Rates for home equity lines of credit and home equity loans have decreased, now approaching 7.5% or lower. These borrowing options are currently more affordable than they have been in recent years.
On Wednesday, January 14, 2026, the national average monthly HELOC rate stands at 7.25%, a decline of 19 basis points from one month prior. According to data from analytics firm Curinos, the average rate for a home equity loan is 7.56%, down three basis points.
These rates apply to applicants who have a credit score of at least 780 and a combined loan-to-value ratio no higher than 70%.
The Federal Reserve reports that homeowners held nearly $36 trillion in home equity by the end of the second quarter of 2025, a record high amount.
With mortgage rates remaining close to 6%, many homeowners are reluctant to give up their existing low-rate primary mortgages. Selling a property or pursuing a cash-out refinance may not be practical alternatives for accessing funds.
Obtaining a second mortgage, such as a HELOC or home equity loan, presents a viable option for tapping into this accumulated home value.
Interest rates for home equity products are priced differently than primary mortgage rates. Lenders typically set second mortgage rates by adding a margin to an index rate, often the prime rate. Following three Federal Reserve rate cuts, the prime rate has fallen to 6.75%. For example, a lender adding a 0.75% margin would result in a HELOC rate of 7.50%.
Home equity loans, being fixed-interest products, may carry different margins. Lenders have flexibility in pricing these second mortgage products, so comparing offers is advisable. Individual rates depend on factors like credit score, existing debt, and the size of the credit line relative to home value.
National average HELOC rates can include introductory rates that may last only six months to a year. After this period, the rate typically becomes adjustable, often starting at a significantly higher level. Fixed-rate home equity loans generally do not feature such introductory teaser rates.
When evaluating lenders, look for low fees, fixed-rate options, and generous credit lines. HELOCs allow flexible access to funds up to a set limit, with the ability to withdraw and repay repeatedly.
FourLeaf Credit Union is currently offering a 5.99% introductory HELOC rate for 12 months on lines up to $500,000. This rate will later convert to a variable rate of 7.25%. Consumers should be aware of both the introductory and subsequent rates when shopping.
Finding the best home equity loan lenders might be simpler, as the fixed rate remains constant throughout the repayment term, requiring focus on just one rate. Borrowers receive a lump sum, eliminating concerns about draw minimums. Comparing fees and repayment term details remains essential.
Interest rates vary widely among lenders, making it difficult to identify a single optimal figure. The current national averages of 7.25% for HELOCs and 7.56% for home equity loans can serve as benchmarks when comparing offers.
Considering a HELOC or home equity loan now may be advantageous. Homeowners can access cash for purposes like home improvements without surrendering their favorable primary mortgage rates.
For a $50,000 home equity line of credit at a 7.50% interest rate, the monthly payment during a 10-year draw period would be approximately $313. However, HELOC rates are usually variable and can change periodically. Payments will increase during the subsequent 20-year repayment period, effectively making the HELOC a 30-year loan.