National average rates for second mortgage products, such as home equity loans and lines of credit, are currently hovering just above one-year lows. For well-qualified borrowers, the slight difference in rates can easily be offset by shopping around for the best interest rate offers from multiple lenders.
According to data from real estate analytics firm Curinos, the average rate for a Home Equity Line of Credit (HELOC) is currently at 7.23%, only two basis points lower than last month’s figure. The lowest rate recorded in the past year was 7.19%. On the other hand, the national average rate for a home equity loan stands at 7.44%, which is a decrease of 12 basis points from the previous month’s rate. The lowest rate for home equity loans was 7.38% back in December 2025.
These rates are based on applicants with a minimum credit score of 780 and a maximum Combined Loan-to-Value ratio (CLTV) of less than 70%. Homeowners in the United States collectively have nearly $34 trillion tied up in their properties, as reported by the Federal Reserve at the end of the third quarter of 2025.
With primary mortgage rates still sitting in the low 6% range, many homeowners are opting to hold onto their current mortgages rather than selling their homes or pursuing a cash-out refinance. In such cases, tapping into the equity built up in their homes through a HELOC or a lump-sum home equity loan can provide a viable alternative.
It’s important to note that home equity interest rates are calculated differently from mortgage rates. Second mortgage rates are typically based on an index rate plus a margin, with the prime rate often serving as the index. For example, a HELOC with a margin of 0.75% would result in a variable rate of 7.50%.
Lenders have the flexibility to set pricing on second mortgage products based on factors such as the borrower’s credit score, existing debt levels, and the loan amount relative to the home’s value. Shopping around and comparing offers from different lenders can help borrowers secure the most competitive interest rate.
One example of a current offer is from FourLeaf Credit Union, which is offering a HELOC with an introductory APR of 5.99% for the first 12 months on lines of credit up to $500,000. It’s important for borrowers to be aware of both the introductory rate and the subsequent variable rate, as well as other terms such as fees, repayment schedules, and minimum draw amounts.
While rates for second mortgages can vary significantly from lender to lender, the national averages currently stand at 7.23% for HELOCs and 7.44% for home equity loans. Interest rates have been on a downward trend for most of 2025 and are expected to remain stable in the first half of 2026, making it a favorable time to consider a second mortgage.
Whether you opt for a HELOC or a home equity loan, leveraging the equity in your home can provide funds for home improvements, repairs, upgrades, or other expenses. It’s important to carefully consider the repayment terms and potential fluctuations in interest rates, especially with HELOCs, which typically have variable rates and can turn into a 30-year loan if not managed effectively.
Overall, accessing the equity in your home through a second mortgage can be a strategic financial move, especially in the current low-interest rate environment. By comparing offers from different lenders and understanding the terms and conditions of the loan, borrowers can make informed decisions to meet their financial goals.
