Third Federal Review

Third Federal began during the peak of the Great Depression in order to help struggling residents in Ohio, where it is still headquartered, achieve the dream of homeownership and financial security. Today, Third Federal has over $12 billion in assets with branches in Ohio and Florida and is considered to be one of the leading lenders in the mortgage industry.

Third Federal was rated 5 stars by Bauer Financial, an independent rating industry, for offering extremely low rates on home purchases and refinances along with high dividend rates on accounts.

How Third Federal Stacks Up

  • Rates lower than the national average
  • Offers a “lowest rate guarantee”
  • High annual percentage yield (APY) on CDs
  • Not nationwide
  • Does not offer personal, auto or student loans or credit cards
  • HELOC annual fee

What’s Interesting About Third Federal

Third Federal offers some of the lowest rates available, with rates sitting as low as 2.89% for a home purchase, refinance or home equity loan. It also offers a “lowest rate guarantee” wherein if you qualify for a lower rate at another financial institution, it will attempt to match or beat that rate. If it cannot beat that rate, it will give you $1,000.

In addition to the lender’s incredibly low rates for loans, it also carries exceptionally high APY rates on a certificate of deposit (CD). You can open up a CD for just $500, and terms range from 12 months to 72 months, while the APY can go as high as 2.15%. It also offers a rolling 30-day CD at a rate of 1.70%.

Things to Consider

Unfortunately, Third Federal is not a nationwide provider of mortgages and home equity loans, meaning that not everyone can enjoy its low interest rates. It only serves 26 states for these products, primarily sitting on the East Coast, with Oregon and Washington being the West Coast exceptions. Check that you qualify based on the state you live in before doing extensive research into the products that Third Federal has to offer.

It also does not offer any other types of loans such as auto, personal or student loans. Moreover, it does not offer credit cards. If you’re looking for a financial institution that can do it all, Third Federal isn’t the one.

Lastly, if you are going to borrow via a HELOC (home equity line of credit), expect to pay a $65 annual fee. An annual fee on a HELOC isn’t necessarily out of the ordinary, but it is something to consider before you decide to borrow.

Checking and Savings Accounts

Third Federal offers both high-yield checking and savings accounts with tiered dividend rates, meaning the more money you have in the account, the more dividends you will earn on your cash. If you have at least $10 in your checking account, you can earn 0.10% on those funds, with the same APY applied to a savings account. If you have at least $25,000 sitting in your checking or savings, you could earn 0.25% on those dividends. Finally, if you have at least $100,000 in your savings, that could get you 0.70% dividends. Many financial institutions do not offer dividends on checking accounts, making this a major benefit of Third Federal.

Money Market Accounts

Money market accounts are not offered by Third Federal. However, some larger institutions that do offer money market accounts at a high APY include Capital One, Discover and TIAA Bank.


The annual percentage yield offered for CDs at Third Federal is higher than the national average. According to the FDIC, the average APY on a 12-month CD sits around 0.60 to 0.70%. With Third Federal, a 12-month CD sits at 1.25%, giving customers a high dividend payout. You only need $500 to open up a CD and can earn as much as 2.15% on your money if you open a 72-month CD. It also offers retirement CDs as well as a rolling 30-day CD.

Credit Cards

While Third Federal doesn’t offer credit cards, there are plenty of great credit cards on the market that can offer low rates, high rewards and cash back. Some of these cards include the Chase Freedom Unlimited card, Capital One Venture card and Discover It Miles card.

Personal Loans

If you’re in the market for a personal loan to cover debt consolidation or other financial expenses, unfortunately, Third Federal can’t help you. However, many financial institutions and lenders do offer personal loans at rates as low at 3.99%, including SoFi, Light Stream and Lending Club.

Mortgage Loans

Third Federal offers a wide range of home purchase options. It offers both fixed-rate options as well as variable-rate mortgages (ARM). You can choose from a fixed-rate option between 10 and 30 years, or a 5/1 ARM for either 15 or 30 years. Third Federal will also lock in your rate during the pre-approval process so you don’t have to worry about your rate rising as your search for your new abode. If the rate happens to go down after you’ve already locked in, Third Federal will allow you to borrow your funds at the lowest rate available thanks to its lowest rate guarantee. Finally, it has a low-closing-cost option where you can pay a flat fee of $295 for closing costs. Just be aware that if you choose to go for a low closing cost option, you will most likely pay a higher rate, which may cost you more over time.

Mortgage Refinancing

The same loam terms are offered for mortgage refinancing as mortgage purchase, and the rates are just about the same. However, the difference between a home purchase and a refinance is that with a refinance, you are not purchasing a new home. You are essentially replacing your existing mortgage with another one because you want to lower your rate or your payment, or for other financial reasons. Third Federal does not offer a cash-out refinance option, so you will not be able to tap into your home’s equity at the same time as your refinance. Customers are offered the same lowest rate guarantee, low closing cost option and rate lock at preapproval.

Home Equity Loans and HELOCs

Home equity loans and HELOCs are similar in the sense that they both allow you to tap into your home’s equity for any financial needs you may have, such as debt consolidation or home improvements. However, a home equity loan is a fixed-rate loan where you obtain all of the funds in one lump sum, while a HELOC is a variable-rate revolving line of credit, much like a credit card, where you can draw on the funds for a certain number of years. Both are offered by Third Federal but the HELOC carries a slightly lower rate. Be aware that the HELOC has a variable rate, which means that the rate can change at any time based on the index. It is important to note that a home equity loan or HELOC is considered a second mortgage, so you are placing your home up as collateral.

Car Loans

Third Federal does not offer car loans, but if you are looking for a way to finance a vehicle, there are a number of lenders who offer auto loans at great rates. Check out lenders with low rates such as Consumers Credit Union, Capital One and Light Stream.

The Final Word

Third Federal has proven themselves as a great lender with its low rates, flexible options for mortgages and home equity loans. Customers can also get above average dividends on the cash in their regular banking accounts. If you’re interested in financing or just banking with Third Federal, be sure to confirm whether or not it serves your state and speak with a customer service agent to find the lending and banking solutions that fit your needs.