Rates for home equity lines of credit and home equity loans have dropped to near 7.5% and below, making them more affordable than in years past. The national average monthly HELOC rate is now 7.25%, with the average home equity loan rate at 7.56%, based on applicants with a minimum credit score of 780 and a CLTV of 70%.
Homeowners have a record amount of value tied up in their houses, nearly $36 trillion at the end of the second quarter of 2025, according to the Federal Reserve. With mortgage rates near 6%, homeowners are unlikely to let go of their primary low mortgage soon, making a cash-out refinance not a viable option.
Accessing the value locked in your house with a second mortgage, such as a HELOC or home equity loan, can be an excellent alternative. Second mortgage rates are based on an index rate plus a margin, often the prime rate at 6.75%, with lenders having flexibility in pricing based on credit score and debt.
The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. FourLeaf Credit Union is currently offering a 5.99% introductory rate for 12 months on lines up to $500,000, converting to a variable rate of 7.25% later. When comparing lenders, be aware of both rates and terms.
The best home equity loan lenders provide a fixed rate lasting the repayment period, simplifying the focus to one rate. Lump sum payments are received, eliminating draw minimums. As always, compare fees and repayment terms carefully to make an informed decision when selecting a lender.
It’s essential to compare rates from different lenders, as national average rates for a HELOC are 7.25% and for a home equity loan are 7.56%. Considering a HELOC or home equity loan now allows you to retain your primary mortgage rate while using equity cash for various expenses like home improvements.
Withdrawing the full $50,000 from a HELOC at a 7.50% interest rate would result in a monthly payment of about $313 during the 10-year draw period. However, as HELOC rates are variable, payments can increase during the 20-year repayment period, essentially becoming a 30-year loan.
Read more at Yahoo Finance: HELOC and home equity loan rates today, January 14, 2026: Lowest rates in years