If you’re considering getting a Home Equity Line of Credit (HELOC) but have been waiting for interest rates to drop, you may be in for a surprise. The CME Group’s FedWatch tool shows that the probability of the Federal Reserve raising interest rates is increasing with each meeting this year. While the chance of a rate hike in June is currently 0%, it rises to 33.8% in September and 47.8% by December.
HELOC and home equity loan rates as of Saturday, June 6, 2026, are at an average of 7.25% and 7.86%, respectively. These rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio of less than 70%. Despite mortgage rates hovering around 6%, homeowners with equity in their homes and low primary mortgage rates may be frustrated at not being able to tap into their home’s value. In such cases, a second mortgage in the form of a HELOC or Home Equity Loan (HEL) can be a viable solution.
When it comes to how HELOC and home equity loan interest rates work, they are calculated differently than primary mortgage rates. Second mortgage rates are typically based on an index rate plus a margin, with the prime rate currently at 6.75%. A lender may add a margin, resulting in a HELOC rate of 7.50%. Home equity loans may have a different margin as they are fixed-interest products.
It’s essential to shop around for lenders as each has their pricing methodology for HELOCs and home equity loans. Factors affecting your rate include your credit score, debt amount, and the credit line compared to your home’s value. National average HELOC rates may include introductory rates that could last for a limited time before becoming adjustable at a higher rate.
When looking at HELOC rates today, be on the lookout for lenders offering below-market introductory rates. For example, FourLeaf Credit Union is offering a HELOC APR of 5.99% for 12 months on lines up to $500,000. However, this rate will convert to a variable rate after the introductory period. Pay attention to minimum draw amounts and compare fees and repayment terms when choosing a lender.
In terms of FAQs about HELOC rates today, a good interest rate can range from 6% to 18%, depending on your creditworthiness and location. The national average for an adjustable-rate HELOC is 7.25%, while a fixed-rate home equity loan is currently at 7.86%. For homeowners with low primary mortgage rates and significant equity, now may be a good time to consider a HELOC or home equity loan for various purposes.
If you withdraw $50,000 from a HELOC at a 7.25% interest rate, your monthly payment during the draw period would be approximately $302. Keep in mind that the rate is variable, so payments may increase during the repayment period. HELOCs are best suited for borrowing and repaying the balance within a shorter timeframe to avoid turning it into a 30-year loan.
Overall, understanding how HELOC and home equity loan rates work and comparing lenders can help you make informed decisions about accessing the equity in your home. Consider your financial goals and needs before choosing the right option for your situation.
