PenFed HELOC Review: Low Closing Costs, a $99 Fee and the Catches

Is the PenFed HELOC worth it? For a lot of people, yes. PenFed picks up most of the closing costs, lines run from $25,000 to $500,000, and you get 10 years to draw what you need, when you need it.

What you give up: a $99 annual fee every year the line is open, a variable APR that can change every month, and a credit union membership you have to sign up for first.

Before you join anything, check your rate with Figure. It’s a soft pull, and funding can happen in as few as five days. Then get a second quote on a HELOC from Upstart Home Lending, where you could qualify with credit scores starting at 600.

PenFed HELOC vs. Figure and Upstart Home Lending

Here’s the quick version. The thing that really separates them is how you get the money.

Lender	How you draw	Amount	Min. credit	APR	Next step
FigureFunds in as few as 5 days	Full draw at closing	$15K to $750K	Varies by state	7.35% to 14.85%as of October 2026	Check My RateSoft pull, no credit impact
Upstart Home LendingCredit scores from 600	At least 80% at closing	$26K to $250K	Starting at 600	6.52% to 18.00%1	See If You Could QualifySoft pull to check your APR
PenFed	As needed for 10 years	$25K to $500K	Not published	From 7.000%, variableas of October 2026	See the catches

How the PenFed HELOC works

You get a line of credit against your home with a 10-year draw period. Pull money out, pay it back, pull it out again.

After year 10, the draw window closes and whatever you owe gets paid off over 20 more years.

The APR is prime plus a margin, and it can change monthly. PenFed’s rates start at 7.000% as of October 2026, which was right where prime sat on its page. Your margin depends on your file, and PenFed doesn’t post it.

The line has to be on a home you live in or a second home. You can borrow up to 85% of the home’s value, counting your mortgage (that’s the combined loan-to-value, or CLTV). Condos and homes in Texas top out at 80%.

You can lock part of the balance

This is the feature most people miss. During the draw period you can turn a chunk of your balance into a fixed-rate advance with a 240-month term.

Each one has to be at least $10,000. You can have up to three open at once and start up to two new ones a year.

So if you pull $40,000 for a roof and want a payment that won’t move, you can lock that piece and leave the rest variable. Handy. Just know it isn’t the same as a HELOC that’s fixed from day one.

What the payments look like

Here’s what $50,000 drawn at 7% works out to. These are plain math, not a PenFed quote, and your real rate will move.

See the trap? Pay only the interest for 10 years and you still owe the full $50,000 when repayment starts. Put a little toward principal along the way if you can.

What a PenFed HELOC costs

This is where PenFed earns its spot. It pays most of the closing costs for you, including the credit report, flood certification, settlement, title search and recording.

A few things stay on your side of the table.

An appraisal is on you, and it’s required on lines over $400,000. PenFed puts the average at $550 to $850. If your home is in Florida, Louisiana, Maryland, Minnesota, New York, Tennessee or Virginia, you’ll also pay the taxes there.

Then there’s the $99 annual fee, charged on every account anniversary. That’s not much on a line you’re actively using. On a line you open “just in case” and never touch, it’s $99 a year for nothing.

Who can get one

You have to become a PenFed member to get the HELOC. PenFed says everyone is eligible to apply, so membership is an extra step, not a wall.

What credit score do you need? PenFed doesn’t say. It doesn’t publish a minimum score or an income test, so you won’t know where you stand until you apply.

One more limit: your total PenFed home equity borrowing can’t go over $500,000, counting every PenFed home equity loan and HELOC together.

Soft pull, no credit impact

See a Figure rate before you join PenFed

Checking your Figure rate is a soft pull, so you’ll have a real number to hold up against PenFed’s offer.

Check My Figure Rate →Soft pull, no impact on your credit score

The catches with a PenFed HELOC

The fee never stops

$99 every anniversary, for as long as the line is open. Over the 10-year draw alone, that’s $990.

Low closing costs up front, small fee forever. Count both.

The rate can change every month

Prime goes up, your APR goes up, and so does your payment. That’s how most HELOCs work, but PenFed can adjust monthly, so you’ll feel a rate move fast.

You’re going in blind on credit

No published score means no way to tell if you’re a long shot before you apply. That’s where the online lenders are easier to deal with.

With Figure, the rate check is a soft pull and your score isn’t affected. You only take a hard pull when you go ahead with the full application. Upstart Home Lending HELOCs are available for credit scores starting at 600.

It’s not the fastest

PenFed’s quickest route is its HELOC Express program, which can fund in as few as 15 days. Figure’s number is five. If a contractor is waiting on a deposit, that gap matters.

Who it fits

PenFed makes the most sense for someone who wants a big line they’ll draw from over several years, would rather not pay a pile of closing costs and doesn’t mind joining a credit union.

If that’s not you, there are better options.

Alternatives to a PenFed HELOC

To be fair to PenFed, it does something Figure and Upstart Home Lending don’t: it lets you draw over 10 years instead of taking most or all of the money at closing. If you need a standby line, that’s a real advantage.

But if you need the cash now for one big bill, a full draw at closing isn’t a downside at all. And both of these let you check where you stand before a hard pull.

Figure is the fast one. You see your rate with a soft pull, and the money can land in as few as five days.

Lines go from about $15,000 to $750,000 ($35,000 minimum in Texas), and you get the whole amount at closing. Watch the origination fee, which can run up to 4.99%. Figure doesn’t lend in Hawaii or New York. Check your Figure rate here.

Upstart Home Lending is worth a look if your credit isn’t perfect, since you could qualify with credit scores starting at 600.

A HELOC from Upstart Home Lending comes in amounts from $26,000 to $250,000, with 10 and 15 year terms and APRs of 6.52% to 18.00%¹. The application is easy and online. You’ll need to draw at least 80% of the line at closing, so size it to what you need.

Looking at banks instead? The TD Bank HELOC is another draw-as-you-go line with small fees. And if you own your home outright or carry a big mortgage you’d like to replace, read up on a first lien HELOC.

The bottom line

Bottom line: PenFed’s HELOC is a solid pick if you want a long draw period and low closing costs, and you don’t mind joining a credit union and paying $99 a year to keep the line open.

If you want speed or a soft-pull rate check first, start with Figure, then get a second quote from Upstart Home Lending. Still like PenFed? Check today’s terms on PenFed’s HELOC page and take whichever offer costs you less on the amount you really need.

Want the rate details? Banks Done Right has a PenFed HELOC rates breakdown. More reading here: our Figure HELOC review, the Upstart Home Lending HELOC review and our ranking of the best HELOC lenders.