Rates for home equity lines of credit (HELOCs) and home equity loans are currently at historically low levels, hovering over 7.5%. This presents a great opportunity for homeowners to tap into their home’s value without having to sell or refinance into a higher mortgage rate.
According to data analytics company Curinos, the national average monthly rate for a HELOC is 7.44%, while the average rate for a home equity loan is 7.59%. These rates are based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%.
The Federal Reserve reports that homeowners have a record amount of equity tied up in their homes, with nearly $36 trillion at the end of the second quarter of 2025. This is the highest amount of home equity ever reported, providing homeowners with a significant source of wealth.
With primary mortgage rates hovering near 6%, homeowners are reluctant to let go of their low-rate mortgages. This makes accessing the equity in their homes through a second mortgage, such as a HELOC or home equity loan, a more attractive option.
Home equity interest rates differ from primary mortgage rates, as they are based on an index rate plus a margin. The prime rate, which currently stands at 6.75%, is often used as the index rate for second mortgages. For example, if a lender adds a 0.75% margin, the HELOC rate would be 7.50%.
It’s important to note that lenders have flexibility in pricing second mortgage products, so it’s advisable to shop around for the best rates. Factors such as credit score, debt amount, and credit line compared to home value will influence the rate offered.
While average national HELOC rates may include introductory rates that last for a limited time, home equity loans typically have fixed rates without teaser rates. This makes home equity loans a more stable option for borrowers.
When considering a HELOC or home equity loan, it’s essential to compare fees and repayment terms. The best HELOC lenders offer low fees, fixed-rate options, and generous credit lines, allowing homeowners to access their equity as needed.
One option currently available is a HELOC rate of 5.99% for 12 months on lines up to $500,000 from FourLeaf Credit Union, which converts to a variable rate of 7.25% later. For those seeking a lump sum, home equity loan lenders may offer fixed rates that last the length of the repayment period.
Overall, accessing the equity in your home through a HELOC or home equity loan can provide funds for home improvements, repairs, or other expenses without sacrificing your low-rate primary mortgage. With rates averaging 7.44% for HELOCs and 7.59% for home equity loans, now may be a good time to consider tapping into your home’s value.
