Navy Federal HELOC review: A strong option for members

A smiling couple seated on a sofa hold a laptop while looking into rates for a Navy Federal HELOC.Image: A smiling couple seated on a sofa hold a laptop while looking into rates for a Navy Federal HELOC.
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Navy Federal HELOC at a glance

  • Fixed or variable rate: Variable, but may convert to fixed
  • How to withdraw funds: Card, checks
  • Origination fee: No
  • Loan-to-value ratio: Up to 95%
  • Time to fund: 40 to 55 days

Navy Federal Credit Union offers a variety of financial products and services specifically for eligible members of the military community. The credit union serves 12 million members.


  • Competitive interest rates
  • High combined loan-to-value ratio limit
  • No application, origination, annual or inactivity fees


  • Only accessible to members (not available in Texas)
  • Limited branch network
  • Loans include third-party closing costs

5 things to know about a Navy Federal HELOC

If you’re considering a home equity line of credit with Navy Federal Credit Union, here are some features to keep in mind before you apply.

1. Flexible credit lines are available

Navy Federal offers lines of credit ranging from $10,000 to $500,000, giving customers a lot of flexibility in how much they can borrow. Keep in mind, though, that your maximum credit limit will depend on how much home equity you have.

For primary and secondary homes, your combined loan-to-value ratio between the HELOC and your primary mortgage cannot exceed 95%. With investment properties, it’s much lower at 70%.

2. Interest-only payments are an option

The HELOC comes with variable interest rates, but you can opt to pay interest only during the 20-year draw period. Once the 20-year repayment period begins, however, your monthly payments can increase significantly, so it’s important to budget for that.

Also keep in mind that the longer draw and repayment periods can result in more interest paid in total.

3. Interest rates are competitive

The annual percentage rate, or APR, on a Navy Federal HELOC starts as low as 8% — or 8.75% if you select the interest-only HELOC. Because the rate is variable and updates once a month, your APR (and therefore your monthly payments) can fluctuate over time.

However, the lender does set a minimum APR of 3.99% and a maximum APR of 18% on the account.

4. Costs could be lower compared to alternatives

Navy Federal doesn’t charge some of the upfront fees that other lenders may assess — the credit union has no application, origination, annual or inactivity fees.

That’s not to say there are no closing costs at all. You’ll still need to pay third-party fees, which the credit union says can range from $300 to $2,000 on lines of credit of up to $250,000. The lender doesn’t disclose a fee range for larger lines of credit. You can roll some of the closing costs into the HELOC, but not all third-party costs are eligible for that option.

5. Limited accessibility

Like many credit unions, Navy Federal requires borrowers to meet certain eligibility requirements to become a member. Membership is generally restricted to the following groups:

  • Active-duty or former military members
  • Family members of current and former military members
  • Department of Defense civilian personnel
  • Department of Defense retirees

If you prefer in-person service, note that the credit union has only 350 branches nationwide. If you don’t live near one, you may want to consider another option.

How long does a HELOC take with Navy Federal?

After you submit your application, it typically takes 40 to 55 days to close on your HELOC. But that timeline can vary if the lender requires an appraisal or additional documentation to close the loan.

Once you close the loan, you have three business days to change your mind and cancel the agreement. However, that waiting period doesn’t apply if you’re using a second home or an investment property to secure your HELOC.

Who is a Navy Federal HELOC good for?

Navy Federal’s HELOC is only available to people who qualify to join the credit union.

If you’re a member or you’re eligible to become one, you may consider this option if you want a long draw period and the option to make interest-only payments during that time. It could also be worth it if you want to avoid upfront lender fees, an annual fee and an inactivity fee. Just remember to compare the HELOC’s upfront third-party fees to closing costs that other lenders charge.

Finally, Navy Federal allows you to convert your HELOC to a fixed-rate equity loan — as long as your HELOC is older than six months. This can be a good financial move since having fixed payments can make budgeting more predictable. Conditions apply, so you’ll need to check your loan closing package for details.

How to apply for a Navy Federal HELOC

If you’re not yet a Navy Federal member, take steps to join before you apply. If you’re already a member, you can go through the application process online through the lender’s website.

Navy Federal recommends having the following information and documentation on hand when you apply:

  • Estimated value of the property
  • Navy Federal savings and/or checking account number
  • Gross monthly income
  • Current tax, homeowners association or condominium dues, insurance and lien information for all real estate owned
  • Original purchase price and purchase date of the property
  • Date the home was built
  • Information on any liens you wish to pay off
  • Two most recent pay stubs
  • Retirement statements
  • Proof of homeowners insurance
  • Trust documents (if applicable)

If you’re self-employed, you may need to provide additional documentation during the process.

Not sure if Navy Federal is right for you? Consider these alternatives.

  • Bank of America: Borrowers may be able to save with the multiple rate discounts the lender offers.
  • PenFed Credit Union: Can be a good choice if you have great credit and want a shorter draw period.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.