Home equity rates remained steady after the Federal Reserve kept interest rates unchanged at its first meeting of 2026. The $30,000 home equity line of credit and five-year home equity loan both stayed flat at 7.44% and 7.92%, respectively, according to Bankrate’s survey of lenders. Home equity rates are at a three-year low.

Bankrate’s senior industry analyst, Ted Rossman, notes that the current HELOC average of 7.44% is the lowest in over three years and nearly three percentage points lower than two years ago. He predicts it may drop below 7% this year for the first time since 2022. Many homeowners are holding record amounts of home equity.

Home equity rates are influenced by Federal Reserve policy and long-term inflation expectations. The Fed’s decision to leave interest rates unchanged in January suggests a cautious approach as they monitor inflation and employment trends. Rossman forecasts three quarter-point rate cuts from the Fed in 2026 as inflation moderates and the job market stabilizes.

HELOCs and home equity loans, backed by your home as collateral, offer lower rates compared to credit cards or personal loans. The average rates for HELOCs and home equity loans are 7.44% and 7.92%, respectively, while credit cards and personal loans have much higher rates at 19.61% and 12.26%, respectively, according to Bankrate’s survey.

While knowing average rates is important, the specific offer you receive for a HELOC or home equity loan depends on factors like creditworthiness, financials, home value, and ownership stake. Lenders typically cap all home loans at 80-85% of your home’s value, including your mortgage.

Read more at Yahoo Finance: Home equity rates unchanged as the Fed holds pat on rates