Digital HELOCs vs. Banks: Who Offers the Best Terms in 2025?
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May 13, 2025

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In 2025, real estate investors have more choices than ever when it comes to tapping their home equity. With rising property values and a tightening credit market, home equity lines of credit (HELOCs) have become an increasingly popular way for investors to fund new deals, renovations, or cash flow management. However, not all HELOCs are created equal. Should you go digital, or stick with a traditional bank? Here’s a comprehensive comparison to help you choose the best option for your investment strategy.

Unlock Your Home Equity with Figure

  • 100% online application—no in-person appraisal needed​
  • Pre-qualify in minutes; funding in as few as 5 days​
  • Borrow up to $400,000 with flexible terms​
  • Soft credit check—no impact on your score​

Why HELOCs Are a Powerful Tool for Real Estate Investors

HELOCs provide a flexible, revolving line of credit secured by your property’s equity. Unlike traditional cash-out refinances, they allow you to access only the amount you need, when you need it, and pay interest only on the drawn amount. This makes them a smart choice for real estate investors looking to move quickly on new opportunities without over-leveraging their properties.

Key Benefits of HELOCs for Investors

  • Flexibility: Use funds for any purpose—property acquisition, rehab, or ongoing expenses.
  • Interest Savings: Pay interest only on the amount you draw, reducing carrying costs.
  • Quick Access to Cash: Rapid approvals make it possible to act quickly when opportunities arise.
  • Scalable Financing: Easily tap into additional equity as your property appreciates.

For a deeper dive into why HELOCs are ideal for scaling a portfolio, check out our guide on How to Use a HELOC to Scale Your Rental Portfolio Fast.

Digital HELOCs: The Modern Alternative

Digital HELOCs, like those offered by Figure, have gained significant traction among investors seeking speed, simplicity, and transparency. Unlike banks, these platforms leverage technology to streamline the application, approval, and funding processes, often reducing the time to cash by weeks.

Advantages of Digital HELOCs

  • Speed: Funding in as few as 5 days, compared to 30+ days for traditional banks.
  • Ease of Use: Fully online applications with real-time status updates.
  • Fewer Documents: No tax returns, pay stubs, or W-2s required in many cases.
  • Flexible Terms: Competitive rates with fewer hidden fees.
  • Scalable for Investors: Some digital HELOC providers allow multiple properties without traditional bank restrictions.

Digital HELOCs are especially useful for investors who prioritize speed and scalability. For more on this approach, explore our Complete Guide to Investor HELOCs.

Traditional Bank HELOCs: Tried, True, and Trusted

While digital HELOCs are gaining popularity, traditional banks still offer compelling advantages. These include potentially lower interest rates, longer draw periods, and the stability of a relationship with a long-established financial institution.

Pros of Bank HELOCs

  • Lower Interest Rates: Often more competitive than digital HELOCs, especially for high-credit borrowers.
  • Longer Draw Periods: Some banks offer 10+ years of draw time, providing greater flexibility for long-term projects.
  • Broader Range of Financial Products: Ability to bundle with other banking services for potential discounts.
  • Established Trust: Many investors value the security and personal touch of working with a local branch.

Which is Right for You?

The choice between a digital HELOC and a traditional bank comes down to your specific needs as an investor. Here are a few key considerations:

FeatureDigital HELOCBank HELOC
Speed5-10 days30+ days
DocumentationMinimalExtensive
FlexibilityHighModerate
Interest RatesMid to HighLow to Mid
ScalabilityHighModerate
Customer ServiceOnline, 24/7In-Person, Limited

Bottom Line

For speed, scalability, and convenience, digital HELOCs often come out ahead. However, if you prioritize lower rates and value long-standing financial relationships, a traditional bank might still be your best bet.

Take the Next Step

Ready to leverage your home equity for your next investment? Get started with Figure today and see why thousands of investors are choosing digital HELOCs for faster, more flexible funding.

FAQs

Are digital HELOCs safe?

Yes, most digital HELOCs are issued by regulated financial institutions and use secure technology to protect your information.

Can I get a digital HELOC for a rental property?

Yes, some digital HELOC providers specialize in investment property financing, making it a great option for real estate investors.

How fast can I access funds with a digital HELOC?

Typically within 5-10 days, depending on the lender and your property’s equity position.

Read Next


Take the first step toward smarter real estate investing. Get started with Figure and unlock your property’s potential today!

Unlock Your Home Equity with Figure

  • 100% online application—no in-person appraisal needed​
  • Pre-qualify in minutes; funding in as few as 5 days​
  • Borrow up to $400,000 with flexible terms​
  • Soft credit check—no impact on your score​

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.

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