HELOC and home equity loan rates as of January 6, 2026: Remaining close to 7.5%

Current Trends in Home Equity Loan and HELOC Rates

Interest rates for home equity lines of credit (HELOCs) and home equity loans remain steady at around 7.5%. With homeowners holding unprecedented levels of equity, now is one of the most favorable times in recent years to access these funds at competitive rates.

HELOC and Home Equity Loan Rates as of January 6, 2026

Data from Curinos, a real estate analytics company, shows the average HELOC rate is 7.44%, while the typical home equity loan rate stands at 7.59%.

These averages assume applicants have a credit score of at least 780 and a combined loan-to-value ratio (CLTV) below 70%.

Choosing Between a HELOC and a Home Equity Loan

Deciding on a HELOC or a home equity loan is straightforward. A HELOC provides flexible access to funds as needed, while a home equity loan delivers a lump sum upfront.

With mortgage rates remaining high, homeowners who secured low rates on their primary mortgages may find it challenging to leverage their growing home equity.

For those reluctant to refinance and lose their favorable mortgage rate, taking out a second mortgage—either as a HELOC or home equity loan—can be a practical way to access that equity.

The Federal Reserve estimates that U.S. homeowners collectively have $36 trillion in home equity. A second mortgage enables homeowners to utilize this substantial asset.

Understanding HELOC and Home Equity Loan Interest Rates

Interest rates on home equity products differ from those on primary mortgages. Second mortgage rates are typically calculated by adding a margin to an index rate, often the prime rate, which is currently 6.75%. For example, with a 0.75% margin, a HELOC would start at a variable rate of 7.50%.

Home equity loans, being fixed-rate products, may have different margins than HELOCs.

Lenders have considerable flexibility in setting rates for HELOCs and home equity loans. Your rate will be influenced by your credit score, existing debt, and how much of your available credit you use relative to your home's value.

Be aware that many HELOCs offer introductory rates below the market average, but these often last only six to twelve months before converting to a higher variable rate.

In contrast, home equity loans generally do not feature temporary "teaser" rates, as their interest rates are fixed for the life of the loan.

Tips for Selecting the Right Home Equity Lender

The top HELOC lenders typically provide low fees, fixed-rate options, and generous credit limits. HELOCs offer flexibility, allowing you to borrow and repay funds as needed, up to your approved limit.

Look for lenders with attractive introductory rates. For instance, FourLeaf Credit Union currently advertises a 5.99% APR for the first 12 months on lines up to $500,000, after which the rate becomes variable. Always check both the introductory and ongoing rates when comparing offers.

Also, pay attention to the minimum initial draw requirement, which is the smallest amount you must borrow when opening a HELOC.

When it comes to home equity loan lenders, the process may be simpler since you receive a fixed rate for the entire repayment period and a lump sum, eliminating concerns about draw minimums.

As always, review any annual fees, additional charges, and the terms of repayment before making a decision.

Frequently Asked Questions About Home Equity Rates

What is considered a competitive rate for a HELOC or home equity loan right now?

Rates can differ widely between lenders, ranging from about 6% up to 18%. Your personal rate will depend on your credit profile and how thoroughly you compare offers. Currently, the national average is 7.44% for HELOCs and 7.59% for home equity loans—these figures can serve as useful benchmarks during your search.

Is now a good time to apply for a HELOC or home equity loan?

If you have a low-rate primary mortgage and significant equity in your home, it may be wise to consider a HELOC or home equity loan at this time. This approach allows you to retain your favorable mortgage rate while accessing funds for home improvements, repairs, or upgrades. While you can use the money for discretionary expenses like vacations, it's best to avoid long-term debt for non-essential spending unless you can repay it quickly.

What would the monthly payment be on a $50,000 HELOC?

If you draw the full $50,000 from a HELOC at a 7.50% interest rate, your monthly payment during the 10-year draw period would be approximately $313. However, keep in mind that HELOC rates are usually variable, so your payment may increase over time, especially during the 20-year repayment phase. While HELOCs and home equity loans can stretch up to 30 years, they are most advantageous when used and repaid over a shorter timeframe.