees and a lowest-rate guarantee, Third Federal is a great option for homeowners looking to borrow on their home equity without paying a fortune in interest and fees. However, Third Federal’s limited availability restricts the number of people who can access their competitive rates. Additionally, Third Federal reviews for customer satisfaction are below average. To benefit from Third Federal's low rates, you'll need to own property in a state they service and be willing to undergo a hard pull on your credit to determine if you qualify.

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